Why You Should Keep Length of Service Award Programs Going

One of the common decisions senior leaders make with length of service awards is their perception that they don’t produce any measurable return for the organization, is dropping them completely. 

This rationale of career milestone awards not impacting performance numbers and results has been around for many years. 

However, there is definitely an impact made when you give these awards. So, what benefits are there from continuing with milestone recognition? Should you keep going with length of service award programs?

The Beginnings of Length of Service Awards

Length of service awards started off in the public sector with honoring employees who reached 25-years of service. This appears to be a carryover from post-World War 2, when military leaders became the leaders of many organizations. Military leaders gave medals to soldiers for their military service. In companies, this continued on for employees with their years of service.

But 25-years of work service is definitely from a bygone era.

According to the Bureau of Labor and Statistics, in January 2020, the median employee tenure (the point at which half of all workers had more tenure and half had less tenure) for men was 4.3 years, unchanged from the median in January 2018. For women, median tenure was 3.9 years in January 2020, little different from the median of 4.0 years in January 2018. 

It’s important to note that the median length of tenure increases with age, but it will never again reach 25-years of service. 

In your length of service awards program, it is important to capitalize on personalization for what people want. Gift selection must address generational demographics to know what each generation of employees wants versus another. 

There must also be an allowance for remote/virtual employees who can often feel forgotten. Ensure your program technology keeps everyone connected as they choose their milestone award. 

Changes and Impact 

Celebrating additional tenure milestones continues to grow, with at least 16% of organizations celebrating one-year milestone and 7% celebrating 3-year milestones back in 2017. For both year ranges, the private sector has a much higher percentage of participation than the public sector.

Dr. Trent Kaufman, from the Cicero Group, conducted some research written up as “The Effect of Years of Service Award Programs: Quantifying the Return-on-Investment,” a few years ago and found the benefit of 4-plus years of improvement in employee tenure in organizations that had good milestone recognition programs in place.

Side Benefits 

A well-executed and presented length of service award program with celebration events can be a positive employee experience that engages both the recipient and those they work with. However, our findings show that not all organizations hold their managers accountable for representing the organization and truly celebrating the recipient the right way. 

Length of service awards are about the organization caring for and celebrating employees. They are about saying thank you meaningfully. It should never be about what an organization gets in return.

Conclusion 

I think organizations need to look carefully at their purpose and reasons for giving length of service awards. Are they being given to honor and thank their staff? Should they expect something in return for what they give people?

1. Research shows that the use of a length of service awards program extends the tenure of employees with organizations.

2. There is a positive employee experience that permeates the organizational culture when employees are celebrated for their contributions.

3. Managers need to be held accountable for giving meaningful acknowledgment to recipients of milestone recognition. 

Recognition Reflection: How is your length of service awards program viewed in your organization?

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