As business leaders plan for a new year, the current recession is certainly part of the equation. Already, businesses have frozen new hires and scaled back budgets. In the past, recognition programs would have been on the chopping block, but companies are instead choosing to bolster these programs. Here’s why employee recognition is crucial during times of economic uncertainty.
There’s never a “good” time to lose valuable employees, but a recession certainly doesn’t help the situation. Even long-term employees could be eyeing the door if they aren’t feeling appreciated. Despite the recession, people are still confident in the job market. In April 2022, 4.4 million Americans quit their jobs, which is almost as high as “The Great Resignation” statistics a year prior. This costs employers millions in turnover expenses. On average, a 10,000 person company stands to lose $16 million annually in turnover costs!
The key to healthy retention is frequent and consistent recognition. According to a Gallup poll, employees who only receive recognition a few times a year are 74% more likely to plan on leaving their job within a year. This turnover rate decreases to 31% when employees are more frequently recognized. When people don’t feel appreciated or fulfilled by what they do, there’s nothing meaningful tying them to the company.
When done properly, recognition should feel personal and specific. What did the employee do? Who did they help? By offering a genuine “thank you,” the employee can feel good about what they did. They are not just performing the tasks demanded by their job description; they are helping their coworkers and improving the lives of customers. This helps link their stellar performance to personal fulfillment. So whether the recognition is coming from management or peers, it’s good practice to describe how the recipient positively affected someone. How did their act make someone feel?
Here at Dion, we have a long-established “Diamond Award.” As a family company, part of our culture involves lending a helping hand to other Dionites. We want our employees to feel like they can rely on each other as people, not just coworkers. Employees can nominate each other by writing down a specific instance where someone went above and beyond. The nominee then receives a custom Dion Diamond pin, has their good deed published in our internal newsletter, and has the deed physically posted in the factory. This is just one of the ways we keep recognition personal, specific, and tied to our company values.
In the same Gallup poll mentioned earlier, only a shocking 19% of managers and leaders say recognition is a priority at their organization. We anticipate this will change. Recognition programs are transitioning from a nice-to-have to a must-have. During times of economic uncertainty, businesses have the opportunity to stand with their employees and invest in their professional fulfillment. Not only is this good for employee morale, it’s just good business sense.
In addition to better retention and lower turnover expenses, companies with recognition programs get better work out of their employees. A study done by the American Psychology Association found that 93% of employees are motivated to do their best work when they feel valued. Another study shows that: 40% of Americans would put more energy into their work if they were more recognized. Higher productivity, in turn, leads to better business outcomes. Happier employees also lead to more positive interactions with customers and vendors.
Though the recession promises to be hard on many folks, businesses have a real opportunity to invest in their own workforce. Frequent and consistent recognition leads to:
The numbers don’t lie - recognition is a must-have! As recognition experts, we’re passionate about creating memorable custom awards that inspire. To learn more about recognition programs and custom-made jewelry products to support those award and recognition moments consider speaking to one of our experts at E.A. Dion.
By Aubrey Dion
Aubrey Dion is proud to be back working for the family business she grew up in. Over the years, she has performed a wide variety of jobs in both the office and factory, becoming a true "jack of all trades." Aubrey credits her quick learning ability to her strong theatre background, where memorization and attention to detail are vital. Working in the marketing department allows her to stay creative and work on exciting new projects for the company.