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Employee Recognition Statistics Leaders Must Know in 2022

HR managers know why recognition impacts the workforce’s health and businesses’ bottom line. Read on for the latest compilation of employee recognition stats for when you need to influence the stakeholders with some impactful data.

October 7, 2022 By Ravijojla Novakovic Share on Twitter! Share on Facebook! Share on LinkedIn!

Introduction

It is no secret that humans are guided by emotions. When your most dedicated, productive,  and engaged employees complete a long and difficult project, they want to be seen and valued. Recognizing employees in a timely, specific, and personalized manner grows their satisfaction exponentially and feeds their motivation to continue delivering great work. 

Leaders want to safeguard their companies and look to future-proof the workforce that executes the company’s vision. According to Tiny Pulse’s report, only a third of workers received recognition the last time they went the extra mile at work and just a quarter feel highly valued at work. In the employee experience era when employees know their worth, failing to recognize employees is a jeopardy that’s easy to avoid by implementing a tailored recognition program.  

Recognizing employees for their excellent work comes with many benefits. In this blog post, we’ve grouped the statistics according to the recognition impact area: retention, engagement and productivity, trust and loyalty, recruiting, and wellbeing and relationships. 

1. Recognition impacts retention

McKinsey’s 2022 survey indicates that we’re still grappling with the Great Resignation: 40% of respondents declared they are unhappy at work and considering leaving their job in the near future. Leaders and HR need to understand why their employees are leaving and tackle the troublesome areas in order to secure top talent. 

Curated statistics below shed light on how recognition impacts turnover and retention and suggest that by using both peer-to-peer and top-down recognition, companies could turn the great resignation into an advantage, becoming more connected and agile. 

  • 68% of HR Professionals say that employee recognition programs positively affect employee retention. Source: SHRM
  • An employee who has been recognized is 63% more likely to stay at their current job within the next three to six months. Source: SurveyMonkey
  • Most recognition programs start recognizing service anniversaries after employees’ 5th year of service. Source: Forbes
  • Millennial workers stay in a job for an average of 2 years and 9 months. Gen-Z’s average length in a job (so far) is 2 years and 3 months. Source: Forbes 
  • Turnover is 4x higher among employees with low ‘recognitions with awards’ receiving rates compared to the highest rate of receiving recognition with rewards. Source: BIW 
  • Almost 4 out of 10 workers left their jobs because they were unsatisfied with the recognition for their contributions. Source: LinkedIn
  • Organizations with formal recognition programs have 31% less voluntary turnover than organizations that don’t have any program at all. Source: Quantum Workplace
  • A Gallup algorithm developed to predict employee turnover shows that a company of about 10,000 people can save an estimated $16.1 million in turnover costs annually when recognition is made part of company culture. Source: CFO 

Takeaway

Before the Pandemic, 31.9 million employees quit their jobs annually, and in 2022, the number rose to 37.4 million. The cost of turnover is high enough already, and Gartner predicts U.S. employee annual voluntary turnover is likely to jump nearly 20% in 2022. 

Statistics above suggest that it would be wise to start recognizing employees before they decide to leave, bearing in mind that younger generations rarely plan to stay on a job longer than 2 years. Appreciating their effort before they start thinking about other employers is one good way to increase retention. 

2. Recognition impacts engagement and productivity

For the past decade, companies have realized the cost of disengaged employees and have been actively working on engaging their disgruntled workforce. The 2022 data by Gallup estimates that the cost of disengagement is 7.8 trillion in lost productivity, which is about 11% of the global GDP. That’s an avoidable cost.

McLean & Company’s data from 2022 shows an optimistic take on engagement globally: 60.7% of employees are engaged, compared to 58.7% in 2019. The latest McLean & Company data also shows that engagement drops after the first year of working for a company. 

Here’s how recognition and appreciation of employees impact engagement and productivity:

  • Compared to those who do not consistently feel recognized at work, people who do feel recognized at work are 2.0x more likely to say people here are willing to go above and beyond. Source: Great Place to Work
  • 37% of respondents said that more personal recognition would encourage them to produce better work more often. Source: Great Place to Work
  • 69% of employees say they would work harder if they felt their efforts were more recognized. Source: OAK
  • 58% of questioned employees say that being recognized by leaders would engage them more. Source: Psychometrics
  • 60% of Best-in-Class organizations stated that employee recognition is extremely valuable in driving individual performance. -Source: Aberdeen Research Group 
  • If you choose to implement a monetary recognition program, you must set a budget. Research shows that assigning 1% of the overall payroll to recognition increases employee engagement by 85%. Source: World at Work

Takeaway

The recent data from McLean & Company shows some positive development on the topic of engagement. Everybody wants meaningful work and works better and smarter when they know their contribution is relevant and valued. What differs between employees is how they like to be recognized. Collecting relevant data helps to know exactly what works best, as the one-size-fits-all approach is no longer enough. 

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3. Recognition impacts employee trust and loyalty 

Workplace performance depends heavily on invisible, unwritten contracts managers have with staff”. – Hossam Zeitoun

Researching workforce performance in times of crisis, researchers Zeiton and Pamini discovered that the organizations that withstood the challenges were those that maintained the trust of their employees. 

Crises may come and go, but transparency and trust are key factors that build agility and hold companies together. Here are some of the statistics pertaining to how recognition impacts trust:

  • Over 50% of employees believe that being thanked by their manager builds trust both with the manager and with the company. Source: Clear Company
  • 85% of HR Leaders say an employee recognition program has a positive effect on organizational culture. Source: Hero and Mercer

Takeaway

According to Forbes, “nearly 90 percent of employees who received recognition or thanks from their boss in the past month indicated higher levels of trust in that boss.” 

A lot of trust and loyalty pertains to transparency, and that is something companies absolutely can control. Transparency in all communication and recognition by making it social and equally accessible across the workforce regardless of locale, place, or language of work is crucial in cultivating trust between employers and employees. 

Another aspect of trust companies can control is how good they are at being absolutely inclusive. Diversity initiatives help employees feel psychologically secure and accepted. Many recognition programs can be centered around diversity to improve employee trust and loyalty.  

Read more about how recognition programs affect employee wellbeing here

4. Recognition impacts recruiting 

With turnover continuing to be a major issue for companies in an ongoing War for Talent, successful recruiting and onboarding is an important antidote. According to 2022 data by McLean and Company, HR departments now spend most of their time acquiring new talent, marking a 25% increase compared to 2021.  

A lot of weight falls on the HR departments to attract and retain the workforce, and recognition is a factor that helps potential employees decide whether to get hired or not. 

  • 56% of HR leaders told the Society for Human Resource Management that employee recognition programs help with recruiting top talent. Source: SHRM
  • 42% of employees consider rewards and recognition programs opportunities when seeking employment. Source: BlackHawk Network 

Takeaway

Recruiting is becoming more challenging in the post-pandemic context. In on-site industries, McLean & Company found a 57% increase in candidate ghosting, a 63% decrease in applications for job openings, and a 55% increase in rejected job offers. This puts significant pressure on HR teams to deliver the talent quota needed for businesses to remain competitive.  

Having a talent acquisition strategy is now needed more than ever. In that same report, McLean states that only 38% of organizations report having a clearly defined recruiting strategy. Recognition is a part of that strategy, and if executed well, it helps attract talent to build an impactful workforce. 

5. Recognition impacting wellbeing and relationships

According to the JobSage survey: “more than 1 in 4 employees said they’ve quit a job for the sake of their mental health within the last two years, and nearly 2 in 5 have considered doing so.” 

Wellbeing in a business context is more than a passing fad, and both the personal and business cost of burnout in employees is devastating. Many people who experience burnout need to change careers, and companies lose their valuable assets, the people. The following stats show how wellbeing will become a number one value to watch out for in the upcoming decades and how recognition is a valuable method to increase positive feelings in employees.  

  • Business productivity increases by 31% when employees are happy. Source: Forbes
  • Peer-to-peer recognition made 90% of workers more satisfied with their work. Source: Martech Series
  • About 24% of Millennials felt connected when they received virtual kudos from colleagues. Source: Spiceworks 
  • 82 % of employed adults consider recognition an important part of their happiness at work, and 82% feel happier as a result. Source: SurveyMonkey
  • When leaders recognized employees’ healthy actions and outcomes, there was a 91% improvement in population health and an 87% improvement in medical plan cost than in companies that didn’t recognize employees’ success. Source: Mercer 
  • 32% of employees think that recognition improves the way their colleagues interact with them. Source: SurveyMonkey

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6. Do recognition the right way

There are no cookie-cutter shortcuts, and personalization in recognition is the most meaningful way to appreciate someone. Here are just a few statistics that give pointers to companies that wish to tailor their recognition programs to their workforce. 

  • 40% of employees said they received recognition only a few times a year or less from a manager, supervisor, or other leader. Source: Gallup 
  • Nearly 4 in 10 employees in the youngest generation of workers would prefer to be recognized by their people manager at least a few times a week, but only about a quarter are actually getting recognition at that frequency. Source: Gallup
  • On-site employees were 8.3 times more likely to agree that “the contributions of my department are recognized by other departments” than hybrid/remote teams. Source: McLean & Company   

Conclusion 

A lot depends on the HR teams. Sadly, HR teams are under a lot of pressure to keep the workforce thriving and in the best possible state. Challenges are many, to name a few: understaffed or underskilled HR, leaders not empowering their HR to carry through the company’s strategic goals. On the technical side: collecting reliable people data and applying people data in a meaningful way; executing recognition programs in a way that the specific workforce appreciates the most, and all the while bearing in mind all the critical drivers for talent retention and keeping these factors balanced. 

The only way to boost productivity, engagement, and overall morale among the workforce is by knowing what makes the employees tick. A good human-centered and strategy-driven recognition program keeps employees synced to the organization’s goals and values and keeps them more connected and happy to stay at your organization. 

There’s a disconnect between leaders and their workforce causing employees to look for greener pastures elsewhere. Companies need to employ all the data they can source about their workforce to find out where the disconnect happens. The rising turnover and associated cost numbers urge companies to rethink their talent strategies and do so holistically. From the candidate experience in the talent acquisition phase all the way to exit interviews, recognition helps to create the winning employee experience that insulates the overall health of the workforce.  

 

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