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5 Ways Employee Recognition Can Benefit Your Business

Most businesses will tell you they recognize the contributions of their employees. When somebody on the team goes above and beyond, they offer up a raise, bonus, or title bump — oftentimes, right around an annual review or work anniversary.

Any one of these rewards seems appropriate. After all, you should compensate for a job well done. But recognition knows no calendar. It should happen all year long and shouldn’t be reserved for just outcomes or wins. In fact, only one in three people say they receive any sort of regular praise in the workplace.

Regular recognition has many benefits, not just for your employees but your business:

1. Recognition Improves Trust

No one needs to tell you that trust is a fundamental building block of any healthy work relationship. If staff can’t trust you, they won’t have much confidence in your leadership ability. You’ll also find it far more challenging to motivate them and keep up morale.

But recognition has a way of building trust between employer and employee. In fact, 86 percent of workers said they trusted their boss when recognized within the last month. Without recognition, only 53 percent could say the same.

2. Recognition Improves Productivity

Did you ever get a gold star in school? Sure, it made you feel good, but it also inspired you to try that much harder on the next go-around. If recognition drives productivity in youth, it only stands to reason that it can do the same for adults.

This isn’t to say you should hand out stickers, but recognition is known to motivate 82 percent of employees. Another 78 percent say they’d work harder if their contributions were better recognized. Simply thanking staff may help bolster productivity.

3. Recognition Improves Retention

Turnover can be expensive. You can pay upwards of 16 to 20 percent of salary to replace an employee. So imagine wasting all that money on recruitment and development efforts when a recognition program could’ve solved the problem.

Companies that improve employee engagement through recognition programs can see 31 percent lower voluntary turnover. And it appears that specific feedback is one of the most important elements to recognition.

4. Recognition Improves Reputation

Business leaders sometimes think a job post is all it takes to attract top talent. While you’ll definitely get your fair share of applicants, the caliber of these candidates has a lot to do with your company’s reputation.

If you recognize their efforts, job satisfaction improves to the tune of 85 percent. Not only can this boost retention but reputation — what with 50 percent of people already talking about their employers on social channels.

5. Recognition Improves Culture

Culture is nothing new. Even before we started talking about it, all businesses had one. But because culture contributes to a company’s identity and values, which can help differentiate it from competitors, its development has moved front and center.

It’s also gained momentum due to the future workforce. Millennials drive most changes in today’s workplace, and they want a strong company culture. It’s become the deciding factor on whether someone chooses to work for one company over the next.

While recognition won’t make a culture, it goes a long way in supporting it. If you recognize staff, they’ll be 35 percent more likely to say the culture is fun and enjoyable and 37 percent more likely to believe the company cares about them as a person.

Many businesses will tell you that their greatest, most valuable resource is their people. The only problem with this statement, as true as it may be, is that most of the attention is paid to pleasing all others before them — and some would argue that they often come in at a distant third behind both customers and investors.

If you start recognizing staff for their contributions, not just their achievements, you could be doing wonders for your business. So, show your gratitude for those who work for you. A little kindness, as they say, goes a long, long way.