Reducing employee turnover is a constant struggle for most companies. This is especially true in current events, where the COVID pandemic and “worker shortages” have spurred companies to offer incentives to onboard more employees. How bad is it? And how much does it cost to replace an employee? We all love some hard numbers, and staffing companies have done plenty of research on this subject. But as an employer, these numbers are probably a bit hard to look at:
- Nearly 19 million people either leave the labor force or change occupations each year.
- The average turnover rate for any given company is 20% (13% voluntary, 7% involuntary), and the average quit rate sits at about 2.5%.
- 38% of new hires quit within 12 months, with 2/3 of those quitting within the first 6 months.
- Employers spend about 1/3 of a lost employee’s salary for each resignation. This statistic holds true from entry-level to senior positions at most companies.
- For hourly employees, the loss of an $8/hr. worker can cost a company well over $5000.
- Lifetime costs of a single instance of employee turnover can run nearly 2x the salary of the original employee.
And when we look at the secondary cost effects of employee turnover, there’s much more than money at stake. A company with high employee turnover risks:
- A damaged reputation that makes talented potential employees turn the other way.
- Employee burnout from compensating for empty positions.
- Lower employee morale, less engagement, a breakdown of cooperative corporate culture.
When you consider all the factors of employee turnover, like hiring costs, lower productivity, training, etc., you get a better idea of how expensive it is, both to your bottom line and to the stability of your workforce. The resulting social effects of employee turnover we just discussed tend to create a vicious cycle of lower morale to higher turnover to lower morale to higher turnover, and so on. It’s like a bee colony collapsing. And one huge factor in companies with employee turnover is that they have a corporate culture that lacks care or recognition for their employees.
Why Implementing an Employee Recognition Program Saves More than Money
So, why initiate an employee recognition program? There’s a bunch of reasons. First, you stop your company from becoming one of the above statistics. Second, you boost employee morale and company loyalty. Third, your company gets a good reputation for taking care of their employees. And there are many other symptoms of a healthy corporate culture, like increased engagement, work quality and productivity, and keeping talent and skill with you and not your competitors. And at the end of the day, we might use numbers to analyze our work product, but we can’t use numbers to analyze our work processes; we need intuition, compassion and professional development for that.
Here’s a few employee recognition award ideas:
- Handing out unique corporate gifts at the holiday party.
- Creating personalized corporate gifts for your employees on special occasions to celebrate successes.
- Ordering everyone business cards and business card holders for their desks and handing them out on a particularly hard week.
- Trophies and plaques for things like top sales awards.
- Installing a large perpetual plaque for employee of the month outside a congregating place like the break room.
- Designing each employee an engraved nameplate.
- High-quality, engraved pens featuring the company’s name, logo and department for everyone in the office.
- Goodbye parties and retirement award plaques to send off senior employees in style.
Nearly a third of workers who leave their jobs say they did it because they didn’t feel like their company recognized or appreciated them. And researchers say that companies who implement employee recognition awards programs and keep a positive and engaging company culture can reduce their turnover rates by up to 60%. So when you’re doing your annual cost/benefit analysis and you’re trying to figure out ways to get people to stick with you, throw around some employee award ideas. With the help of the right corporate gifts and awards company, you can implement an effective employee recognition program on any budget.