The power of employee recognition in 5 stats

The body of research indicating the positive impact that showing more recognition to employees can have on an organisation is comprehensive and categoric in highlighting the benefits - not only for employee’s personal sense of contribution and belonging but also to bottom-line business results.

By: Sinead Healy on

However, only around 14% of managers say they have the right tools to help make sure recognition takes place. And despite HR and people-leaders calling out for tools to streamline their own people-processes and help build better working cultures, a business case still need to be made much as with any other commercial investment.

So, if your organisation is currently researching employee recognition software or exploring what benefits investing further in a culture of recognition can deliver, here are five powerful stats that can form the crux of your case.

Recognition-rich cultures experience lower voluntary turnover

One of the most common business cases for recognition is that of reducing voluntary turnover. With estimates suggesting replacing an employee (from the start of the recruitment phase through to full working capacity) can cost anywhere between 90% and 200% of the original employee’s salary.

And there’s a mountain of research that highlights how employees themselves note feeling under-appreciated as a primary cause of leaving a role, or in the very least, searching for a new one.

Read more: Three ways to reduce employee turnover

One powerful study from Bersin found that, in recognition-rich cultures adopting a peer-to-peer model, voluntary turnover rates are 31% lower - representing huge potential savings for organisations, as well as the benefit of retaining top performers.

Customer satisfaction increases

The majority of companies are customer-facing in some way, from servicing client accounts through to working on the shop floor. And it makes perfect sense that happy, motivated and engaged employees would deliver a better level of customer service and be more inclined to go out of their own way to ensure a client or customer is satisfied.

A Globoforce study summed this up nicely, finding that 41% of organisations that adopted peer-to-peer recognition software saw an increase in customer satisfaction levels.

In saturated and competitive market niches, gaining the upper hand through supreme customer service is invaluable.

A boost to productivity

Higher productivity means better bottom-line results, but without engagement, productivity is typically poor. In fact, low productivity as product of disengaged workforces costs the US economy in the region of $550 billion every year.

And whilst recognition is one of the key components to creating long-term engagement, the act of regularly recognising employees for their regular efforts as well as achievements can have a profound effect on productivity levels, with studies suggested up to a 78% uplift in productivity and intrinsic drive when employees do feel appreciated.

Improved relationships with management

In exit interviews, one of the top three reasons why a voluntarily departing employee says they’re leaving an organisation is because of a poor relationship with their higher-ups. Research does suggest that the old adage of ‘people don’t leave jobs, they leave their boss’ really is true.

Recognition is a particularly powerful way to build up those relationships between people managers and the wider workforce, improving positive communication, a sense of appreciation and also trust.

A research paper from Cicero Group confirmed as much, finding that half of the employees they asked said being thanked by managers improved their relationships.

Employees value gratitude over cash

Once basic salary requirements have been met, money is no longer the primary driver of workplace satisfaction. Feeling appreciated and recognised are a far more powerful driver of long-term intrinsic motivation, building a sense of belonging and increased engagement too.

Further research from Gallup looking into how employees prefer to be shown appreciation found that staff rank public recognition and a private thank you from a colleague or line-manager over monetary rewards.

Is your organisation ready to take recognition to the next level? Find out the steps involved in launching a recognition programme here.