Has your company been putting off implementing a social recognition solution? Do you need help getting buy-in from internal stakeholders who claim there are just too many other initiatives to focus on recognition right now?
Sure, you can kick the can down the road and wait another year – but it will cost you. The business is constantly executing on multiple initiatives at once. So if you’re waiting for the perfect moment when everything else is checked off the list, you’ll never get anywhere.
Many of those other HR initiatives that take up so much time and energy are doled out every year like clockwork: merit increases, reviews, bonuses. These traditional reward levers don’t deliver tangible ROI or motivate people throughout the year like a well-funded social recognition program.
Here are five major ways you’re losing money with recognition indecision:
- Increased flight risks: It’s still a job seeker’s market and research shows meaningful work is much more important to people than compensation and other perks. Giving out retention bonuses at random isn’t a sustainable tactic and won’t reinforce the meaning behind the work either. If you do lose a key employee, Korn Ferry Hay Group estimates the cost of replacing that person is between 50 and 150% of salary. Center for American Progress estimates for specialist, senior, and executive positions the cost per employee could be as high at 213%. Workhuman® customers like type: entry-hyperlink id: 5tp55VciPPSkFhEAzUGPN7 and type: entry-hyperlink id: mGH8CAcun37SmMbyopw0G have seen tangible links between a healthy recognition culture and improved employee retention.
- Lack of engagement: Many companies turn to recognition when they start to see a dip in employee engagement scores. So if you delay action on putting a recognition program in place, those engagement scores aren’t going to fix themselves. And engagement still matters. Gallup found companies with an average of 9.3 engaged employees for every actively disengaged employee experience 147% higher earnings per share compared with their competition. After implementing a Workhuman recognition solution, type: entry-hyperlink id: xnANNKp5F3QZu2fLJdCye saw a 12-point increase on its engagement survey. And type: entry-hyperlink id: tDSm3ZosYBHpGU3lHx4IQ, another Workhuman customer, found a significant correlation between engagement and more frequent, smaller awards received throughout the year.
- Poor employer brand: Considering the fact that U.S. businesses spend more than $110 billion on talent acquisition (that’s more than $3,000 per hire), no company can afford to ignore their employer brand. In an Allegis Group Services study, 69% of respondents said they would not take a job with a company that had a bad reputation – even if they were unemployed. The best employer brands are built on employee stories. One company that does this especially well is Cisco – which just topped Fortune’s best workplace list. Over the years, Cisco employees like David Faik and Yogesha MG have publicly shared how recognition makes their jobs more meaningful.
- Poor employee performance: High-performing employees are good for business, but what motivates them to work hard? Giving employees more money and hoping for better results doesn’t work. Research shows monetary incentive alone only increases performance by 11%. A combination of feedback, social recognition, and monetary incentive (including personal, meaningful and tangible rewards) will increase employee performance by about 32%. We’ve seen this play out firsthand with many customers. At type: entry-hyperlink id: 5tp55VciPPSkFhEAzUGPN7, 54% of employees showed a year-over-year increase on their performance rating when they received three or more awards.
- Intangible company values: If your company values are actually just words on the wall, they’re doing nothing to help your business. Deloitte found managers of higher profitability companies are 12% more likely to have a strong focus on core values and corporate culture. Because social recognition is designed with awards that map back specifically to each value, it integrates those ideals into employees’ everyday thoughts and actions. Social recognition will bring your values to life.
See how recognition can positively impact your workforce by downloading Workhuman’s report.
Still mulling over your decision? Let me ask you this: If it’s HR’s sole responsibility to drive employee productivity, is your total rewards strategy delivering on that goal? Are traditional compensation strategies driving productivity?
Every day of inaction is a lost opportunity to better engagement scores, increase employee satisfaction, lower turnover, and increase employee productivity. It’s never the wrong time to invest in your employees and programs that match the way work is being done so people are rewarded more often and inspired to do their best work.