The Employee Benefit That Gives Back: Why Recognition Belongs in Your Benefits Strategy
Every item on your benefits menu has a clear job to do – for you and for your employees. Health insurance protects against financial risk. Retirement matching builds long-term security. Paid leave supports the parts of life that exist outside of work. And chances are, every benefit on your list is one your organization tracks with scrutiny, adjusts with care, and can defend with data.
In many organizations, recognition lives in a different drawer entirely – filed under “culture” or “employee experience,” funded intermittently, locally or more modestly, and treated as something you invest in when things are going well and slide off the table when they aren’t. It’s treated as supplemental more than structural.
The reality is recognition is a benefit – and has the potential to be the most critical non-statutory benefit you can offer your employees.
Most Benefits Don’t Work Very Hard
Before making the case for recognition, it’s worth naming something most HR leaders already know but rarely say out loud: a significant portion of the benefits budget isn’t working as hard as it should. It’s not paying you back in performance or culture.
Utilization – whether employees actually use what you provide – is the core metric of benefits ROI. And the numbers, frankly, are not great. Gartner researchOpens in a new tab has found that on average only a quarter of employees with access to well-being benefits actually use them. A Forrester study Opens in a new tabfound that 71% of HR professionals report their employees underutilize the benefits on offer. Employee Assistance Programs are perhaps the starkest example: while 89% of large companies now offer them, utilization rateOpens in a new tabs hover around 4–7%.
That means companies are paying for a benefit that, in some cases, 95% of employees may never touch.
Recognition can look very different. At EmblemHealth, for example, 79% of managers are actively using the recognition program. Consider that number. Few non-statutory benefits get that kind of leadership participation or reach. Most benefits are consumed individually, occasionally, or not at all. Recognition, by contrast, becomes something leaders actively do – and in doing so, they reinforce culture, strengthen connection, and generate useful organizational data at the same time.
HR teams work hard to build thoughtful benefits packages. The problem here is structural. Most benefits are passive by design – they sit there, available, waiting to be used. They certainly aren’t part of culture, and they don’t connect employees together. Employees either find them, remember them, or don’t.
Here’s the thing. The organization has almost no mechanism to improve ROI by improving the benefit itself. You can communicate more. You can run enrollment campaigns. But you can’t fundamentally change what the benefit does or doesn’t give back.
This is the utilization ceiling problem – and it affects virtually every category of non-salary benefit spend. Better awareness might lift a wellness program from 12% to 18% utilization, but the structural dynamic doesn’t change. You spend; some employees receive; most don’t; you try again next year.
Recognition is structurally different from almost every other non-statutory benefit in the portfolio.
The Only Benefit that Pays Leaders Back
A well-designed recognition program doesn’t wait to be discovered. It runs through the flow of work and is part of your culture fabric. Every time someone is recognized, the benefit is “used” – by the giver, the recipient, and often the colleagues who witness it. And unlike most benefits, recognition benefits give the company something more than impact: information.
As we explored in depth in our recent blog post, Spark to Signal: How an Impactful Recognition Message Becomes Workforce Insight, every specific, values-linked recognition moment is also a data point about your workforce: who recognized whom, for what behavior, tied to which value or strategic priority. Thousands of those moments, collected over time, tell you something no engagement survey, performance review, or annual pulse can: how work actually flows through your organization right now.
This is what makes recognition categorically different from everything else in your benefits portfolio. It doesn’t just cost money. It generates organizational intelligence in return. The more it’s used, the smarter your organization becomes about itself.
I bet no other benefit on your list does that.
See how they did it: Baystate Health
Baystate Health made recognition part of how it supports both employees and patients – not as a nice-to-have, but as a meaningful part of the culture and experience it wanted to create. It’s a strong example of what happens when recognition stops living in the “culture” bucket and starts doing real organizational work.
Read the case study
What the Returns Actually Look Like
The individual-level returns from recognition are well-documented and significant. Employees who receive high-quality recognition are 45% less likely to leave. Those who strongly agree they receive valuable recognition are 5x as likely to be engaged. According to the U.S. Bureau of Labor StatisticsOpens in a new tab, employers spend roughly 31% of total compensation – about $31,000 per year per worker – on benefits. In the EU, EurostatOpens in a new tab puts non-wage employer costs at around 25% of total labor costs, though the share varies widely by country. Recognition typically runs 1–2% of payroll.
But the ROI calculus for recognition is broader than retention alone, because recognition also solves problems that the rest of your benefits budget is actively trying to address.
Take psychological safety – one of the strongest predictors of team performance we have. Our recent Global Research Study found that employees with high psychological safety are 27–40% more likely to understand and align with their company’s values and strategic initiatives than those without it. And recognition is one of the most reliable builders of psychological safety in an organization: employees who were thanked within the past month reported psychological safety scores 21% higher than those who hadn’t been recognized recently.
Consider what that means for your investment in manager training, leadership development, and culture programs. All of those initiatives depend on psychological safety to land. Recognition is the infrastructure that makes them work better.
Or take strategic alignment – the problem every change program, restructure, and new initiative runs into. (That’s pretty impactful, when McKinsey says 70% of change initiatives failOpens in a new tab.) When recognition is explicitly connected to strategic priorities, our data shows employees are 129% more likely to say they understand how their work contributes to organizational goals. And employees whose recognition is tied to strategy are five times more likely to feel personally invested in helping achieve company priorities.
A Different Kind of Benefits Conversation
The standard benefits conversation is about what organizations give to employees in exchange for their time, energy, and commitment. That framing is right, as far as it goes.
What it misses is that the best investments don’t just flow in one direction. The best investments return something.
Most HR leaders are managing their people strategy with a significant data deficit. Annual engagement surveys tell you how people felt six months ago. Pulse surveys give you a sample. Exit interviews tell you what already went wrong. Recognition data is something genuinely different – a continuous, voluntary, real-time signal generated by the people doing the work, about the work, as it’s happening.
As some leaders are discovering, that’s exactly the shift recognition makes possible — from a feel-good program to a real input into culture and people strategy. As Dayna Perry, Chief People Officer at Conga, recently put it: “Conga Stars has proven to be more than just a reward and recognition solution. The experience we’re creating, along with the data we’re gathering as the program evolves, has become foundational to building Conga’s culture and improving our people strategy.”
For resource-constrained teams in companies of any size, this matters in a specific way: recognition is a simple way to deliver workforce insight. A well-designed program is low administrative overhead and high signal value – and the insight it generates can actually reduce work elsewhere, by surfacing answers to questions you’d otherwise have to survey for.
That matters operationally, too. Recognition is one of the few benefit investments that can be both strategically valuable and relatively light to run. As Christine Grant, former Staff Compensation Analyst at our client GoTo, put it: “Any time we add on a new application, there’s always concern about how it’s going to work with our existing systems, or how much work it will require from our team to implement and maintain. However, our integration with Workhuman was so seamless that I don’t even have to think about it or worry if things are feeding into the system correctly. It's just all taken care of.”
And the outcome wasn’t just smoother administration. GoTo reports 95% employee engagement in their Bravo! recognition program, with nearly its entire workforce adopting the program. It also saw 4x lower turnover among employees who received recognition from multiple nominators, and 3x lower turnover among employees who both gave and received recognition.
For faster-moving organizations scaling culture quickly, recognition is the infrastructure that keeps values visible and behaviors consistent without bureaucracy. The data layer is what elevates recognition from a retention tactic to a strategic tool – one that gives leadership real-time visibility into how culture and strategy are aligning across the workforce.
And on return: no other item in your benefits portfolio generates organizational intelligence as a byproduct of employee use. Health insurance doesn’t tell you who your emerging leaders are. A 401k match or pension doesn’t reveal where collaboration is breaking down. Subsidized childcare can’t show you whether your new strategic priorities are landing with the people who need to execute them.
Recognition does. Done well, taken seriously, funded appropriately, and connected to the real work of the business, recognition is one of the very few benefit investments that improves employee experience and makes your organization more intelligent at the same time. That’s not a perk. That’s a benefits strategy that benefits everyone.
Isn’t it time to rethink recognition as a benefits tool?
Further Reading: Spark to Signal: How an Impactful Recognition Message Becomes Workforce Insight
People also ask:
Is employee recognition a benefit?
Yes – and increasingly, it’s recognized as one of the most strategically valuable non-statutory benefits a company can offer. Unlike passive benefits that require employees to seek them out, recognition is delivered in the flow of work and generates measurable returns in engagement, retention, psychological safety, and organizational insight.
What is the ROI of employee recognition programs?
Employees who receive high-quality recognition are 45% less likely to leave, and those who strongly agree they receive valuable recognition are 5x as likely to be engaged. Beyond retention, well-designed recognition programs generate real-time data about skills, collaboration, strategic alignment, and culture health – insight that most organizations currently lack.
Why do most employee benefits have low utilization?
Most benefits are passive by design – they sit available and wait to be used. Gartner Opens in a new tabresearch has found that on average only a quarter of employees with access to well-being benefits actually use them. Recognition is structurally different: it runs in the flow of work, so utilization is built in rather than dependent on employee awareness or initiative.
How does recognition support strategic alignment?
When recognition is explicitly tied to strategic priorities, employees are 129% more likely to understand how their work contributes to organizational goals,Opens in a new tab and 5x more likely to feel personally invested in achieving them. That’s a level of alignment that communications programs alone rarely achieve.
What makes recognition different from other culture investments?
Unlike engagement surveys, performance reviews, or annual pulse checks, recognition generates continuous, voluntary, real-time data about how work actually flows through an organization – who is contributing, how skills are developing, where culture and strategy are aligned, and where they’re quietly diverging. It’s the only culture investment that actively builds organizational intelligence as a byproduct of everyday use.
About the author
Darcy Jacobsen
Darcy is a passionate storyteller and champion of workforce transformation, human connection, and recognition-driven culture. As an author on the Workhuman Live Blog, she loves to connect deep research insights with modern workplace dynamics to uncover what really drives engagement, belonging, and happiness at work. With a background in communications and a master's in medieval history, she brings a unique perspective to her writing, taking deep dives into all topics around organizational psychology and the science of gratitude.