Employee Recognition: A Proven Strategy

August 4, 2015
| ByMike Ryan

In today’s economy, its seems like every corporate initiative needs a compelling return on investment to get funding. It’s worth noting that employee recognition investments have very little trouble justifying their expenditures. In fact, these strategies provide one of the best, proven returns imaginable.

Recognizing employees provides a variety of business benefits. It helps companies translate corporate goals into individual employee action. It focuses workers on the enterprise’s mission and their role in it. Recognition—and all the communications and reinforcement activity that goes into it—results in a more aligned, more dedicated and more engaged workforce. From there the numbers speak for themselves.

Take these stats from Gallup. Organizations in the top quartile of engagement scores had less operational costs than others. A savings made possible by a 37% drop in absenteeism and significantly lower turnover (anywhere from 25-65% less depending on the business model). On the revenue generating side they saw material spikes in customer loyalty, productivity and profitability. Each was better by 10%, 21% and 22%, respectively. Towers Watson also looked at the benefits of employee engagement. It found that companies with low engagement scores averaged margins of 10%, while companies with high/sustainable scores to be around 27%.

Senior executives are always looking for ways to maximize their business. They are constantly searching a competitive edge—one that will help them outperform others. Clearly, employee recognition has proven itself to do just that.

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