Employee service awards are often a missed opportunity for companies to not only recognize those who have stayed at your organization, but also celebrate the contributions an employee has made over time. One often overlooked element of employee service awards is that they have the potential to extend beyond simply acknowledging tenure. Service awards are an opportunity to highlight an employee’s specific accomplishments and contributions to your company over time.
When done well, an employee service awards program can be highly effective for your organization. However, many service award programs are often cobbled together manually, disorganized, or overlooked completely. This post provides an overview of what service awards are, why you should care, and 8 unique ways to make service awards memorable, meaningful, and personalized to your employees.
What are employee service awards?
According to SHRM, employee service awards are a recognition acknowledging how long an employee has stayed at your company, usually beginning at the five-year mark. However, as tenure has decreased, many companies now begin awarding service awards at 1 year. Service awards also celebrate the specific achievements and contributions that employee has made through their time at your organization.
Employee service awards typically come with either a monetary reward or a tangible reward. Sometimes this includes a plaque, certificate, bonus, trophy, or lapel pin. Historically, employee service awards were part of a total rewards package and marketed as a company benefit.
Many companies establish these programs based on intuition and a vague understanding that employees want to be recognized for their tenure. This results in a messy process that often feels anticlimactic to tenured employees. To have an effective employee service award program, organizations should be following a series of best practices outlined by SHRM, described below.
7 Employee Service Award Best Practices
1. Have Clearly Defined Goals and Objectives
Your employee service awards need to be carefully defined and measured from the start. Without a clear strategy, including goals and objectives, your program will be disorganized and ineffective.
2. Set Clear Expectations for Employee and Manager Participation
Managers and employees should have a clear understanding of how to use your service awards program before it launches. Every manager should have employee start dates on their calendars and be familiar with the ways you recognize employee tenure as a company.
3. Offer Personal, Memorable Milestone Rewards
Service awards should be highly personalized to the individual, highlighting their many accomplishments over their years at your company.
4. Give Gifts Employees Actually Want
A generic gift card or some old, outdated company swag doesn’t cut it when it comes to employee service awards. When giving a service award, research what your employee actually likes to do in their spare time and give a gift relevant to their interests.
5. Create Celebratory Moments
Celebrating an employee service award publicly reinforces connections between the employee and the workplace. This is crucial to building and maintaining relationships with your long-tenured employees.
6. Tie Service Awards to Core Values
Your core values are the bond that ties your organization together. Every service award should be reflective of your company’s core values, so be sure to give meaningful, personalized gifts that also represent who you are as a company.
7. Recognize the Employee’s Individual Impact
The last thing you want is for your employee service awards to be generic. Service awards should emphasize how the individual has specifically impacted your company and what they’ve done to make change.
Why You Should Care About Employee Service Awards
So, now that we’ve taken a thorough look at service awards and how they work, let’s discuss why we should care about them. The metrics don’t lie: according to The Work Institute’s 2019 Retention Report, 38% of employees leave in their first year, and 78% leave within five years. As millennials have become the largest working demographic, companies have reacted by placing an emphasis on the importance of rewards and recognition over the last decade. Yet, The Bureau of Labor Statistics reported in January 2020 that the average employee tenure is 4.1 years, which is slightly down from 4.4 in January 2010.
While the emphasis on consistent rewards and recognition has risen over the last five years, service awards seem to be an often overlooked piece of the recognition puzzle. Companies have made huge strides in developing more holistic rewards and recognition programs, but tenure is still suffering because many employees feel that their time spent at a company is not well-rewarded.
Service awards are unique because unlike other types of rewards and recognition, every employee is eligible for a service award, regardless of role or location. Employee service awards — when part of a more holistic recognition program — are a key way to recognize what an employee has contributed to your company over time. Service awards also build trust between employees and management, strengthen company culture, and provide an opportunity to share stories that emphasize what your culture stands for. And, at a time when workplace loneliness is at an all-time high, bringing employees together through recognition is more important than ever.
The 8 Critical Stages of Employment
Service awards are changing, and today’s workforce — which is primarily millennials — cares more about having a personalized and holistic recognition experience. But your company should also be thinking ahead: service awards programs are more often combined with other recognition initiatives to create a comprehensive recognition strategy. For the purpose of this article, let’s focus on service awards themselves while still considering that they fit into the larger mosaic of an entire recognition program.
Service awards should change over time, depending on how long an employee has been with your company. This means that the longer an employee is with your organization, the more meaningful a service award should be. In fact, according to Forbes, there are eight critical stages of employment that define how an employee fits into your company. We suggest your service awards be tailored to these stages, which we explore below.
Stage 1
Year 1: The Learning Phase
In this phase, employees are absorbing as much knowledge and as many details about the company as possible. They are identifying what they like and dislike about their jobs, their managers, and their teams.
Stage 2
Year 3: It Feels Like I’m Fitting In
Employees have integrated as a functional part of the team, getting comfortable with their coworkers and understanding how their contributions make an impact. They also develop a curiosity about their career trajectories at the company, should they choose to stay.
Stage 3
Year 5: I Have Achieved Expertise
Research shows that the five-year mark is a critical time for employees. They begin to ask themselves what the next step in their career is and are looking for some excitement. They find themselves in a comfortable routine and are eager to take on new challenges.
Stage 4
Year 10: I Belong Here
Career stages beyond Year 5 are becoming less common, so it’s important to study these carefully. Employees in this stage have bonded with your company. They typically treat the company’s goals as their own and see their workplace as a version of home. These employees are critical to retain.
Stage 5
Year 15: I’m Invested
Given all the time they have already invested in your company, employees are both looking ahead to the future and looking behind to reflect on their history with your company. Your company has become part of their identity and they have a personal sense of ownership over what takes place.
Stage 6
Year 20: I Lead Like a Veteran
These employees have witnessed your company change drastically over time. Concurrently, their personal lives have changed as well. They are approaching a phase where they want to demonstrate what quality work is to younger coworkers and set an example.
Stage 7
Year 25: The Triumph Phase
This is the employee’s most significant milestone and a key opportunity to celebrate past and present victories. Employees who have spent 20 years at your company are determined to make an impact on the next generation of employees at your organization.
Stage 8
Year 30: I Am a Mentor
At this stage, employees have stepped into a mentorship and leadership role. They have a sincere desire to pass on their knowledge and leave a legacy before they retire.
Employee service awards should align with what stage the employee is in. We’ll go over these stages more in-depth below and recommend service awards for each stage.
8 Employee Service Awards Ideas for Each Career Stage
If you’re going to establish priorities for your employee service awards program, be sure to focus on these eight career stages first. It’s crucial to recognize an employee’s contributions and celebrate them in accordance with their career stage. For example, you wouldn’t give an employee who’s celebrating their first year at your company the same celebration as someone celebrating their 25th year at your company — these two employees have different experiences at work and contributions will differ greatly.
These eight service awards recommendations align with each career stage so you can ensure your service awards match the impact of the employee’s contribution over time.
Stage 1
Year 1: The Learning Phase
An employee’s 1-year service award is an opportunity to provide a small but unique reward for their first year at your company. A reward like a gift card with a handwritten note from the employee’s manager can go a long way to making them feel appreciated. Bonus points if you can get everyone on the employee’s team to sign a card congratulating them on their year of hard work.
Stage 2
Year 3: It Feels Like I’m Fitting In
Year 3 is a time to offer employees their choice of an item, like jewelry, electronics, home accessories, leisure/sports items, or travel accessories. Let them choose from a select catalog of items only employees with three years of tenure can access. Encouraging the employee to select their own item follows one of SHRM’s best practices outlined above that encourages companies to offer employee service awards that employees actually want. Additionally, a handwritten note of appreciation from the employee’s manager adds a personal and thoughtful touch.
Stage 3
Year 5: I Have Achieved Expertise
Employees who have spent five years at your company are looking for the next phase in their careers. For this reason, employee service awards become much more critical, and this is an opportunity to show them how much you appreciate them.
At this stage, make sure the employee is publicly recognized for their hard work. In your public recognition, include several examples of specific ways this employee has contributed to your company and made an impact. For a tangible service reward, consider offering additional PTO days along with a custom rewards catalog that only employees with five years of tenure can access.
Stage 4
Year 10: I Belong Here
Stage 4 is a critical time to publicly recognize an employee for their work, so don’t let this milestone anniversary slip by. Employees at this stage are extremely comfortable and see your company as an extended part of their home. Celebrate them by offering a reward that also feels like home — namely, a team- or company-wide celebration acknowledging this momentous occasion. Additionally, it’s crucial to provide a larger tangible reward, like a weekend getaway or an extra day of PTO for every year the employee has been at your company.
Privately-owned companies can consider offering stock options or other equity programs to give employees a true sense of ownership. At this stage, they feel like they truly belong. Reinforce that feeling by making your company a real part of their future.
One thing to note is that at this stage, it’s important for management to be highly involved with recognizing the employee. During your team- or company-wide celebration, have managers give a short speech about this employee’s strengths and what connects them to the company. During the speech, be sure that managers emphasize your company’s core values and highlight how this employee embodies them.
Stage 5
Year 15: I’m Invested
These employees are truly invested in your company, so now’s the time to invest in them. Again, the 15-year mark should be celebrated with an office party and a larger tangible reward. Managers should also invest time in gathering photos, memories, and meaningful anecdotes from coworkers to put together in a custom presentation that demonstrates the employee’s impact on the company over time. Their investment is measurable, so highlighting the work they have done is key to recognizing their important contributions.
For a tangible reward, consider offering an extended vacation package. Employees who have been at your company for this long deserve rest and relaxation, so make sure to emphasize this at a time when they feel most invested in your company. Additionally, if your company has a stock option program, consider providing more after an employee hits their 15-year milestone.
Stage 6
Year 20: I Lead Like a Veteran
Employees who hit the 20-year mark are still present in today’s workforce, but with millennials’ track record of job-hopping, we’re unsure of what the workplace will look like in 20 years. However, when looking at the tenure statistics of Baby Boomers and Gen X, you see similar trends, indicating that people are simply more prone to change jobs when they are younger. Considering this, it’s entirely possible that millennials will inevitably hit the same Year 20 milestones as their Gen X and Baby Boomer predecessors. The data shows that it’s still important to plan for stage 6.
20 years is a commendable time to spend at an organization, so make this particular work anniversary special. These employees are leaders that want to set an example for newer employees, so give them a custom reward that specifically honors their leadership skills. We recommend rewarding them a management development course and a rare piece of memorabilia that they will treasure. Of course, publicly recognize them for their work at your company, be sure to involve management, and consider offering additional PTO and stock options (if your company has a stock options program).
Stage 7
Year 25: The Triumph Phase
When an employee reaches a milestone like 25 years, ordinary rewards won’t cut it. This career anniversary deserves a memorable award that specifically celebrates the employee’s historical knowledge of the company. During the employee’s public service award celebration, host a company trivia night and ask questions that highlight this specific employee’s role and contributions to your company. Provide small rewards for employees who answer the most questions correctly before presenting the employee you’re celebrating with their major gift.
For this stage, in addition to public recognition and additional equity, we recommend an extended vacation package for the employee and their family. This provides an experience that they can share with their loved ones as well. The employee will also return to their job feeling refreshed and full of new ideas for their role, which is a huge advantage for your company.
Stage 8
Year 30: I Am a Mentor
At this stage, employees have stepped into a mentorship and leadership role. They have a sincere desire to pass on their knowledge and leave a legacy before they retire, but they have also put plenty of time into the job.
For this stage, on top of public recognition and additional equity, let the employee take an extended sabbatical. A sabbatical should be a paid full month off to learn a new hobby, spend time with family, or even travel abroad. This month off should be a true departure from work: no checking emails, no working on company projects, and no meetings.
Many companies are offering up to five weeks of sabbatical leave for tenured employees. If you’re wondering how you can afford to lose an employee of this caliber for a month, consider that five weeks is just a fraction of this employee’s time at your company.
Design an Employee Service Awards Program that Works
Employee service award programs don’t have to be informal or last-minute. Use these employee service awards ideas to craft a program that follows best practices and rewards employees for their contributions in a meaningful way. By creating an intentional program that aligns with your core values and treats service awards with care, you can provide meaningful moments for your employees, from their first year to their 30th.
Erin Nelson is a Digital Marketing Manager at Fond with over six years of B2B SaaS marketing experience. Erin has authored dozens of articles on employee rewards and recognition and frequently researches new trends in R&R. In their spare time, you can find them playing music, reading about socioeconomic and gender-based politics, and listening to true crime podcasts.
