Three years ago, COVID-19 gave new meaning to “challenging times.” As we transition from the pandemic and our national public health emergency finally nears an end, more traditional societal challenges have emerged again.
- The U.S. annual inflation rate in January 2023 was 8.4%, compared to 1.5% in March 2020 when the pandemic began. Food prices are rising even faster, at an annual rate in January of about 10.1%.
- Pandemic-related unemployment recovered to the extent that America reached 3.7% by October 2022, the lowest rate in over 50 years. But in response to recessionary fears, major companies almost immediately started announcing substantial layoffs.
In 2022, according to Forbes, more than 120 large companies laid off over 125,000 employees. Then in January and February 2023, more than 40,000 new job cuts were announced by dozens of leading American companies, including Disney, IBM, Boeing, KPMG, Yahoo, Dell, FedEx, HarperCollins, Hasbro, and more.
Needless to say, workers are feeling a lot of anxiety about economic conditions and especially their jobs, even if their employer appears to be doing well and they have been given no particular reason to fear a layoff. At times like these, it’s more important than ever to help promote employee retention by providing a confidence-inspiring work environment.
The Costs of Employee Anxiety
Anxious employees become disengaged employees. It’s well-established that disengaged employees are not only more likely to start looking elsewhere but also less productive even when they stay.
In fact, due in large part to productivity decreases, disengaged employees cost companies an average of $3,400 annually for each $10,000 that they earn.
According to Gallup’s annual workforce surveys, companies with high employee engagement are 21% more profitable and 22% more productive than their peers.
Even in a high-turnover company (over 40% annualized), the business units with highly engaged employees achieve 24% lower turnover than others in the same company. The gain is even more dramatic in low-turnover companies (less than 40% annualized), at 59% less turnover in highly engaged units.
Turnover is even more expensive than a lack of engagement. The average cost of replacing an individual employee is one-half to two times their annual salary.
Recognizing the Value of Recognition
One of the most effective ways to create loyal, committed employees who feel confident, satisfied, and motivated is to practice a solid corporate recognition culture. Companies that conduct structured recognition programs are 12X more likely to experience robust and successful business outcomes.
More specific to the current discussion, companies with a culture of recognition have nearly a third less turnover than those without recognition programs, and their employees are 56% less likely to be looking for a new job.
Creating a Culture of Recognition
By practicing consistent employee recognition in a manner that workers see as genuine, companies can trigger major increases in employee retention and engagement. Remember these critical points.
Make It Quick and Easy to Carry Out
Everyone in the company, from the CEO to the newest entry-level worker, must have an easy way to express appreciation. Maintain a mix of formal and informal recognition programs, including some involving social media. Immediate recognition has a much greater impact than if received far after the fact.
Keep It Specific and Special
For the greatest impact, link recognition to specific behaviors with measurable results. Employees will value credit that memorializes their achievement (displayed or otherwise shared in public places) far more highly than anything privately given.
Link It to Corporate Goals
Create a win-win situation by tying recognition to company goals. Employees can see how they contribute, and the company can experience higher ROI on resources invested in appreciation.
Promote the Power of a Good Story
Emotional response to a good story lingers long after the tale has ended. Create ways in which employees can talk about their achievements and the recognition received.
Your Recognition Experts
Rewarding employees for their contributions is critical to employee retention. Make rewards and recognition a part of your culture, and you’ll create an engaged workforce more likely to stay with you long-term – even in challenging times.
Xceleration has the experience and expertise to develop effective recognition programs. Contact us today to build the Culture of Recognition your company needs to thrive.