Years of Service Awards: The Power of Employee Recognition Programs

Why Are Service Awards Important?

Service awards are a vital piece of the puzzle for building and maintaining relationships with your employees. These awards show that you recognize and appreciate the effort and loyalty that workers show to the company by giving their time for a year (or years).

Plus, service awards are a type of recognition, and recognition, as we mentioned above, comes with a whole smorgasbord of benefits. Regular recognition:

• Enhances productivity by 14%
• Increases employee engagement by 43%
• Lowers frustration levels by 28%
• Makes employees five times more connected to company culture
• Inspires trust, leading to employees that are three times more loyal

All this improves work. But wait, there’s more! Service awards also improve retention rates. For example:

• 63% of employees who are recognized are very unlikely to look for a new job
• 43% of employees state that a lack of recognition and engagement drives them to switch jobs
  

As you can see, recognition is one of the best ways to improve retention and reduce turnover, which could bump that median tenure time of 4.1 years up (and allow you to give more service awards—do you see where we’re going with this?).

As you create a meaningful service awards program that recognizes each employee for the good they do and the value they bring, employees will want to stay at your company and will be more engaged in their work. It’s a win-win cycle of recognition and retention.

How Do You Recognize Years of Service?

When work anniversaries come around each year, what’s the best way to acknowledge them? Well, the first thing you should do is find out exactly how each of your employees prefers to be thanked. Do they like the idea of being recognized in front of the company?

Recognition Ideas

Consider adding a section to your weekly company meeting that highlights the upcoming anniversaries in your organization. Or, if they prefer to stay in the background, simply give employees a handwritten note thanking them for their previous year of excellence. A templated email makes it easy for you while maintaining a personal touch. Thank your employees in the way that will mean the most to them!

Reward Ideas

Now comes the reward. If pins, plaques, and paperweights aren’t enough, what sorts of things are most fitting to reward employee loyalty? We actually have a whole section on this coming up in part 3 of this guide, but the overarching advice we want to give you is to make it personal. Cash is an excellent gift for many events, but employees will appreciate something more tangible—something that shows them you thought about them specifically. 

Do Service Awards Have to Cost a Lot?

Nope.

Alright, we’ll elaborate. You may think that trying to keep track of everyone’s work anniversary AND creating customized gifts and rewards for each and every one of them is too much work to handle. And, well, when you put it like that, it does sound like a lot. But trust us, it doesn’t have to be! The Awardco platform sets reminders for work anniversaries.

As for the gifts, not everything has to have a price. You could give each employee a shout-out on LinkedIn, make a commemorative video featuring their managers or executives, or let them park in the coveted parking spot closest to the doors for a while. As mentioned before, hand-written cards are a great, budget-friendly way to show personalized appreciation.

So now that the ideas are churning, how can you make a recognition program that sticks? The best answer is to create your very own employee service award program, which we’ll review in the next section.

Employee Service Award Programs

An employee service award program is just what it sounds like: a system that controls how service awards work at your company. How they’re managed, what rewards are offered, how they’re sent out, and every other aspect of a service award.

And service anniversaries are one of the few celebrations that we recommend every company has as a type of employee recognition program. Every employee has a birthday, and every employee has a work anniversary. So when you’re trying to decide which recognition programs are right for you, think about those two opportunities to recognize and appreciate everyone.

How Do You Create an Employee Service Award Program?

Traditionally, service awards programs have consisted of a glass trophy or a plaque the company gives to the employee after a few years of service. But that’s not enough. When you set up an employee service award program, you should curate an experience that will be memorable and special for each individual employee. Instead of contributing to the 25% of employees who have received gifts they don’t want, make a service award program that really rewards them for a year of hard work!

After all, the point of service awards isn’t to say, “Hey, you haven’t quit yet and it’s been a whole year!” You want to say something more like, “We really appreciate the hard work you’ve put in over the past year, and we want to reward you for it.” Think about birthdays—we’re not celebrating the fact that a person didn’t die; we’re celebrating their life and everything that makes them unique!

You can use employee service award software to follow this pattern of genuine recognition and create a service award program that knocks it out of the park. Software lets you automate the process, send reminders, and provide rewards in easy-to-use tools and platforms.

A Suggested Service Award Schedule

We've talked about the traditional method of service awards, so we won't go into too much detail here. Suffice to say, many companies stick to a model that looks something like this:

• After 5 years, employees receive a plaque with their name on it
• After 10 years, employees receive a trophy thanking them for their service
• After 15 years, employees receive an even fancier trophy in the shape of a “15”
• After 20 years, employees get a company pin, a branded jacket, and another fancy trophy‍

‍Do you see what’s wrong with this picture? How many people want plastic trophies from their company (no matter how fancy) thanking them for decades of their lives? Fortunately, this model of service recognition is outdated and many companies don’t use it anymore, but it hasn’t been wiped out completely.

We want to suggest a new service award program schedule that rewards and recognizes all of the steps your employees take on their journey with your company, large and small. Instead of waiting five years to start handing out service awards (since the average tenure for jobs nowadays is only 4.1 years—yikes), here are some suggestions that will start every employee off on the right foot:

• Onboarding. The first few days and weeks of a brand-new job are difficult and overwhelming. Start your service award program at the very beginning and thank new employees for having the courage to join the team!
• Three-month milestone. The only thing harder than the first few days is the first few months. At this point, employees are starting to feel out their role and learn their responsibilities. Thank them for their efforts and encourage their success with another small service award. And it doesn’t have to be big—a handwritten note is better than nothing!
• One-year anniversary. You can use this event to set the tone for the rest of your employee’s tenure. They’ve worked hard for an entire year and are really starting to hit their stride; give them a service award they won’t forget! Recognize them for all their efforts over the previous year!
• Two-year anniversary and beyond. You should recognize each employee every single year. Don’t settle for five-year increments. Give them personalized rewards that they’ll love every year, and make sure the rewards reflect their service. If just thinking about the budget and time involved in this kind of system stresses you out, Awardco is here to help! With our automation options and customizable programs, you can save time and money while still recognizing your employees.

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We’re not saying that you can’t give out plaques to commemorate five years of service. Many employees appreciate those sorts of quality, attractive displays. However, we are saying that you must broaden your horizons and expand your definition of service awards. 

During onboarding, give them a handwritten note from their manager expressing their excitement at this new opportunity. At the three-month mark, give them a gift card to their favorite restaurant. Or, even better, let them choose what rewards they want for their service each year (that’s an Awardco speciality—more below!).

How Do You Manage a Service Award Program?

You may be thinking, “How am I supposed to manage a robust employee service award program and still have time for my other responsibilities?” That’s a completely natural worry to have!

Traditional service award programs have stayed popular because they’re familiar and easier to handle than a completely revamped system. But your new program doesn't have to be intimidating or convoluted to be effective.

In fact, with different recognition software programs and platforms (such as Awardco, nudge nudge), managing your employee recognition programs is easier than ever. If you don’t believe us, one of our recent clients saved 296 work hours over a year while using Awardco instead of their old platform. That’s 37 business days’ worth of time back in your pocket!

With easy integration into popular tools and a whole host of automation options, you can set up your employee service award program to fully reward employees in a heartfelt, genuine, and personalized way while simultaneously saving you hours of effort. Talk about the best of both worlds!

Tips for Successful Award Management 

Even with a platform like Awardco on your side, you still have control over major decisions about implementing a service award program. 

To develop your award criteria, follow these steps: 

• Decide when to award employees. The first step in creating a reward program is to outline clear and measurable criteria for your service awards. Are they based on hire dates (like we suggest later) or something else? Would something like a performance plan exclude an employee or delay their award? Decide these details up-front so that your program is fair and consistent. 
• Plan a realistic budget. Awards programs should be sustainable enough to celebrate everyone—on top of their established compensation. To achieve that, you need a budget that works for your company. We suggest creating a budget based on your company’s size and turnover rate. 
• Pick personal, relevant rewards. Rewards are only exciting and motivating if they’re wanted. Focus on individual circumstances when choosing awards and offer choices and customization whenever possible. With every reward, include a personalized touch to make them as meaningful as possible.
• Tell everyone about the program. In addition to creating and implementing the awards, you’ve got to tell people about them! If your employees know that a reward is coming their way, it’s even more impactful than a spontaneous surprise (though we advocate for those, too, when appropriate). Clearly communicate about your program in onboarding sessions, manager trainings, and company meetings. 

Include these details in a written document for easy reference, like your employee handbook, so everyone knows what to expect.

Make Decisions With ROI in Mind

If you’re investing in a program, you want it to accomplish what it’s supposed to do—make employees feel celebrated! There’s no point in continuing with a customized award program if employees don’t like it or it doesn’t serve your bottom line. 

As you implement award programs, consider ROI. Solicit feedback from your employees and monitor your success. Our ROI calculator can determine your ideal budget and provide more information.

Potential Pitfalls of Service Awards (and How to Overcome Them)

Have we mentioned that standard service awards don’t work well? As you’re replacing something outdated, don’t fall into new programs that won’t work any better. 

Watch out for these common problems with award programs: 

• Lack of clarity and consistency. If award criteria are ambiguous or poorly defined, it can lead to confusion and resentment among employees who feel deserving but aren’t recognized. Plus, uneven application of awards or a biased selection process can damage employee morale and trust in the program. 
• Unrealistic expectations. A new program is exciting and, well, new! But don’t set the bar for success too high. Setting award criteria that are too difficult to achieve can demotivate employees and make the program seem unattainable.
• Recognition fatigue. Part of the fun of an award is that it’s novel and unique. Having too many awards or presenting them too frequently can dilute their significance and lead to employee apathy. 
• Poor communication. Inadequate communication about the program, its goals, and the selection process can lead to employee disengagement.
• Zero personalization. Even if employees know about a program they feel doesn’t apply to them, they won’t care.

Mitigate and Overcome These Pitfalls with Awardco 

Our experience helps you avoid these issues. We’ll help you set award criteria and develop a fair and unbiased distribution process with a strategic frequency for awards. This way, the program is clear and consistent and stays exciting. 

Pair that strategic plan with clear communication, a reasonable budget, and personalized awards. Now you’ve got yourself a winning service award program! Learn more about how we help you recognize your employees.

Employee Service Award Ideas & Examples

Now we’re getting into the nitty-gritty details. We all know service awards are a vital part of helping your employees feel connected, appreciated, and engaged at work, and you now have some ideas on how you can create your very own service award program. Now we want to provide some concrete examples of what you can do for each of the service milestones that your employees hit throughout their career at your company.

The first few days of employment are your best opportunity to establish a good first impression of your culture. With the right service award, you can set a tone of excitement and recognition for each new employee. Here are a few gift ideas to make this milestone a little less frightening and a little more fun:

• Branded swag box. Help your new hires fit in with a box of swag catered to their tastes and preferences. Send out a questionnaire to learn about each new hire so that you can choose a mug, a sweatshirt, a t-shirt, or a hat that suits each person best.
• The “I work at a tech company” pack. Do your employees need any sort of equipment to do their jobs? Provide them with earbuds/headphones, a power bank, a microfiber cloth, or a fun mousepad to start them off right.
• Work-from-home kit. Will your new employees primarily work from home? Provide them with some equipment to make their lives easier. An ergonomic mouse or keyboard is a great idea, and you could even toss in a plant or a candle to improve their work environment.
• Work-life balance pack. Show your employees that you care about their work-life balance from day one. Provide self-care books, healthy snacks, a salon gift card, or other self-care products to enhance relaxation.
  

The beginning of an employee’s career with your company doesn’t have to be hard. Make the onboardig process fun and exciting. Celebrate such a big step in their lives and show them that you’re ecstatic to have them on the team!

Your new employees have survived the first chunk of their new paths. They’ve climbed the steep incline of the learning curve and are just starting to feel confident in their new roles. Celebrate such an awesome point in their career! You should never let this type of milestone pass by without some sort of recognition. 

Check out some ideas of ways you can make this seemingly unimportant day one that your employees will never forget:

• Handwritten note. This is one of our favorite ideas. Now that managers and executives have had a chance to work with newer employees, have them write a personalized note to them. A note will help the employee feel noticed and valued.
• Public (or private) recognition. Learn whether each person is comfortable in front of crowds. Then, you can either bring your employees up in front of the company to congratulate them on their hard work or post a meaningful thank you on LinkedIn or another recognition feed. 
• A day off. After three months of hard work, your employees deserve a day off. If PTO is accrued, give them the day without taking any from their total. If you offer flex-time or unlimited PTO, think of ways to make their day off more special, such as a gift card to their favorite restaurant.
  

The three-month anniversary may not seem like a big deal on the outside, but new employees will love the confirmation that you haven't forgotten them now that they’re not “new hires” anymore. Plus, this is your chance to reaffirm your commitment to recognition. 

We’ve made it a year! Your new employees no longer feel new—they feel like valuable, contributing members of a close-knit team. This is your chance to thank them for an entire year’s worth of hard work and dedication. Whether they work in an entry-level position or a management spot, a year should be celebrated.

If you’re unsure what you should do to celebrate this milestone, check out these employee service award ideas:

• Promotion and/or raise. Most employees appreciate more money. When you tie a raise or promotion into their one-year service anniversary, employees will know that they're a valued part of the company.
• Career growth and development. Does your employee want to learn a skill that will help them improve? Provide a paid course to help them achieve their goals. As you invest in your people, they’ll invest more in your company.
• Team party. Get everyone together to celebrate this milestone. Bring food and games, and ensure the service award recipient gets a say in how the celebration goes down.
  

Year one is a notable milestone for any employee. Make sure you show them that you recognize their accomplishments and value everything they do for the company.

They made it. Three years later, and your employees are old hats now. They still are learning and improving, but they’re contributing daily to the company’s growth and success. How do you reward someone for spending three years of their life working for you? Here are some ideas for a length of service award:

• Luxury item. This is an excellent idea, but ensure the item fits your employee. Would they like a nice watch or a set of golf clubs more? Maybe they’d prefer a new set of luggage or a cutting-edge computer monitor.
• Paid vacation: A weekend getaway may be just what your workers need after a few years of effort. Find ways to help them afford a trip to a destination of their choosing, whether plane tickets, attraction admission, or travel expense reimbursements.
• Dinner with their manager. Have the employee’s manager take them out for a nice dinner at a fancy restaurant. Let them bring a +1 to make the dinner much more special.‍
• Bucket list experience. Learn what your employees have always wanted to do, and help them do something on their list (within reason). What employee wouldn’t love a company that helps them accomplish their life goals?

You get the idea. The longer your employees stay with you, the more you need to recognize them for their diligent efforts on your behalf. Five years, 10 years, 20 years, and every year in between. Build your service award program in such a way that recognizes each employee from onboarding to every year they stay with the company. And remember not to be intimidated—not every year needs to be a monetary reward. Find what works for you!

Other Types of Service Awards

You don’t have to base service awards on employment tenure. Honor your employees for accomplishments based on other metrics! 

Some career milestones still have anniversaries, even if they’re not hire-date anniversaries. You can celebrate the anniversary of promotions, particularly for leadership roles. You could also mark other milestones, such as the number of direct reports or a size increase for a department. 

To celebrate these accomplishments, you might offer milestone awards such as:

• A note from upper management. We’ve mentioned this so many times because it’s simple yet effective. For a new or established manager, a note from their boss with meaningful details about their contributions honors the manager–report relationship. You can get creative with the medium here. Rather than a note, consider a video message for an extra special touch.
• A personalized experience.  You may celebrate a significant milestone with something in addition to thoughtful feedback. An experience such as a hotel stay or tickets to an event gives high achievers a night off to relax and recharge. Make this as personal as you can. Get basketball tickets for the sports fanatic or help fund a conference trip for the lifelong learner.
• A team or department celebration. If the team has grown to a certain level, why not celebrate everyone who’s been part of it, not just the manager? Team-bonding activities like games or outings can increase team cohesion and reward them.

Performance-based awards also go a long way in creating a desirable company culture and incentivizing hard work. For an employee with an outstanding achievement or one who exceeds a critical performance metric, you might give: 

• An investment in wellness. Show high-achievers that you care about their well-being with a reward that invests in them. A spa day, fitness tracker, or healthy meal delivery subscription supports their overall health.
• New equipment or accessories. Make your employee’s jobs—or their personal lives—a little bit easier. To honor a job well done, let your employees upgrade a piece of their equipment or pick a new accessory like earbuds.
• Charitable donations. You can offer employees the option to donate their award or a portion of their award to a charity of their choice. Let their hard work give back to a cause close to their heart. 

Whatever you decide, keep a personal touch. Customized gifts paired with personalized cards show just how much you care.

Awardco Revamps Your Employee Service Award Program 

We’re here to help you determine how to revamp your employee service award program so that each of your employees feels that appreciation and value, no matter how long they end up staying at your company.

Awardco allows you to recognize, celebrate, and reward everyone in your company in a streamlined, simple way. You can set up a service award program that perfectly fits your needs, your employees, and your budget.

At Awardco, we have a few different options to celebrate employee anniversaries. One is our MemoryBooks™, a digital book that includes pictures, shared anecdotes, and quotes from everyone on the team! Employees will love the personal touch that comes from everyone getting involved. 

We also offer Bonus Boxes, or boxes customized with your brand that you can fill with all sorts of fun merch. This gift is the perfect way to show that you know and care about your employees (unlike the aforementioned plaque or paperweight).

Success with Awardco 

We feel confident about service award programs and other employee recognition methods because we’ve seen their success. 

After updating their decades-old recognition program, one client saw an 18% increase in employee satisfaction in less than a year. Another decided to let employees choose their recognition gifts from the many products available on the Awardco platform and saw a 29% increase in recognitions.

If you’re unsure which gifts are best or how to set up your program, talk to Awardco. We’ll guide you on your service award journey, and our platform provides unprecedented choice and customization for employee rewards. You’ll soon have a culture where employees are excited to stay for another year—all with minimal effort or stress on your part! 

Get more information about all your options—from service awards to other recognition methods—in our comprehensive employee recognition guide.