Years Of Service Awards: A Guide To Recognize Tenure At Work

Finding the right employees can be a difficult task for companies. But employee retention is even more challenging. Despite these challenges, if you have employees who stuck with you through thick and thin, it’s time to give back. Their loyalty and dedication deserve recognition, and one way to celebrate their tenure is through years of service awards.

In this article, we’ll cover the basics of years of service awards and show you how you can make them meaningful. You’ll learn:

• What they are and why they matter
• What a successful service award program should look like
• Tips to modernize your service program with changing times.

We'll also share some much-needed service awards ideas to develop a thriving culture of recognition in your company.

Let's get started.

What Are Years Of Service Awards?

Years of service awards or service awards celebrate the tenure of employees who have worked with the company for a considerable amount of time. It is a type of employee recognition method that includes commemorating work anniversaries or years of services (5, 10, 20 years, etc.).

However, it is to be noted that they are not awarded to employees for simply showing up to work every day. They aim to recognize the reasons that made these employees stay for such a long time. These reasons may include their learnings, achievements, work relationships, and shared successes.

Think about those “participation certificates” you receive when you attend an event. Now compare it to the award that you got for your extraordinary efforts on a project.

Which one would you rather have? I’m sure you’d prefer the latter.

Objectives Behind Years Of Service Awards

A 2012 study found rewards that are disconnected from effort don’t impact employees much.

People want recognition for things they do rather than just their attendance. They want to know that their years of hard work have paid off and played a significant part in the company's success.

Service awards aim to recognize all the above: their efforts, value, and professional development.

Thus, years of service awards have evolved to become more than just celebrating tenure. They are associated with recognizing service milestones at different phases in the employee lifecycle.

That’s why years of service awards are also known as milestone awards. Companies also refer to them as long service awards, employee service awards, or service award recognition. Regardless of the type, they play an essential role in making employees feel valued.

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Understanding Service Milestones

Years of service awards aim to honor employees at different stages of their employee lifecycle. But to provide the right kind of employee appreciation, we need to understand what these stages entail.

Here’s a general understanding of the key career stages of an employee in an organization:

One year:

It is the stage of learning. Employees begin to understand the company culture and are proud to complete their first year.

Three years:

It is the stage of fitting in. Employees become comfortable with their teams. They are enthusiastic and want to grow professionally.

Five years:

It is the stage of expertise. Employees are confident and expert in their areas. They value their work but also wonder about better opportunities elsewhere.

Ten Years:

It is the stage of belonging. Employees feel a sense of ownership in the company. However, they want to solidify their role in the company.

Twenty years

Employees have seen the ups and downs of the company and are considered to be veterans. They prove to be good mentors.

Twenty-five years

It is a significant milestone in an employee’s career. It signifies triumph and is a time to celebrate all the previous accomplishments.

From here, it is primarily a stage of reflection and nostalgia. Employees are more interested in passing on their acquired knowledge.

As we see, employees display different emotions at different phases of their careers. What they go through in their first year will be different from their feelings in their 20th year. These emotions may also differ from individual to individual.

It would be good to consider these employee emotions while planning out the service awards program. However, the trends in employee tenure are constantly going through phases of transformation. Let’s see how.

Changing Trends In Employee Tenure

Consider the following facts around employee tenure: (Source: Bureau of Labor Statistics)

• The average tenure of a salaried employee in 2020 was 4.1 years.
• If we consider the age group of 25-34 years, this number drops to 2.8 years.
• Ten years back, the corresponding figure for all salaried employees was 4.4 years, and for the 25-34 age group was 3.1 years.

In other words, employees today are staying engaged with businesses for shorter periods. Studies have also shown that nearly half of workers get disengaged after six months of work.

Millennials change jobs within the first few years to strengthen their portfolio, higher pay, or better opportunities.

Additionally, it is the era of the gig economy. More and more people are opting for self-employment and freelancing.

It may not be wise to wait for a 5, 10, or 20th work anniversary to recognize their worth. The concept of years of service awards needs to evolve accordingly.

But before we develop our service award program, we need to know why we need to do so.

Why Should Companies Recognize Years Of Service?

Companies should recognize years of service because long-term employees are vital for them.

• People who work with a particular company for a long time become familiar with the company culture. They know about the products and services and have developed expertise in their areas. Having seen the company’s ups and downs, they know what works and what doesn’t and are more likely to get things done smoothly.

• They prove to be great mentors for new employees and are a source of invaluable support to them.

• Moreover, at a time when jobs are at risk, long-term employees reflect a stable work environment. This also improves the morale of the whole workforce.

• Also, it is cost-effective to have long-term employees. The costs of replacing employees, re-recruiting, and onboarding are pretty high. New employees need time to learn and get used to the culture to start doing their job properly. So you’d want your talents to stay in your company.

• Having long-term employees also reflects positively on the company for being able to retain them.

On top of these, there are external factors that make recognizing long-term employees more crucial.

• The millennial workforce is expanding. It is a hard-to-please generation that naturally demands appreciation for its hard work.

• We see companies engaged in a competitive war for talent. Your long-term employees stay with you despite opportunities elsewhere.

• And, during global crises such as pandemics, the worth of skilled employees skyrockets to keep the business running.

5 Benefits Of Having A Years Of Service Award Program

1. Improves Employee Retention

Years of service awards improve retention rates at the company. Employees reportedly stay for 2 to 4 years longer when their company has a dedicated service award program.

2. Increases Employee Loyalty

A Work Institute study reveals that 38% of employees leave jobs in their first year, and 23% leave within 2 to 5 years. HR needs to make every possible effort to retain top employees.

Years of service awards motivate employees to remain loyal to the company. They cultivate a sense of belonging among the employees. When they get genuine recognition consistently, they’d want to stay and contribute to the company’s success.

3. Drives Employee Satisfaction and Engagement

Loyal employees tend to show higher levels of satisfaction. They feel that the company values their efforts, and this, in turn, can drive employee engagement. It improves not only the employee experience and productivity but also the organizational performance.

4. Strengthens Company Culture

When you celebrate service milestones of employees, it sends out a signal to the whole workforce that the company appreciates their contributions. It positively impacts employee motivation and helps reinforce good behavior.

5. Attracts Top Talent

Service awards don’t just help in employee retention. They also help attract top talent. Prospective candidates know that your company values and recognizes true talent.

How To Build A Successful Years Of Service Award Program?

Years of service awards are one of the most popular recognition programs that companies use. More than 85% of companies incorporate them in their reward and recognition strategy.

Companies recognize employees on their work anniversaries and send congratulatory emails. Some programs offer certificates, plaques, and other gifts to symbolize their value. But it can still be a very transactional process.

Companies should strive to turn the special occasion into a memorable occasion. Years of service awards must have a personalized touch so that an emotional connection can be built.

Read more: 23 Awesome Ways To Make Every Employee Work Anniversary Memorable

While designing their service awards program, companies need to consider the following:

• Are there any clearly defined goals and objectives? What do you want to achieve with your service anniversary program?
• Do you know the average employee tenure in your company?
• What are the expectations of the employees from you for their service anniversaries?
• Do they like the last career milestone award that they received?
• Is receiving a service award a memorable experience for them?
• Do these awards reinforce the connection your employees feel towards your organization?

The major goal of years of service awards is to express gratitude to employees. So to find out what makes them feel valued, ask the employees how they want to be recognized.

Try to understand how they feel about existing recognition awards programs. Get feedback from recently recognized employees for suggestions to improve the experience.

Employee surveys and check-ins are of enormous help to gauge employee expectations.

Using this data, build upon a service awards program that is impactful and up-to-date with current trends.

7 Tips To Modernize Your Service Award Program

1. Ensure more personalized rewarding experiences. While appreciating employees, be personal, specific, and genuine. Try to focus on their unique role and how they contribute to the company’s mission.

2. Appreciate daily efforts, but don’t use the same techniques to recognize a major milestone. Combine personalized awards with symbolic awards to make them memorable.

3. Know that 1 or 5 years is different from 25 years. Ensure that the service awards reflect the expectations of the employees at different career stages.

4. Recognize their value, their efforts, and their successes. Don’t limit service awards to simply recognizing length of service.

5. Incorporate social recognition methods by involving team members, mentors, peers, family, and friends in the celebrations.

6. Empower managers with all the resources and tools they need to create a meaningful experience while recognizing the service of their team members. Train them in meaningful storytelling so that they can efficiently highlight employees’ contributions.

7. Include different types of awards depending on the milestone you are celebrating. Ideally, the longer your employees serve, the more value their rewards should be. But it doesn’t mean that you give non-meaningful awards for shorter services.

Years Of Service Awards Ideas

Here are some great ideas to make your years of service awards more meaningful:

1. Symbolic Awards

These include things like service certificates, plaques, service pins, or trophies. They help represent the years of service in a unique, meaningful way. Employees can also connect these awards to something they cherish.

2. Time-off

These may include extra vacation days or weekend getaways. This way, they will enjoy their work anniversary with some quality for themselves. It instills the thought that you care for them and acknowledge their contributions.

3. Personalized Rewards/Gifts

Personalized corporate gifts allow employers to know their employees on a personal level. This paves the way for stronger employer-employee relations.

Consider gifting them accessories like a coffee mug or a shirt with their name on it. For significant service contributions, you may give luxury items or personalized wrist-watches.

Provide them some choice over their service award gift. For example, employees may choose between electronics, work from home items, sports items, travel accessories, etc.

4. Stock Options

You may let your loyal employee buy company stocks at lower prices. Allowing employees to invest in the company makes them feel a sense of ownership. This acts as an acknowledgment of employee loyalty and an effective employee retention strategy.

5. Recognition Letter From Leadership

Instead of a pre-formatted email, arrange to send out a personal note of congratulations from the company CEO or senior leadership. Plan a nice dinner or lunch party or an outdoor event, where you include the senior leadership along the team to celebrate employee services.

6. Gift Cards and Cash

With gift cards or cash, your employees have the choice to get the things they wish to buy.

Points-based reward systems can also come in handy in this case. In this system, points are tied to a specific monetary value. These points are usually redeemable for merchandise and other incentives.

7. Promotions

Work anniversaries are an excellent opportunity to promote deserving employees. Make their work anniversaries special by announcing promotions based on their performance or experience.

8. Training and Development Opportunities

While money and security are essential, the majority of employees seek career growth. Providing them with learning opportunities demonstrates that you care about their development as well.

Pay for a certification course or training session for your employees to level up. Help them with their education expenses through tuition reimbursements. You may also consider giving them options to pursue their hobbies of choice.

Related: 50 Great Work Anniversary Wishes and Quotes for Employees and Peers

Virtual Years Of Service Awards Ideas

Most of the above ideas, like gift cards, stock options, promotions, etc., can also be used to cherish remote workers’ service anniversaries. But you may try out the following ideas to make their special day memorable:

• Arrange fun virtual activities like “things I like about you” or fellow employees sharing fun facts.
• Arrange for delivery of personalized goody bags, gifts, or even their favorite food to their homes.
• Upgrade their work-from-home office setup with new pieces of equipment and other amenities.
• You can send a personalized handwritten letter from their boss or a customized booklet with messages from the team.

Employee Engagement platforms like Vantage Circle offer a Service Yearbook feature, which is a personalized online yearbook. It allows peers to collect and share memories for someone’s service anniversary.

Final Takeaway

Years of service awards programs should aim to make work anniversaries meaningful, memorable, and fun. They should move beyond honoring employees’ contributions to creating an experience that builds an emotional connection between them and the company.

When done well, years of service awards boost employee morale and make employees feel a true sense of belonging in the workplace. They act as a medium of reflection of the good times spent through celebrations of relationships and successes.

This article is written by Swati Baruah who is a content marketing specialist at Vantage Circle. She is a post-graduate in Labor Studies from Tata Institute of Social Sciences. Passionately interested in HR and people dynamics, she enjoys writing pieces that strike conversations. An avid reader and a frequent traveler, she loves exploring new perspectives. To get in touch, reach out to editor@vantagecircle.com