Millennials (those born between 1980 and 2000) are forecast to comprise half of the American workforce by 2020, and 75% of the global workforce by 2025, according to Inc. Why does it matter that millennials are the workers of today and tomorrow? Well, according to Gallup, this age group ranks last in employee engagement, with only 29% responding that they are actively engaged at work. Worse still, 16% actually classify themselves as actively disengaged.
How Does Employee Engagement Affect Employers?
A disengaged employee is one seeking a new employer. Gallup’s study found that millennials are changing jobs more than previous generations. While 21% reported a job switch in the past year, a whopping 60% said they would welcome new employment opportunities. Gone are the days of an employee spending decades with a company in hopes of advancing through the ranks.
Employee turnover can cost employers upwards of 30% of that individual’s annual salary due to the time and effort it takes to recruit, onboard, and train new staff. Moreover, the loss of productivity throughout the replacement process can take a toll on operations. Millennials have already taken over the workforce. Is there a way to change course and keep them engaged and excited about their job? The answer is employee recognition.
What Is Employee Recognition?
Employee recognition is the acknowledgement of individual efforts. It’s showing employees that you are aware of their contributions and are appreciative of their roles in the company’s success. Some confuse employee recognition with monetary rewards, but that’s a mistake. After all, 82% of workers find more value in praise than in a gift.
How Does Employee Recognition Affect Employees?
Employee recognition has been linked to advances in individual productivity, workplace engagement, employee retention, and company loyalty. As employees give employers eight hours, or more, of their day, they want to know that their efforts aren’t going unnoticed. Deloitte conducted a study on Millennial values, finding that the majority of them think companies have no interest outside of revenue growth. Employee recognition can combat this belief, with 85% of employees stating that recognition brings a sense of humanity to the workplace.
Gallup’s study tells us that 44% of millennial workers believe that routine manager visits would increase their likelihood of being engaged; however, just 21% report meeting with superiors on a weekly basis. Officevibe confirms millennial suspicions, reporting that 86% of managers say recognition increases employee happiness. Moreover, a study conducted by Great Place to Work found that managers showing sincere interest in their staff boosts agility by 8x and innovation by 7x.
Employees can also help bring recognition to the workplace. Peer-to-peer recognition is 35.7% more likely to have a positive impact than manager-only appreciation, and peer recognition has been linked to a 41% increase in customer satisfaction.
How to Recognize an Employee
Employee recognition isn’t about financial compensation. In fact, monetary rewards only lessen its potential. Known in social psychology as the overjustification effect, adding money to a task decreases employee motivation, while the acknowledgement of a job well done increases motivation. Better yet, social recognition activates pathways associated with positive emotions.
Words of affirmation are the foundation of employee recognition, but there’s more to it than a simple “Good job.” Instead, acknowledgement should be specific to the task completed, tying in how it helped the company. Note: Recognition should be given as close to the completion of work as possible.
Dr. Donald Clifton, author of How Full Is Your Bucket, writes that the main reason people switch jobs is feeling unappreciated. Companies that emphasize recognition see a 31% decrease in voluntary turnover. With a bevvy of business benefits, if you aren’t recognizing your employees, you should be. Otherwise, another employer gladly will.
At Axis41, A Merkle Company, we have seen how employee recognition has helped our staff know we appreciate them and their exceptional work — it’s just one of the many reasons we love working here. Interested in turning over a new leaf in your career? Check out our open positions here.