Will Employee Service Awards Disappear in the Gig Economy?

If you have been working for any period of time you may have worked for a company that recognizes employees for years of service. Many of you that have worked for your company for more than 5 or 10 years may even have such an award, but the changes we are seeing in the workplace and in the nature of work will these service awards become a thing of the past?

Many Companies Have Service Programs

According to a survey by SHRM and Globoforce 74% of companies report that they still have service anniversary programs. Companies hope that these programs engage employees, increase employee satisfaction, make employees happy, renew employee commitment and more. Unfortunately in this group there is a mixed bag of results. The study said “…only 22 percent of companies reported having an excellent program, 47 percent rated it as good and a full 31 percent rated their program as fair or poor.” The organizations that have these programs say they could be improved and be more effective if:

  • The employees were given a more inspirational experience
  • Upper management participated more
  • Better awards were used
  • More money was put into the program
  • There was a more modern program
  • Something that could be shared with family

And more. I think there is another reason service award programs are not effective.

Do People Stay 5 Years?

I think service awards are becoming increasingly ineffective in the goals of increasing engagement, increasing satisfaction and making employees happy because fewer and fewer people are staying long enough to earn a service award. According to the Bureau of Labor Statistics the average job tenure in the United States in 2014 is 4.6 years. Only about 29% of workers have job tenure of 10 years or more. In fact the BLS says:

“Median employee tenure was generally higher among older workers than younger ones. For example, the median tenure of workers ages 55 to 64 (10.4 years) was more than three times that of workers ages 25 to 34 years (3.0 years). A larger proportion of older workers than younger workers had 10 years or more of tenure. Among workers ages 60 to 64, 58 percent were employed for at least 10 years with their current employer in January 2014, compared with only 12 percent of those ages 30 to 34.”

The Gig Economy Doesn’t Produce Tenure

As we move into a gig economy model we are going to find an increasing irrelevance and effectiveness of service awards. Workers are looking for flexibility and experience and will move from company to company for that experience.

So for those of you that are betting the bank on the ability of your service award program I would suggest you revisit that idea.

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Mike Haberman

Michael (Mike) D. Haberman, SPHR is a consultant, speaker, writer of HR Observations, and co-founder of Omega HR Solutions, Inc. After over 30 years in HR he got tired of the past and focuses here on the Future of HR. Connect with Mike.


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