Calculating the ROI of Employee Recognition Programmes

2 minute read

Did you know, the CIPD predicts the average voluntary employee turnover in the UK in 2024 is around 36%?

As employers continue to navigate an ever-evolving and competitive landscape, balancing this with how to best meaningfully address their people’s wellbeing and stand as an employer of choice, the power of employee recognition in this is often overlooked. Yet, championing an authentic culture of recognition in the workplace has been proven to boost employee motivation and productivity, as well as reduce absenteeism and voluntary turnover. In today’s market, feeling seen, heard and valued for their contributions has become a defining factor for talent when choosing, and remaining with, an employer.

But, what are the business cost savings of prioritising recognition within the People experience? Calculating the actual commercial impact of employee recognition programmes can be tricky. That’s why Rippl’s ROI Calculator is here to help.

How Much Does Employee Recognition Cost?

As we’ll soon explore in more detail shortly, the return on prioritising an effective culture of recognition far outweighs the cost of neglecting this in today’s market. But of course, the investment required to implement and deliver a recognition programme will present differently in every organisation depending on size, industry, location and the scope and complexity of its unique requirements.

Managing and delivering recognition on an ad-hoc, manual basis will incur the lowest cost to business, but all too often this results in inconsistent impact and consistently heavy demand on HR teams. But by investing in the power of recognition software, employers can automate specific milestones, host a digital community that brings employees together wherever they are based, enable multi-level recognition for both managers and peers, and lean on real-time data insights to assess and evidence the programme’s success. Find out more around what this can look like within your organisation.

How Does Employee Recognition Make a Return on Investment?

Landscape statistics demonstrate the ROI from proactively championing a culture of recognition is multi-dimensional – from business outputs, to employer brand and attracting future talent. So let’s dive in.

Engagement

Latest Gallup data shows employees who receive effective recognition are 20x more likely to be engaged at work, compared with employees who receive poor recognition. When teams feel seen and heard in their role, they’re motivated to better engage and achieve great things in their everyday.

Productivity

To create productive teams, employers need to rethink traditional approaches. This comes from happy employees who feel authentically supported to deliver their best – and rather than seeing recognition as a ‘nice to have’, businesses need to view this as a key predictor of employee wellbeing. And, there’s extensive research which points to the established correlation between workplaces prioritising their people’s wellbeing and significantly higher productivity outputs.

Cultural alignment

Employees who strongly agree that recognition is an important part of their organisation are 3.8x more likely to also strongly agree that they feel connected to their culture. Employee recognition plays a fundamental role in bringing a business’ culture to life, by elevating its values to the forefront of teams’ day-to-day and contextualising them for each individual role so they are understood and championed across the business. Instead of values only remaining to be seen on the office wall or desktop backgrounds, they are felt and personified by all when recognised and celebrated for them.

Staff retention

Statistics show employers prioritising recognition and appreciation within the employee experience build teams that are 56% less likely to seek a new role. Because when staff feel authentically valued and like they belong within the business, they not only deliver more within their role but are motivated to stay longer. And, as we know, lost talent is a steep expense for employers, with predictions showing rehiring costs 3-4x the salary of each role.

Talent attraction

As above, championing employee recognition is a key way for businesses to bring their culture to life and deliver on its commitment to create an engaging and positive workplace for talent of all backgrounds to thrive. Particularly within emerging generations, organisational culture is a growing factor for choosing their next employer – 75% of Millennials prioritise this over anything else when choosing a new role. Championing a culture of recognition not only delivers ROI within employee engagement and retention, but elevates the employer brand to attract and hire future talent.

Creating a ripple effect

Data shows among employees who report having great recognition experiences, 72% say that performance on “little things” is most commonly recognized at their organisation. It’s important to value the power of employee recognition outside of traditional business metrics. Recognition shouldn’t be exclusive to exceeded KPI’s or team targets – it should take a holistic approach to celebrating all angles of contribution including performance, creativity, collaboration, service milestones and embodying values to name a few.

The Benefits of Employee Recognition

The events of recent years have shaken up the world of work, placing significant reconsiderations in employees’ heads around why they join and remain within a business. The model of how, where, and when we work has changed drastically – yet, many businesses remain slow in evolving their People strategies to keep up. This has resulted in global workplace phenomena including The Great Resignation and Quiet Quitting, with 85% of the global workforce currently disengaged.

Now more than ever, recognition programmes are a fundamental tool for restoring this connection and re-humanising the workplace to create more motivated, more engaged, more productive teams. 82% of employees are happier when recognised at work, and as we’ve explored, are 56% less likely to search for their next role when they feel outwardly appreciated and valued by their employer.

In today’s increasingly competitive market, recognition can no longer be seen as a workplace perk, but an essential attraction, engagement and retention tool that enables both businesses and their people to get more.

Our ROI Calculator

So how can HR leaders meaningfully assess the ROI of employee recognition programmes? And what are the key metrics to examine?

Rippl’s Digital ROI Calculator is here to do just this. Just enter a few details and within seconds discover personalised projections for:

Total current annual costs to business through disengaged and lost talent.
Total cost savings through delivering recognition, as a result of reduced turnover and absenteeism rates.
Monetary and percentage ROI from implementing an effective recognition programme.

There’s also the option to take your results to the next level by downloading a fully detailed, personalised calculation report.

Ready to make waves with the impact of your employee experience strategy?

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