How Employee Appreciation Impacts Your Bottom Line

The U.S. labor market has experienced a seismic shift over the last few years. As a result, many businesses are transitioning from “the Great Resignation,” a time when many employees left positions for better working conditions and higher pay, to the more recent “Big Stay,” which has seen employees remain in positions longer.

The numbers tell the story: U.S. employee quit rates dropped in 2023 to levels not seen since February of 2020, just before COVID. While this suggests companies are having less trouble with retention, employers must not become complacent in their efforts to retain valued employees. In fact, a 2024 survey conducted by Guild found that 81% of business executives are concerned about losing top performers who are unengaged in the workplace. To effectively keep workers, businesses need to understand the importance of employee appreciation, which can reduce bottom-line impacts by limiting employee turnover and increasing retention.

Turnover is Costly

Lower quit rates typically indicate fewer people looking to change jobs — meaning when employees do leave, employers will find them more difficult to replace. The financial cost of finding and hiring the right candidate adds to the challenge. A 2022 report from the Society for Human Resource Management illustrated this challenge when it found the average cost per hire has risen to nearly $4,700.

Turnover is also costly in terms of time – consider the weeks required to post, interview and fill vacated positions. On average, open positions require 42 days to fill, and when you add the additional months to finish onboarding new employees, it is clear that it would be more productive for companies to retain current employees. This combination of bottom-line impacts and time lost to turnover creates a significant incentive to prioritize employee retention.

Appreciation is Essential for Retention

At the risk of stating the obvious, workers appreciate feeling appreciated. In fact, 30% of employees surveyed in a 2023 InComm InCentives report would consider leaving their job if they felt unappreciated. That trend may spell trouble for some organizations as the report went on to discover many employees say their workplace lacks any sort of recognition or incentive program. Consider these significant findings:

• 17% of surveyed employees said they receive only negative comments at work or no feedback at all. In other words, there is a lack of recognition for doing a good job and little to no interaction with their bosses.
• While peer-to-peer recognition is taking place, there seems to be a disconnect between executives and management recognizing their employees. In fact, peers report they recognize each other more than their managers — with 55% of employees saying that they recognize their colleagues' efforts at least once a week.
• Nearly 20% of employees said they did not receive any type of feedback or recognition over an entire calendar year.

Organizations can stand out from their competitors in the job market simply by making a concerted effort to recognize and appreciate their workforce. So, what do employees need to feel valued and appreciated by management? They want rewards that are meaningful to them.

The InComm InCentives report found that monetary rewards ranked at the top of employees’ most preferred forms of appreciation. One reason for this is that monetary rewards give employees a choice – in other words, they can purchase the item or experience that is most meaningful to them. Employers can lean into this preference through gift cards, which provide an easy way to disperse funds. Additionally, employees could be given their choice of a gift card to ensure they can spend their reward at the retailer, restaurant, or service provider they desire.

Partnering with a gift card supplier to efficiently place bulk orders is a cost-effective way for organizations to express appreciation to employees, boost morale, reinforce positive behavior, and ultimately contribute to a positive and productive work environment.

The Enduring Role of Employee Appreciation

The labor market’s evolving landscape underscores the need for businesses to grasp the significance of employee retention. Despite decreased quit rates, the cost and time investment in replacing employees remain substantial. Recognizing the pivotal role of appreciation, companies can address turnover costs by prioritizing employee satisfaction.

Building on this, developing and maintaining a strong company culture becomes crucial in retaining talent, as executives can leverage incentive programs to showcase meaningful appreciation. Businesses are encouraged to extend their gratitude strategies organization-wide, encouraging happier employees and stronger relationships with partners and customers.