The concept of ‘Long Service Awards’ has changed since the days when a carriage clock or watch was gifted to congratulate you on 10, 20 and 40 years’ of employment. Employees today stay with a company for a mere four and a half years, which means almost half of businesses have dropped their long service awards altogether. It raises the question: “Have service awards declined because people aren’t sticking around, or are the awards on offer not desirable enough to make employees want to stay?”
The recent stats clearly highlight the need for service recognition to be reinvented, and that the time has come to drop the ‘long’. Why wait 10 years to reward your staff for showing loyalty and dedication? Reward strategies today should include service awards that start recognising and celebrating employee commitment much sooner.
Our article explores everything you need to know about service awards and what a recognition programme of this kind should look like now, and in the future.
Let’s start from the beginning…
What is a Long Service Award?
A long service award is a gesture of recognition to thank your employee for working with your company for a certain length of time. Traditionally, long service awards have been celebrated for 5, 10, 25 and 40 years’ of employment with a business. However, as employees today are hopping from one role to another more often, service awards for the current workforce need to recognise commitment from as early as 1 year of service.
What should an employee service recognition award programme look like today?
The ultimate aim for any service recognition programme is to show your workforce gratitude towards their dedication. This will make them feel valued, which in turn will encourage them to stay longer.
Our reward experts’ advice is to follow four essential steps when developing your service recognition programme. These are:
Step 1. Develop a solid Service Award Strategy
Every service award recognition programme should start with a strategy. Elements covered in your strategy should include:
- What are your goals?
- How will you measure your goals?
- Who will lead the programme?
- How will you engage employees?
- What would the ultimate outcome look like?
Once you’ve got a clear direction documented, you can then start scoping out the details to meet your recognition objectives.
Step 2. Decide your Service Award length
As the length of time an employee stays with a company today has shortened, so must your recognition of service. We recommend engaging your workforce from at least the three-year mark to make them feel valued and give them an incentive to stay.
Don’t overlook employees who are putting in a lot of effort in their first and second years either. These employees are often the most motivated and driven. Reward them for their commitment while their engagement is high to inspire them to stick around.
It is of course important to still have recognition for 5, 10, 15 and 20 plus years in place. You obviously want to encourage and reward employees for staying this long – even if the stats say they won’t.
Step 3. Put in place valued Service Award gifts
You may think recognising your workforce for their ‘service’ more regularly will become too cost heavy, however the reward doesn’t have to be expensive. Blackhawk Network research shows that 75% of employers who felt valued, also received appreciation from their employer, therefore it’s important you offer something. Even, a virtual high-five will do.
Service awards can range from anything from a verbal thank you to extra annual leave or a gift card. The main thing is that the award you choose connects with your employees and makes them feel valued. The best way to determine what rewards your workforce want is to simply ask them. Find out what is significant to them and what makes them feel loved. For more ideas see our Service Award Gift Ideas below.
Step 4. Communicate your Service Awards
Once you have your strategy defined, identified your milestones and decided on your rewards, the final piece of a good service recognition programme is: communication. If your employees’ are not aware, or constantly reminded, about the awards on offer to them they won’t feel any kind of incentive to remain loyal.
There are many ways service awards can be communicated. Always remember to promote your programme as much as possible - more is much better than less. Communication channels you can use include:
- New employee starter pack – tell your employees right from the moment they join your business (even if you mentioned it at the interview stage). If an employee is aware their new employer values their time and dedication it will support their engagement levels, right from day one.
- Mid-service communication – imagine you’re an employee starting to get itchy feet. You then get an email from your employer reminding you there’s only 6 months to go before you receive a service award. This type of communication makes employees reconsider their thoughts and reminds them that they work for a company that values them.
- Celebrate achievements – when an employee receives their service award make sure it’s publicly celebrated. Talk about it on internal communication platforms and collateral, and if possible announce awards in front of peers. Some businesses hold service award ceremonies and present awards to multiple employees at the same time. This always goes down well and makes staff feel even more special.
Top Long Service Award gift ideas
Deciding the right rewards for your service recognition programme is probably one of the hardest elements to get right. Our experts recommend you include different award types and values for the milestones you celebrate, whether that’s 1, 5, 10, 20 or 40 years’ of service. The longer years of service should obviously be higher in value, however it’s important not to displease shorter serving employees with non-meaningful gifts.
The most crucial element is to ensure whatever rewards you choose make your employees feel valued. To be confident in your decision it’s advised to ask your staff what they’d like to receive. You won’t be able to please everyone, but you’ll get a pretty good steer on what makes your workforce tick.
To help your decision we’ve listed the top 5 Service Award gift ideas used successfully by businesses across the UK:
1. Gift Cards
2. Memorable experiences
3. Extra paid holiday
4. Luxury gifts, such as champagne
Employees tell us again and again that they want flexibility and choice when it comes to rewards. This is why our own employee long service award packages include multi-retailer gift cards and personalised memorable experiences, such as:
Select is a digital reward platform that enables your employees to turn Select Codes into digital or physical gift cards. The denomination of each Code you can send allows up to £5,000, which makes it a popular choice for higher value recognition.
Once your employee receives their Select Code they can swap it for the gift card or eGift of their choice across a plethora of brands, including retailers and restaurants. Employees’ tell us they like being in control and get satisfaction from choosing something they really want.
Select can also be personalised to the look and feel of your company, and the digital aspect means everything can be done online in an instant. However, if you prefer physical rewards, this option is available too.
Your employees’ will be able to shop in thousands of retail and restaurant locations across the UK with our One4all gift card. Each gift card has a maximum value of £120, which makes it a favourite for smaller, more regular, rewards.
If you can get your employees’ to choose their own reward this encourages an increase in engagement as you help them to create memories on top of feeling rewarded. They’ll remember the feeling of enjoyment they got from their purchase (whether it’s an item or experience) far longer than a bottle of champers. These memories will be a constant reminder about how much you value them.
One4all gift cards can be given in a physical or digital format, and there’s also the ability to brand the cards with your company’s logo and preferred design.
Envy is our experiences reward. It provides a vast range of experiences your workforce can choose from, such as spa days, hot air balloon rides, and driving supercars. We find many businesses enjoy rewarding their employees’ with once-in-a-lifetime-experiences and offering an opportunity for them to encounter something new.
As with our gift cards, Envy allows your employees’ to choose their own experience. They can also upgrade their package if there’s something else they wish to try. Envy rewards can be presented in both physical and digital formats, whatever suits your business best.
Other common questions asked about Long Service Awards
We promised our long service awards article would cover ‘everything you need to know’. Keeping to our promise, we’ve answered some questions that are frequently asked to help you decide on the best service awards strategy for you:
Are employee service awards taxable?
Service awards made before an employee has been with your company for 20 years, are taxable, but can be exempt if the value of the reward is £50 or less (see our ‘non-taxable trivial benefit’ article). However, if your employee is receiving a service award for 20+ years’ service (and has not received a service reward prior to this) the tax is exempt if the reward value is no more than £50 per year of service (approx. £1,000).
Are retirement gifts in the UK taxable?
Retirement gifts in the UK are taxable, unless the employee has not received a long service award prior to this.If a retirement gift is the first service award an employee has received, then it is exempt from tax up to the value of £50 per year of service. If this is the case, the gift must be received in a gift form (item of gift card), as any cash gifts will always be treated as taxable.
Can Service Awards be cash?
Yes, service awards can be given as cash, however cash gifts are always taxable. You and your employee would benefit more from an item or gift card reward as these can be exempt from tax, as long as they are £50 or less per year of service.
If you have questions or would like to chat about how Blackhawk Network can support your long service awards strategy, fill in the contact form on your right and we’ll be in touch.