Long Service Awards: what’s the best approach for my business?

By Jamie King

One of the most frequent questions we are asked by our clients and potential clients is about how to best implement and reward staff for long service. This is not quite as simple as the question may seem and there are a number of considerations. For example, is your business the sort of organisation where people stay and make a career and how many employees do you have? In addition, do you reward with cash or benefits, or both? There is no “one size fits all” answer to this, so the best advice we can give is to get a truly in depth understanding of your employees and what they want.

There has been some interesting research on the topic of long service rewards by online resource Xpert HR (2017), which found that only around 60% of organisations provide long service, awards. This in itself was surprising. However, the result of the research raised some interesting points:

Timing of awards
It is most common to recognise employees’ service throughout their career, with 30.7% of respondents reporting that they give five or more long-service awards. A great example of this is Tesco who have recently introduced a long service award scheme that rewards staff on ten-year milestones up to 50 years. The typical minimum service required to receive a long-service award is 10 years. 14% kick off their long-service programme at 25 years’ service. The maximum length of service rewarded among the research sample was 50 years.

John Lewis is often lauded as one of the best companies to work for in the UK and its employee benefits are a huge part of that. It puts a big emphasis on rewarding its staff and is proud of the number of long term staff it has. Its long service rewards are based on 25-Years’ service and stated as follows “Partners with more than 25 years’ service can take paid leave for six months. This is seen by many Partners as an opportunity to learn new or develop existing skills or talents in sports, the arts and languages and to travel extensively”.

A number of organisations celebrate just one year’s service (albeit with low-level awards such as a card or certificate or chocolates). This is being seen far more frequently and is a reflection of modern work ethics.

  • Typical awards at other common milestones include:
    The research also looked at the monetary value of those milestones what additional gifts were given to staff. The interesting takeaway here is that once the monetary value reaches a certain level it does not increase but the additional “gifts” do increase.
  • Five years’ service: most common award value is £100, although payments range from £15 to £1,000. Non-monetary awards include a company pin, badge or letter; dinner with company directors or managers; champagne; and one month’s unpaid sabbatical.
  • At 10 years’ service, the median gift value rises to £150. Awards range from a certificate, badge or pin, to a Rolex watch, a free flight (within a specified list of destinations), a gold coin, three months’ paid sabbatical and lunch for two.
  • At 15 years’ service, the median value of gift is £300. Rewards on offer include a one- or two-night stay away, two weeks’ salary, four weeks’ paid leave and lunch for two.
  • Payments for 20 years’ service are also worth £300 at the median, although in one organisation this rises to £7,500. Other generous awards include one month’s salary, and four weeks’ paid leave. One organisation gives employees £200 to donate to a charity of their choice.
  • Among the handful of organisations marking 50 years, the typical payment is £500.

Understanding what your employees want
Earlier this year (2018) we conducted our own research of nearly 2,000 employees on work-related rewards, which provided some interesting findings when viewed in the context of long service awards.

  • Annual leave and public recognition are the most popular work-related awards: 43% of those surveyed picked annual leave as the work-related benefit that would make them feel most loved at work.
  • The timing of rewards is important: employees want to receive rewards spontaneously and for good work (47% and 38% respectively) over traditional calendar events.
  • Employees were more likely to value bespoke, personalised awards over money.

What does all this mean?
It is clear that companies such as John Lewis and Tesco who all employ thousands of staff put a huge emphasis on recognising their staff for their loyalty. However, the nature of long service awards is changing in line with attitudes to long service itself. Today’s employees are less likely to stay in a job for 20 years at a time. According to insurer LV, the average length of service for a UK worker is around 5 years.

Lower value, more frequent workplace anniversaries may be more appropriate and we expect to see a move away from the traditional 25 years’ service award towards 1, 5, 10, 15, 20 and 30 years recognition. It’s a great opportunity to recognise hard work and motivate and engage your team.

There, is always a danger of backlash when putting a monetary value to someone’s loyalty. Glassdoor is full of people posting about how bemused they are that their loyalty is only worth £10 a year. In our experience, employees want things that are going to make a difference to their personal lives and interests, whether that be extra holiday, an experience of their choice or a personalised gift (not a carriage clock!).

At the same time the workforce is ageing, meaning there is a bigger breadth of ages, demographics and interests. To address this, you need to give your employees choice by having a clear value banding for each landmark and a choice of different rewards (cash and non-cash) to be chosen by the recipient themselves.

It is always good to look at what the likes of John Lewis, Morrisons and Marks and Spencer are doing for their staff but remember that every company has a different workforce demographic. This has to be taken into consideration along with the average employee lifespan, size of workforce and therefore potential cost to the business.

If you would like more information about implementing bespoke reward and recognition programs for your business, please get in touch.