What are long-service awards?
Long-service awards enable an organisation to recognise when its employees reach a particular service milestone. Milestones could be set at one, five, 10, 20 or 40 years, for example.
The type of schemes offered by providers include a combination of tangible and memorable awards. On the anniversary of an employee joining, employers might choose to recognise this by sharing it on an internal communications platform or giving out a certificate. Alternatively, they might issue a financial reward such as vouchers or reward points. Traditional awards such as luxury gifts and cash are still used, particularly for longer milestones.
Furthermore, non-financial rewards can include an extra day of annual leave or something of value to the employee, which can, in turn, improve engagement and morale.
Long-service award providers offer a wide variety of schemes. For example, Boostworks offers flexible long-service award schemes, with automated recognition plans and points-based reward options, eliminating manual administration. Its app enables employees to receive and view internal recognition, and access and redeem points whenever they want.
Meanwhile, Perkbox’s scheme recognises contribution, whether through points employees can spend, digital celebrations across global teams or personal messages from leaders.
Virgin Incentives offers long-service awards in the form of travel, holidays, experiences and days out. It also offers advice on what employers could consider for long-service awards and how to give these out. For example, employers could give staff a day off to have an experience in exchange for feedback published on their internal communications channels, offering a real-life story to promote the award.
What are the cost implications?
The costs include the monetary value of the long-service awards themselves, as well as those associated with running a scheme to handle these. These costs can vary, so employers should consider the type of functionality they need and whether the scheme is UK-based or global. Employers can run schemes manually or through a platform, which may incur a cost to run. Other potential costs include the postage of awards, cards, certificates or add-on services such as branded inserts that sit within award parcels.
Some of Virgin Incentives’ larger customers that order long-service awards weekly, monthly or quarterly can receive a discount for buying in a certain volume.
Are there any tax or legal issues?
HM Revenue and Customs (HMRC) allows non-cash long-service awards of up to £50 per year of service to be tax-free, provided the employee has at least 20 years’ service, and no similar award has been made in the past 10 years. For non-cash awards for service of less than 20 years, or where a previous long-service award has been given in the past 10 years, Class 1A national insurance contributions are payable on the whole amount. Cash or cash-equivalent vouchers are taxable, whereas a physical gift or gift card can qualify for tax exemption.
Different tax implications apply in other countries for global schemes, so employers should always align with local legislation to stay compliant and consistent.
What are the current market trends or developments?
Current market trends in long-service awards reflect broader changes in employee expectations; according to Blackhwak Network’s (BHN) May 2025 research, 63% of employees now want access to a broader and more personalised range of workplace benefits.
Additionally, the concept of long-service awards is evolving because employees no longer stay in jobs as long as they once did. As turnover is costly, employee retention has become a focus, and BHN’s November 2024 research found that recognition initiatives reduce voluntary turnover by around 31%.
Public recognition is becoming more common, with employers using internal communications and social channels to highlight achievements.
Perkbox believes that waiting 20 years or more for long-service recognition has become an outdated concept. Many employers now create a culture of appreciation from the start by celebrating from the first year and then each one after, even with just a shout-out.
Platforms, that automatically track milestones and integrate these into recognition programmes, are becoming more commonplace. This enables employers to deliver instant and customised awards.
According to Boostworks, mobile app-based platforms and points-based reward systems for points redemption on products, vouchers and experiences have increased in popularity, because they are accessible and enable employees to receive recognition and redeem rewards instantly. This can be attractive to deskless workers and younger generations expecting a digital approach. It has also seen organisations looking to consolidate platforms and long-service schemes across their frameworks and global territories.
Employers have moved away from traditional long-service awards to more personalised options, such as experiences and days out, according to Virgin Incentives. It has seen long-service awards being used as a retention tool, with its hospitality clients choosing to reward staff after one year with a gift card to encourage them to stay. Meanwhile, managers physically handing over an award and publicly posting the recognition online for the whole organisation to see is meaningful for staff.
Who are the main providers?
Providers include: Argos for Business, Asda Business Rewards, Blackhawk Network, Boostworks, Buyagift Corporate, Gifteo, Love2Shop, Maritz, Mo, Motivates, New Look Business Solutions, OC Tanner, Perkbox, Prezzee, Red Letter Days, Reward Gateway Edenred, Simply Thankyou, Terryberry, Virgin Incentives and Voucher Express Corporate.
