According to a Gallup study on workplace recognition, employees who say their contributions are recognized are less likely to feel burned out, more likely to thrive in their overall lives, and less likely to look for new job opportunities. And yet, the same report shows that most companies fall short in this area, with just one in five leaders saying that recognition is a major strategic priority for their organization.

When it comes to employee recognition, many organizations struggle with the “how” – which is where modern technology, such as employee experience platforms, comes into play. But also, many companies struggle with the “why,” as executives don’t always appreciate the power of a few words of praise or a simple thank you.

Here are five things every human resources leader should understand about employee recognition in the workplace.

Recognition Has Measurable Benefits – Some people might hear the words “employee recognition” and dismiss them as meaningless fluff. These people are wrong. Taking the time to meaningfully recognize employee efforts benefits both workers and companies – and there are numbers to back this up. According to Gallup, people at organizations with an effective employee recognition strategy are between four and five times as likely as others to be engaged with their work, to feel connected to their company’s culture, to see a path for growth at their organization, and to recommend their employer to friends and family.

These sorts of benefits show up essentially whenever anyone looks at this question. A Shopify survey, for example, found that 82 percent of employees are happier at work when they’re recognized in the workplace. The same study also found that employees who don’t feel recognized are twice as likely to quit their jobs. And in a survey of younger workers conducted by payroll technology firm daVinci Payments, nearly 80 percent said that an increase in recognition rewards would make them more loyal to their employers.

What does this actually mean for companies, though? Quite a lot, as it turns out. Looking again at the Gallup study, researchers concluded that creating a culture of recognition can save a 10,000-employee company up to $16.1 million per year in turnover costs.

Workers Notice A Lack Of Recognition – In the daVinci Payments survey, half of the respondents said their management does not recognize strong job performance, and 76 percent said they are “seldom to never” eligible for employee rewards. According to Gallup, only 23 percent of employees strongly agree their organization has a system in place to recognize work milestones. And an even lower number – 19 percent – strongly agree that recognition is an important part of the culture at their workplace. That’s around the same portion who said their company or manager is “horrible” at recognizing them in a survey conducted by the Achievers Workforce Institute.

In short: People are paying attention to the recognition efforts of their employers and evaluating them against their own expectations. And as of now, the reviews aren’t great.

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