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Everything You Need to Know About Service Awards (Best Practices and Examples)

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April 1, 2024

Anniversaries matter. That’s true not just in people’s personal lives, but also in their work lives.

And in today’s competitive hiring market, you want to do everything you can to recruit and retain the employees that make your business a success. This is where service awards come in.  

Service awards celebrate and commemorate employees at major career milestones. They’re a time to reflect on each person’s accomplishments, help them feel valued and seen, and communicate your organization’s values.  

Employee service awards are a critical part of any recognition program—and they can (and should) go beyond giving out certificates, plaques, or pins for retirements. Let’s look at how to build the best years-of-service award program possible.

What are service awards?

Years-of-service awards commemorate the amount of time a person has worked for their company. These awards are often given out for lengths of tenure, such as 1, 5, or 10 years.

Your company might call them something different: milestone awards, service awards, service milestones, length-of-service awards, employee anniversaries, or service anniversaries.

But remember, employee awards for years-of-service can be about so much more than the length of a person’s tenure. When you commemorate a work anniversary, make sure to call out each employee's particular contributions—their accomplishments and everything they have brought to their role.

To be as meaningful and effective as possible, service awards need three ingredients: Celebration (a gift the employee truly wants and chooses), Relevance (a symbolic award to connect the milestone to the organization), and Presentation (personalized messages, often including a printed keepsake, from leaders and peers to make the award authentic and memorable).

Collage of the Culture Cloud service award experience with a custom yearbook, online messages from teammates, a mobile app experience, a custom numeral, and awards.

Benefits of service award programs

Your service awards program has the potential to improve your organizational culture, business outcomes, and the workplace experience of each team member.  

And keep in mind, while it may be a stereotype that only older workers value years-of-service awards, the reality is quite different. Even the youngest members of your workforce care about being recognized for the length of time in their job—whether it's 5 years or even just one.  

Everyone, including members of Gen Z, wants to know their work makes a difference. Younger workers in particular want to be seen, heard, and recognized. They want to know you care about their contributions.  

Seventy-five percent of managers believe managing multigenerational teams is a challenge, and 77% of employees say “different work expectations” between generations are a challenge. Years-of-service awards can help bridge those gaps.

3 ways a service award program benefits your business

1. Reduces turnover

Research shows that years-of-service award programs improve employee retention. Employees stay at organizations for 2–4 more years when their company has a strong service awards program that celebrates employee tenure in meaningful ways.

Bar graph: The average number of years an employee plans to stay with their current comapny. The average number of years for companies with no service award program was 8.6. Companies with a mid-rated had an average of 10.5. And companies with a high rated program had an averaged of 12.7 years.

2. Improves employee experience

Compared to employees at businesses that don’t have service award programs, employees at organizations with service awards programs report higher rates of feeling like their employer cares about them.  

And that benefit extends to all employees, not just those receiving the awards. Watching a team member get recognized, signing their Yearbook, cheering each other on—participating at any level translates into happier employees. (In fact, there’s a 35% increase in employees enjoying a feeling of belonging at work when their organizations offer years-of-service awards.)

3. Builds trust

Years-of-service award programs build employees’ trust in leaders, strengthen loyalty, and shape company culture through stories that illustrate what your organization stands for and cares about. They reinforce that company leadership cares about each employee—their successes and their personal career development.  

Best practices for celebrating work anniversaries

Don’t think of service anniversaries as simply marking time served. Your years-of-service awards should be part of a fully integrated employee recognition strategy that praises everyday effort, rewards results, and celebrates important career milestones.  

Here’s how to build a program that strengthens your workplace culture and delivers meaningful business impact.  

Empower managers

Ensure your leaders and people managers have the resources they need to facilitate a great recognition experience. Find tools that will automatically remind them of approaching anniversaries. Train them on best practices, like using storytelling to prepare a great presentation about the employee’s career.

Culture Cloud Anniversaries by O.C. Tanner shares automated reminders with leaders for team members’ upcoming anniversaries so an important moment is never missed.

Personalize each celebration

Workplace anniversary celebrations shouldn’t feel cut and paste. Each recognition moment should suit both the employee being honored and their specific accomplishments. Celebrate things like personal growth, accomplishments, and relationships—all the reasons people choose to stay.

For example, a 1-year anniversary will feel very different from a 25-year anniversary. At 1 year, you’re celebrating everything your new team member has learned and the relationships they’ve started to build. Now imagine that same team member in 25 years. This is a time to honor the major impact they’ve had on your team and your organization—and the deep relationships they’ve nurtured along the way.  

Involve others

Invite peers, previous leaders, family, and friends to participate in a celebration of the recipient’s work. Consider collecting photos, comments, and stories from co-workers to create an employee yearbook that illustrates the history of one person’s work.

Go the extra mile

Don’t use the same awards for a career anniversary as you would for a thank you or to recognize extra effort. A career anniversary deserves a memorable award. Offer a mix of symbolic items, custom awards, and brand-name awards appropriate for each career stage.

Starbucks celebrates work anniversaries and major milestones with a custom Careerscape to tell the unique story of each partner’s career.
Starbucks Careerscape, an employee service award, with custom branding and collectable pins, designed by O.C. Tanner

Extend the experience

Continue the celebration over lunch or treats. And spread the news of the service anniversary on internal social channels, in newsletters, and through your recognition program.

Teammates celebrating a work anniversary together.
Don’t let your employee recognition moments end at service awards. There is so much to appreciate in your organization, and we share how to do that in our employee appreciation guide.

Service award gift ideas for each career milestone

How employees feel about themselves, their work, and their organization changes over time. Years-of-service awards should reflect those different stages of the employee lifecycle.

Here are suggestions for awards to complement how employees might be feeling at each stage of their careers.

Year 1: Learning

At the end of this year, employees have made it through the initial learning curve and are soaking everything up like a sponge. They are beginning to add value, and they feel pride in finishing their first year.  

Award idea: A Rookie of the Year award can give a major confidence boost to a new employee. Consider giving company swag or a gift card to a local restaurant so they can celebrate. Don’t forget to host a recognition moment in their honor to help them feel seen and valued.  

Year 3: Fitting in

By now, employees are grounded within your organization’s culture and have developed strong connections within their teams. They want to grow and develop and are looking for more opportunities. Giving appreciation for 3 years of service will go a long way toward helping an employee feel they have a place in the company.  

Award idea: Consider giving tech or homeware—something they will use often that will remind them how much you value them.

Year 5: Expertise

By year five, employees are feeling confident. They’re experts in their areas. They value their relationships with coworkers and feel like the company is home. However, they may also be questioning their worth and wondering if they might be more appreciated elsewhere.  

Award idea: Consider giving a basket of specialty items or a unique local experience to celebrate all they've contributed to the company. This is the perfect time for a bigger recognition moment—make sure to invite family and friends and to commemorate the occasion with symbolic tokens that align with your company values.  

Year 10: Belonging

After a decade with your company, employees feel a real sense of ownership. They see their coworkers as family, but they’re still solidifying their role in the growth of your organization.  

Award idea: Staying with the company for 10 years is quite an achievement, so be sure to recognize the special occasion in a big way. Consider gifting a symbolic desktop object or a weekend getaway.

Year 15: Invested

Employees feel settled and can balance their work and personal life. They understand their value and are proud of their contributions to the company’s success.  

Award idea: An invested employee should also be invested in, so don’t let this year pass without notice. Consider giving a glass trophy or a personalized gift box.

Year 20: Veteran

These employees have seen a lot of change, both in their personal lives and in their companies. They have a wealth of knowledge and experience to impart to younger employees.  

Award idea: At 20 or more years of employment, employees deserve significant respect and recognition. Consider giving jewelry, a personalized watch, or a trip package.

Year 25: Triumph

Employees often feel that 25 years marks the most significant milestone and an accumulation of all previous milestones. It’s a time to celebrate victories past and present.  

Award idea: Consider a customized service trophy, a special bonus, or a donation to the charity of their choice.  

Year 30: Mentorship

Three decades in, employees are more nostalgic and reflective. They have plenty left to contribute, but they’re also interested in passing on what they’ve learned.  

Award idea: Celebrate their contributions with something like a bucket-list experience or a party in their honor.

Compared to competitors, 94% of surveyed organizations found O.C. Tanner’s service award selection to be better. See why.

4 tips for offering service awards your employees will love

1. Opt for luxury

Years of research and analysis are resoundingly clear—when honoring career milestones, give employees things they want, not things they need. It might sound counterintuitive, but you want to aim for gifts that would otherwise feel like a big splurge or that the recipient would be proud to show off. Career anniversaries are one scenario where luxury beats practicality.

Be conscious of brands and quality. If you want the award to have a lasting impact, the gift itself needs to last.

2. Curate a wide assortment of options

Your award catalog should offer a wide (but not infinite) variety of items for employees to choose from. Be sure to include a good mix of items to cover everyone’s interests—think health and wellness, apparel, home goods, tech gadgets, and more.

While unlimited choice (think Amazon-type catalogs) can result in choice fatigue and lower satisfaction in the chosen item, a smart selection of 100-200 items provides a good variety for almost any size organization.  

If you’re an international organization, it may also help to consider global preferences and cultural differences. For example, in European countries (and denser cities everywhere), many employees live in apartments without space for large awards like grills or gardening tools. Smaller appliances, high-end cookware, jewelry, and bags for commuting are popular there.

Here are some categories to consider including when creating or refining a recognition catalog:

A selection of gifts including fashion and jewelry (watches, bracelets, outerwear), home goods (kitchen items), leisure/sports, and electronics
Another selection of gifts including travel accessories, experiences* (concerts, trips), and gift cards* (*consider local options and tax requirements for these gifts)

3. Choose items over cash

While it can be fun to hand out cash around the holidays or for a birthday, career anniversaries deserve something more. Cash is easily forgotten and often gets used to pay everyday expenses. (If you’ve ever received a cash award at work, try to remember what you spent it on.) By contrast, a meaningful, memorable award that properly expresses appreciation creates an impact that lasts far longer.

4. Incorporate symbolic awards

In addition to a gift of the employee’s choosing, consider giving a symbolic award to represent their years of service and connect it to the company and its culture.

Symbolic, or custom, awards are often more meaningful and memorable than anything available in a catalog. Like Olympic medals, Oscars, Grammy awards, or Super Bowl rings, symbolic awards remind employees of the great work they’ve done and how much they’re appreciated. And when the design is inspired by the company, its history, or the job itself, it can elicit even stronger feelings.

Learn how to create impactful symbolic awards your employees will display with pride.
Custom service award numerals for career milestones, designed by O.C. Tanner

Roto Rooter wanted to recognize the hard work and years of service their 2,900 employees gave to the company. Because service technicians aren’t especially interested in jewelry, they changed their entire gift catalog and commissioned customized numerals that generate an “overwhelmingly positive” response.

The financial side of service awards

Service awards budget

Service awards can represent a career’s worth of contributions. So they deserve to be celebrated. Unfortunately, many organizations fail to give awards or create experiences that are as meaningful and memorable as they could be.

Some spend very little on employees in their first five years. Others don’t start recognizing employee anniversaries until 10 years. And many put most of their money into 25-year awards.

According to the Bureau of Labor Statistics, most turnover happens within the first five years. So if you consider the costs of recruiting, onboarding, and training, a service award program that helps retain newer employees easily pays for itself. Additional research shows people stay at organizations with service award programs two years longer than organizations without these programs.  

And here’s another insight to help appropriately allocate money within a service awards budget: a gift with a larger monetary value can have much more impact on employees with less tenure, who often have a smaller salary, than those who are more established.

Taxes

Offering tangible items for service awards actually gives companies tax advantages in the United States. Tangible awards are tax-free for both the employer and the employee, so organizations can stretch their dollars and maximize their service award program. Gift cards and tickets to experiences are not tax-exempt and, if included, can make your service award program ineligible for potential tax advantages.  

Keep in mind: Often organizations will want to combine their service and performance awards or co-mingle recognition points. This can interfere with tax compliance and result in programs that cost companies extra money each year. (As always, check with your finance team and other tax experts.)

Examples of employee service award programs

Custom BHP career anniversary pins for major work milestones, designed by O.C. Tanner

BHP

BHP, a global resources company with over 37,000 employees, uses their Big Thanks recognition program to create a culture where each employee is motivated to bring their best every day. Honoring career milestones is an important part of their integrated recognition program.

To commemorate work anniversaries and retirement, BHP employees are given a custom Yearbook filled with personalized notes from coworkers and company leaders and beautifully crafted custom pins. Each pin ties into the BHP story and communicates the company’s history and values—from the trucks they use every day to the tools invented by BHP employees to tokens of teamwork and collaboration.

“For us, recognition has always been part of our DNA, and Big Thanks has enabled us to reach every single employee across the organization. It’s become a hallmark of moving forward to make us better and stronger.”
Jad Vodopija, Chief People Officer
Collage of a client’s custom work anniversary celebration package with Culture Cloud, including a yearbook with comments from teammates and an online message from the CEO.

CIBC

CIBC is a leading North American financial institution with 45,000 employees. CIBC had a quarterly awards program to formally recognize employees for great work and a career milestone program to recognize years-of-service. But the bank wanted to modernize how it recognized employees.

O.C. Tanner worked with CIBC to create the MomentMakers program. In addition to a recognition program for great work, CIBC also updated its career milestone program with a customized, personalized Yearbook that allows leaders and colleagues to add comments, photos, and memories to celebrate years-of-service.  

“We can take the most important element of our culture—our purpose—and have it be visible throughout the platform.”
Jackie Goldman, Senior Vice President, Rewards, Recognition and Performance.

In the year following the program’s launch, the bank saw not only higher engagement but also a shift in its recognition culture. Almost 9 in 10 employees (85%) feel their personal contributions are recognized—8 percentage points higher than the industry benchmark.

A selection of custom awards for Dow Chemical including test tubes, lab equipment, and machinery, designed by O.C. Tanner.

Dow Chemical

Dow Chemical has a company culture of openness, innovation, diversity, team spirit, and growth, and wanted their recognition program to reflect it. Using feedback from employee surveys to understand what connected people to their local cultures, they created one cohesive program customized to individual locations.

“When employees feel validated and feel a part of the bigger picture, and a part of the strategy, we all work harder. We do more. We put more effort into everything we do and we do better work. That impacts the shareholders. That impacts corporate initiatives. That impacts the bottom line. It’s very good business sense to make sure that we have an engaged workforce.”
Curtis Kesler, Recognition and Appreciation Program Manager

How a service awards partner can make all the difference

Without a qualified partner’s help, setting up a years-of-service award program may feel daunting. O.C. Tanner has the expertise to simplify the service award process from start to finish. This will not only save you time and money, it will help you build a service award program that employees love.

Years-of-service awards present you with a chance to create peak experiences for your employees and communicate how important each and every employee is to your organization’s success. Modernize your years-of-service award program and give your people meaningful, memorable recognition experiences that make them feel connected to purpose, accomplishment, and one another.

If you’d like to know more about years-of-service awards, or any of the other employee recognition programs offered by O.C. Tanner, get in touch. We’d love to hear from you.

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