Everything You Need to Know About Service Awards

Your employees want to celebrate their career milestones. Here’s how you can craft an awards program they’ll love.

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

In today’s fast-paced economy, celebrating employees for the length of time they've been with your organization is more important than ever. One way to recognize employees for their years-of-service is through an awards program. But these programs aren't limited to celebrating years-of-service. They're a chance to reflect on accomplishments, honor friendships, and communicate an organization’s values.

The average length of time workers stay with their employers in the United States is 4 years. It’s lower in China and higher in Europe. But no matter where workers live, many of them want to build careers that last.

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.

If you’d like to know more, we’d love to chat.

What are years-of-service awards?

Years-of-service awards celebrate employees at every stage of their careers.

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.

Years-of-service awards are sometimes called 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.

Benefits of years-of-service award programs

How years-of-service award programs improve organizational culture—not just individual outcomes.

Beyond celebrating the tenure of a specific employee, years-of-service award programs can have major benefits for your entire organization. Here are some of the most important things these programs can do:

Reduce turnover

Years-of-service award programs improve employee retention. Employees stay at organizations for 2–4 more years when their company has a strong years-of-service program.

Improve employee experience

Employees at organizations with years-of-service awards report higher rates of feeling like their employer cares about them than employees at organizations that don’t give these awards. And it's true for all employees, not just those receiving the awards. There’s a 35% increase in employees enjoying a feeling of belonging at work when their organizations offer years-of-service awards.

Build diversity, equity, and inclusion

Because everyone in an organization receives years-of-service awards based on the same criteria, these programs are a good way to build an equitable and inclusive company culture.

Provide tax benefits

Depending on the country, employees may have to pay taxes on awards they receive. But in the United States, certain years-of-service awards are exempt from personal income tax—up to $1,600 in value, in some cases. (As always, check with tax professionals.)

Build trust

Years-of-service award programs build employees’ trust in leaders, strengthen loyalty, and shape culture through stories that illustrate what your organization stands for and cares about.

Service award ideas for each career stage

Years-of-service awards can celebrate each stage in the employee lifecycle.

Over time, a person’s career goes through different stages. How employees feel about themselves, their work, and their organization changes over time. Years-of-service awards should reflect those different stages.

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 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. 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.

Year 3: Fitting in

By now, employees are becoming part of your organization’s culture and feeling more comfortable with 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. 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. Consider giving a basket of specialty items or a unique local experience to celebrate all they've contributed to the company.

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

Understanding career growth—why Gen Z values service awards

They’re not just for veterans. Younger employees can benefit from years-of-service awards, too.

It may be a stereotype that only older workers value years-of-service awards, but 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.

How to build a years-of-service award program

Here are some things you can do to celebrate years-of-service.

Some organizations give plaques and pins to celebrate the length of time a person has been employed with them. Others provide extra vacation days or company stock. To turn service anniversaries into lasting memories, use a combination of symbolic and personal awards. Fun fact: Employees who receive recognition with a symbolic award are 3 times more likely to remember the occasion.

Years-of-service awards for employees should be something employees desire, not necessarily things they need. And you can recognize employees with simple gestures, too. Employees often enjoy choosing their own reward from a variety of options.

Here are some years-of-service awards employees love:

• Personal note of congratulations from the CEO or other senior leader
• Personalized card or book with messages from peers and leaders
• Nice celebration or dinner out
• Choice of a personal award item, like jewelry, electronics, home accessories, leisure/sports items, travel accessories, or other luxury goods
• Symbolic awards that connect back to something memorable about the company

How to modernize your years-of-service awards program

Here are some tips to help you keep your award programs up to date.

Just as the kinds of jobs people are now doing have changed, so too have service awards. Years-of-service awards are now part of a comprehensive employee recognition strategy that praises everyday effort, rewards results, and celebrates important career milestones.

Here are six ways to modernize your years-of-service awards program. (For even more ideas, check out this post on celebrating work anniversaries.)

1. Empower managers

Ensure leaders have the resources required to provide 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.

2. Celebrate different accomplishments differently

Plan a celebration appropriate for the number of years being honored. Plug into the enthusiasm of a 1- or 3-year employee, the hunger for growth of a 5-year employee, or the desire of a 25-year employee to mentor.

3. Involve others

Invite peers, vendors, 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.

4. Connect people

Don’t think of service anniversaries as simply marking time served. Celebrate things like personal growth, accomplishments, and relationships—all the reasons people choose to stay.

5. 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.

6. 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.

See how other organizations are successfully embracing recognition.

See how other organizations are successfully embracing recognition.

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,” explains 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.

Heritage Bank

With locations throughout Oregon and Washington, Heritage Bank is more than a community bank. But the company does use recognition to build a sense of community and a culture of continuous improvement.

Previously, the bank recognized great work during its annual Employee Appreciation Days. Once a year, it manually gathered and vetted hundreds of employee award nominations. Employees loved the awards, but recognition leaders wanted to offer recognition more easily and more often.

“By changing from once-a-year recognition to recognition throughout the year, we won’t miss the great work that is happening daily,” explains Barb Hedrick, Human Resource Officer.

Supported by O.C. Tanner, Heritage Bank’s Celebrate Great platform provides instant recognition. For milestone anniversaries and retirements, leader and peer comments are gathered in a printed keepsake yearbook for the employees, who also receive gifts.

The program has been a success: Ninety-six percent of employees say their years-of-service award presentation felt personal and sincere.

Yorkshire Building Society

With over 3 million customers, the Yorkshire Building Society (YBS) has been providing mortgages and savings for over 150 years.

The company found its recognition program wasn’t stretching across all of its functions. The program only focused on recognizing customer-facing colleagues; it didn’t include internal teams like HR, finance, and other supporting roles.

This problem caused the recognition lead at YBS to look for solutions that would make everyone feel appreciated. By teaming up with O.C. Tanner, YBS changed its program from celebrating only an employee’s 25th anniversary to celebrating employees with personalized yearbooks, starting on their third career anniversary and celebrating them with yearbooks again on their fifth, 10th, 25th, 30th, 35th, and 40th anniversaries.

“The Yearbooks that O.C. Tanner provided were just absolutely the right thing for us,” says Heritage Bank’s Recognition Lead.

How a recognition partner can make all the difference

Partner with experts to help build your years-of-service awards program.

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 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.