Is Your Industry Delivering on Employee Recognition?

Nearly every workplace, regardless of industry, can see the value in giving recognition for a job well done: Positive reinforcement to encourage more great work. Championing best practices and showing employees what excellence looks like by celebrating it. Reinforcing culture and fueling employee engagement.

In some organizations, this looks like peer-nominated awards at a regular pace; in others, it means a birthday cake in the breakroom or lunch out on the company's dime for major life events. Whatever recognition looks like in your organization or industry, we know that when it's done well -- when it's authentic, equitable and personalized to the receiver -- it can help combat employee burnout and turnover while fostering retention, which ultimately boosts business outcomes.

And leaders know this: The majority of leaders (67%) and managers (61%) are giving recognition to team members at least a few times a week. But even that effort isn't enough, as 40% of employees report receiving recognition just a few times a year or less.

Recognition done well can make a big difference for your employees. When recognition hits the mark, employees are five times as likely to be connected to company culture and four times as likely to be engaged. And engaged employees are more productive, involved in and enthusiastic about their workplace.

So, how can leaders hit the mark? Thanks to a recent study from Gallup and Workhuman, we now know that recognition done well means different things for different generations, industries and individuals. A one-size-fits-all approach to recognition is not effective; rather, it should be tailored to people based on who they are and what they do.

Meaningful Recognition Looks Different by Industry

Disruption from the pandemic spared no industry, with each one facing distinct hurdles. What each industry has in common is an incredible opportunity to improve the efficacy of recognition, with the ultimate goal of using recognition to address unique employee needs.

Healthcare and Social Services

The pandemic's effects may have hit this industry hardest, with healthcare workers reporting high turnover and extreme levels of burnout as early as 2020, and those troubling trends haven't shown signs of slowing.

Industry Insights: The Gallup and Workhuman study found only 18% of healthcare workers say that teams and groups of people are recognized at their organization. This is below the average for U.S. employees (22%), but more importantly, it is significantly lower than other industries that also often work in teams, including financial services (34%) and professional/technical/scientific services (28%).

Industry Opportunity: Healthcare employees who work at an organization that recognizes teams and groups are 3.9 times as likely to feel connected to the culture of their organization.

Beyond connection to organizational culture, the impact of recognition in healthcare reaches even further into business outcomes such as patient safety. A recent Gallup meta-analysis found that receiving recognition or praise for good work in the past seven days is related to a significant decrease in patient safety incidents. This shows that, all around, recognition moments in healthcare are connected to a better and safer experience for both employees and patients.

Finance and Insurance

The finance and insurance industry is shifting toward digital optimization and navigating what that means for organizations, employees and customers. Amid this changing landscape, we know that touchpoints between employers and employees, as well as between employees and customers, directly and indirectly influence customer behavior, underscoring the importance of retaining talent in this industry.

Industry Insights: Employees who work in the finance and insurance industry are more likely to say their organization has a recognition program (56%), compared with employees from other industries, with the government (45%) and healthcare services (44%) being the next highest. Additionally, employees working in finance and insurance have the highest rate of receiving monetized rewards with their recognition (i.e., money, points or another type of gift). However, this high incidence of recognition programs and monetized recognition in the industry isn't translating to a higher frequency of giving recognition, which indicates that not all recognition programs are equally effective.

Industry Opportunity: The data, both qualitative and quantitative, indicate that recognition matters. Not just to individuals and how they perceive their lives and work experiences, but to organizational outcomes. For this industry to take advantage of existing recognition structures, team leaders should make an effort to give recognition more frequently. Right now 40% of employees say they get recognition a few times a week compared with the average of 52% across all industries.

That said, recognition always matters, but recognition programs are not always effective, especially if they aren't targeted to the recipients. Selecting the right program for each organization is key to the efficacy of recognition.

Manufacturing

The manufacturing industry differs from many others because most employees can't perform their jobs remotely. This need to be on-site means the industry continues to face major and ongoing disruptions from front-line staffing challenges due to COVID-19, supply chain issues and technological changes.

Industry Insights: Manufacturing lags behind other industries in many aspects of recognition. Only one in 10 manufacturing employees say recognition is an important part of their organization's culture, trailing education and healthcare (each industry at 17%, respectively). What's more, only 11% of manufacturing employees say their organization has a system in place to recognize people for personal events or accomplishments unrelated to work.

Industry Opportunity: Recognition is being seriously overlooked in this industry, which means many employees are missing chances to be recognized for who they are and what they do. Similarly, these employees lack the benefits of employee recognition that can help bolster a sense of community, connection and collective work toward a common goal.

Regardless of employee type, occupation or industry, recognition done right positively affects everyone.

Technology

Disruption in this industry looked different from others during the pandemic, with tech experiencing an explosion of growth and heightened demand for workers, leading to headlines like, "Tech Hiring Is Still Bonkers." Amid fears of a possible recession, hiring in tech doesn't appear to be slowing as organizations continue to evolve and expand their technology services, tools, applications and platforms. In this field where workers can often do their work remotely, each organization's employee value proposition becomes even more important to attracting and retaining talent.

Industry Insights: Computer and software engineers, computer programmers, UX designers and developers - employees in tech roles know they're in high demand. Just one in four tech workers feels a sense of loyalty to the organization they work for, a rate that is significantly lower than employees who work in other roles. This lack of loyalty puts tech workers at risk of turnover and indicates weaker connections to their coworkers and the organization.

Industry Opportunity: Recognition can be used strategically to strengthen the bonds tech workers feel with their coworkers and the larger organization. When recognition is an important part of an organization's culture, employees are nearly three times more likely to strongly agree that they feel loyal to their organization.

Retail

The retail industry is unique in that we all interact with it on some level out of necessity. But the jobs themselves, and especially front-line staff, seem to be treated as disposable or easily replaceable.

Industry Insights: Employees who work in retail are some of the least fulfilled across all industries, with 43% defined as "thriving," compared with 58% for government workers and 66% for employees in the professional, technical and scientific services industry.

Industry Opportunity: There is extensive research to show how recognition can improve employees' wellbeing. Retail employees who work for an organization that has a system for recognizing life events (birthdays, weddings, personal milestones, running a race) are twice as likely to be thriving as retail employees who do not. But the effects of recognition on wellbeing aren't limited to retail employees only: Gallup and Workhuman research shows that positive recognition experiences are associated with greater wellbeing for employees across industries and countries.

The constant, unending pace of turnover in this industry might make recognition seem like a futile gesture, but data indicate the opposite is true. Recognition directly affects how these workers feel about their lives, emphasizing how important it is to acknowledge and recognize employees simply for who they are.

Conclusion

Regardless of the exact approach used to recognize employees, it needs to be holistic -- employees should be encouraged to give recognition freely in ways that are authentic, equitable and personalized to the recipient.

Further, the results presented in this article show that excelling in one area of recognition isn't sufficient to yield desired impact and recognition return on investment. Organizations need to focus on multiple pillars of recognition (fulfilling, authentic, equitable, embedded in culture and personalized) -- and incorporate them fully -- to see the maximal impact.