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How Much Should You Spend on Employee Service Awards?

Engaging loyal employees starts with recognizing service milestones.

We recently conducted a service anniversary benchmarking study of 78 Fortune 1000 companies. We received feedback from 93 percent of those surveyed and have developed a “Service Anniversary Awards Customer Profile” from the data compiled.

This study validated a number of observations we have made within the length of service awards marketplace. Namely, most organizations value and recognize years of service with formal programs that offer a work anniversary gift or award to the celebrant. Often, that award is one that can be utilized outside of the workplace in a lifestyle environment. This could be luxury items on your employees’ wish list that they’d find hard to justify buying for themselves or experiential rewards that let your employees get out and experience something like gourmet dining or surf lessons.

It’s not uncommon for the employee anniversary gift to carry the corporate identity or the program logo, but that approach is becoming less pervasive within the gift selections available.

The study also provided insight into other themes present in current service award programs, such as: 

  • Most companies offer long service awards every five years starting with employee anniversary gifts at year five, but increasingly, certain industries are recognizing employees at one and three years.
  • The majority of programs feature leadership involvement, including dinner or lunch recognition and reward events, banquets or team events.
  • Inclusion of a certificate, plaque or symbolic gift is also prevalent.
  • For service award programs that offered gifts, the respondents with deep knowledge of the program metrics indicated an average of 85 percent response rate for the award redemption.

Just how much are your employees worth?

The average tenure for a North American worker is less than five years. Studies show that after six months at a new job, 40 percent of employees are already disengaged. With staggering statistics like these, it’s not hard to see that recognizing employee service milestones and implementing other employee engagement initiatives need to be an integral part of your organization’s strategy.

So just how much should you spend on length of service awards? And what are other companies spending on their work anniversary awards? The chart below compiles data from a wide range of years of service programs to give you a clearer picture:

How much are your employees worth?

When it comes to employee service awards, companies spend, on average, between $15 and $20 per year of service — or between $150 and $200 for 10 years of service. (This doesn't include extra costs like shipping, taxes, and company communication pieces that will add to the expense of the program.)

However, there are slight exceptions depending on length of service. At the one-year mark, service awards have a price tag of $10 to $15. And around the 25-year mark, program budgets tend to skew higher than this $15 to $20 standard — often reaching more than $26 per year of service at the 35-year mark.

Compare the price of service awards and employee engagement initiatives with other employee costs, and you’ll quickly see that they make up a small portion (0.05 percent) of an organization’s annual contribution per employee.

annual employee expenses

To put this chart in perspective, a five-year service award of $100 will cost $0.0096 per hour of work or less than 1 cent per hour for recognizing over 10,000 hours of great work.

Celebrate service and employees will stay

Service anniversary awards celebrate longevity and are proven to have a positive impact on employee engagement and retention. Recognizing service milestones at the one and three-year marks show your dedication to employees early on in their career. These earlier service anniversary milestones also create a culture that helps to embrace and extend authentic employee loyalty.

Is your company's service anniversary program best-in-class?

Compare your organization’s human resources budget to the averages to see where your program falls along the cost spectrum.

best-in-class service awards

BI WORLDWIDE Canada is a global provider of service award programs. Our DayMaker: Service Awards Program drives results for our clients by using our patented mobile-friendly comment sharing employee recognition program, creating custom employee service award catalogues from our selection of 34,000+ items and 330,000 experiences, and delivering a 100% satisfaction return policy with no questions asked.

For more information on BI WORLDWIDE Canada service award solutions, feel free to reach out to us at

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Celebrate. Recognize. Reward.