The new face of Long Service Awards - Latest research report

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The new face ofLong Service AwardsLatest research report

2 www.edenred.co.uk/ehub

ContentsIntroduction 3

The research: seven insights that can help your planning 4

Best practice: five areas where you can get more from your LSA programme 7

Summary of results 9

Case Study: Increasing Participation in DHL’s Service Award Scheme 10

How Edenred can refresh your Long Service Award scheme 12


IntroductionWith the death of the ‘job for life’ and average length of employment now in the low single figures, anyone could be forgiven for thinking that, like the carriage clock, Long Service Awards are a relic from another time.

Our research finds the opposite however: Long Service Awards (LSAs) are alive and well. Organisations are as committed to them as ever and see them as an important part of the recognition mix. What’s more, many are thinking hard about how they can make reward more personal, relevant to their employees and effective for their organisations.

In this report we share a snapshot of what organisations are doing around their Long Service Awards as well as five action areas to consider in order to improve their effectiveness.

Employees awarded for long service?

83%

17%

How many years service do you start rewarding?

1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%

Which of these statements do you agree with in relation to long service awards?

What is the longest service period you recognise?

3% (5 Years)8% (10Years)3% (12 Years)5% (5 Years)

8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)

8% (40 Years)3% (50+ Years)8% (other)

Which of the following do you use to recognise long service?

49%

37% 35%

21%

7%

Gift/ Physical ItemGift Vouchers/ CardsExtra HolidayCashOther

0

5

10

15

20

25

30

Which of these best describes your approach to long service awards?

Our employees know exactly when they qualify for LSAOur employees always get a personal thank-youAwards are always presented by a senior member of the business Employees get to choose their own awardsOur awards are celebrated throughout the businessWe prefare to give cash instead of gifts or vouchers

What is the most important reason for giving long service awards?

Loyalty

Recognition

Retaining Employees

Employees Expect us to Give Them

0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0

Receiving a long service award is well regarded by employees in the business

They are an important element in the mix of tactics we use to recognise our employees’ hard workEmployee loyalty is undervalued so it is important to recognise long service

Employees receiving our awards genuinely value them

They make a di�erence to the way our employees think about our business

I wish I could spend the money in di�erent ways

We are spending less money than we were 5 years ago on LSA’s

It is more bene�cial to thebusiness to target hard business outcomes like customer service than to reward long serviceThe increased churn inemployees means we haveshortened the qualifying timefor LSA’s

Yes

No


The research: seven insights that can help your planning1. Long Service Awards are still prized as a tool foremployee recognitionLong Service Awards are still commonplace in the vast majority of organisations with 83% of them saying they give some sort of reward.

Not only are they seen to be valued by employees in the business - some 67% of employers say this is the case - but 58% of organisations say they are an important element in the recognition mix when it comes to valuing loyalty.

Overall, employers recognise the need to reward loyalty in some way and no organisation we surveyed said they had a long service scheme only because they had to. Only 7% said they wished they could spend their money in a different way.

2. Recognition for long service now starts early onAlthough our research didn’t track any shifts in the length of service being rewarded, recognition for long service now starts early on for organisations.

For just over half of organisations (53%) this comes at five years and overall 84% of employers told us that reward starts at 10 years or before.

The organisations that we spoke to told us that reward for long service is being stretched at the top end by workers staying in organisations for longer and at the bottom end by ensuring that they are able to give recognition sooner in employee’s careers.

Interestingly, organisations see LSAs as a tool for appreciation and only a minority (9%) think they have a role in employee retention.

“83% of organisations say they give some sort of

reward.”


3. Updating LSA strategy is not a priorityLong service strategy is not something which many employers think about changing regularly.

Just over half of those we spoke to (54%) said that their approach to long service had not been updated in the last five years and a further 56% didn’t envisage change within five years’ time.

So while some employers identified changes in workplace demographics, they also expressed the need to reduce costs and the opportunity to improve efficiency in long service schemes. Many organisations are potentially missing out on the opportunity to update and enhance their approach to LSAs so that it better meets the needs of both the organisation and employee.

4. Poor communication is an issueOne of the most striking findings in our research was in the way organisations are failing to use communication as part of the recognition mix for long service.

While 65% of employers say their employees know when they are eligible for a long service award this is a figure you might expect to be higher and one which still means around a third of employees are in the dark about long service schemes.

In addition to this, employers also seem to be failing to communicate awards when they are made - some 68% say that Long Service Awards are not celebrated within the business.

5. In many organisations LSA is not personalisedIn addition to effective communication, personalisation is another area which organisations appear to be ignoring in their approach to Long Service Awards.

Just under half of those we surveyed (44%) said they let employees choose the reward. When it came to giving the reward itself nearly four in ten organisations (39%) said employees did not receive a personal thank you with barely half involving a senior manager in the recognition process (51%).

It is clear from these figures that many organisations are approaching LSAs in a mechanistic way, missing out on the opportunity for a personal thank you to employees.


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No


“49% of organisations

give a gift or physical item

while vouchers or gift cards

account for 37% of recognition.”

6. Physical reward still dominatesAnother surprise in our research was the reliance on physical gifts in the recognition of long service.

Despite the flexibility offered by vouchers and gift cards, 49% of organisations give a gift or physical item while vouchers or gift cards account for 37% of recognition.

While holiday is given by just over a third of organisations (35%), only 7% opt for more creative reward such as celebratory lunches or sabbaticals and no organisation we surveyed offered shares in the business. Surprisingly, long service is recognised with cash for 21% of organisations. This is despite the plethora of research showing its ineffectiveness as a form of reward and despite the additional expenditure resulting from benefits in kind and/or National Insurance Contributions.

Looking at these figures, employer attitudes to long service appear to lag behind the choice which employees value with the opportunity for many organisations to think about what their people would really value as a reward for loyalty.

7. Many schemes are missing out on tax exemptionAn important area for any long service scheme should be to ensure that it takes advantage of the relevant rules around tax exemption.

Despite this, over a quarter of employers we surveyed (28%) said that either their scheme was not compliant with Inland Revenue rules or that they did not know.

While not all Long Service Awards will be fully tax exempt, it is important to ensure both the employer and employee make the most of any rules which allow both parties to legitimately steer clear of additional tax.


Best practice: five areas where you can get more from your LSA programme1. Refresh your strategyIt is clear from our research that for many organisations, changes in the targeting, delivery and nature of the reward in their long service programmes would deliver better impact. This should involve employees so you can understand how you can reward loyalty in a way which delivers on the needs of the organisation while meeting the expectations of employees. A new strategy should build in future reviews at regular intervals.

2. Get the intervals rightEvery organisation needs to be sure that its LSA programme reflects the demographics in the workplace and the average tenure for employees.

While the trend now for LSA schemes is to reward loyalty from five or ten years’ service, this may not be right for your organisation. High pressure and high turnover of professionals like in the retail, call centre and hospitality industries will require a different approach with reward starting earlier on.

The most important thing is to ensure that employees don’t have to wait too long before they get a reward for loyalty.

3. Choosing the right rewardIf there is one mistake you don’t want to make with any reward scheme, it is by giving something which isn’t valued by employees.

Organisations which hand out cash or standard physical gifts are missing out on this opportunity. An effective approach to reward should start with giving employees choice and the opportunity to personalise what they get.


To really make a difference, employers should also consider an approach to reward which might involve managers and the wider team - for example with a lunch - or if appropriate give a form of reward which involves partners or family. Giving holidays, the opportunity for a sabbatical or shares in the business are other areas to consider.

4. Effective communicationWhile the nature of the reward itself is important to employees this is only one part of recognition mix. The other half consists of communication and recognition within your organisation for those you are rewarding.

Effective communication around Long Service Awards should ensure employees understand the service intervals, are aware when reward is given and hear about it from line managers and the senior team.

Organisations who fail to involve either managers or members of the senior team in the reward process risk making the recognition insincere and hollow. They also miss out on a valuable opportunity to regularly and publicly show the extent to which the organisation values loyalty and the contribution of individual employees.

Consider introducing framed Long Service Award certificates to truly personalise the presentation; this also serves as a permanent memento for employee’s desks or to be mounted with others in the office in a prominent position.

5. Scheme administrationA long service scheme is only as good as the systems which support it and this is an area where many organisations can improve.

Key areas to focus on are record keeping, advance notification to managers and members of the senior team of forthcoming qualifications, provision of personalised communication and updating the way a choice of rewards is delivered to employees as well as reviewing the scheme for tax compliance.

Organisations should also ensure there is a mechanism for follow-up to ensure rewards have been received and to listen to any feedback they have which can inform changes to the scheme to make it more effective.

“A long service scheme is only as good as the

systems which support it and this is an area where many

organisations can improve.”


Summary of results:Employees awarded for long service?

83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No

Is your long service award programme structured so that the awardsissued are exempt of Bene�t-In-Kind tax?

72% 33%

14%

14% NotSure

Which of these statements best applies to your organisation?

67%

We used to do long service awards but stopped

We have never given long service awards

Is your long service award programme structured so that the awardsissued are exempt of Bene�t-In-Kind tax?

72% 33%

14%

14% NotSure

Which of these statements best applies to your organisation?

67%

We used to do long service awards but stopped

We have never given long service awards



83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No

Case Study: Increasing Participation in DHL’s Service Award SchemeThe business challengeIn 2011 DHL decided that the UK service award programme it had in place in its Supply Chain division needed to do more to underline how the business values employee loyalty.

Although the scheme was designed to play an important part in reinforcing relationships between managers and employees, only 20% of those eligible for rewards among its 40,000 employees were either receiving or redeeming them.

Edenred was given the task of overhauling the scheme, with the primary objective of boosting take-up of the service programme. DHL also wanted to deliver more consistency in its reward offering to employees.

The responseEdenred identified that the key areas for improvement in the scheme needed to be around choice of reward, transparency in how reward s linked to length of service, ease of administration and making the reward more memorable for employees.

The new scheme devised for DHL was therefore based around:

• Clarity: A scale of rewards from £100 up to £1,000 based on years of service

• Choice: Employees could elect to have either single or multi-store vouchers or gift cards redeemable in over 70 leading high street retailers


• Accessibility: The existing catalogue scheme was replaced with Edenred’s online reward platform Compliments Select for the redemption of rewards

• Ease of delivery: New ‘Service Award Packs’ were created to make the presentation of the reward easier for the manger and more visible among teams

The new programme was also given a new brand - The Inspire Programme - to support its roll out across the business and to underline the change to an improved reward programme.

The resultsAfter two years of operation 2,500 service award packs have been delivered through the Inspire Programme with employees choosing vouchers through the online Compliments Select platform. Overall employee participation has risen four-fold from under 20% to 80%.

Giving feedback on the new scheme, DHL Supply Chain’s Head of Compensation & Benefits Projects said:

“The new scheme implemented with Edenred has meant employee loyalty is being rewarded more consistently and with greater frequency across the business.

The Inspire Programme has also helped engage managers with the importance of recognising long service while making the act of reward more memorable and visible within DHL.

Overall, we feel that our service award scheme is now doing a much better job of delivering on its objective of ensuring employee loyalty is recognised and valued.”


83%

17%

How many years service do you start

rewarding?

1 Year2%

0 5 10 15 20 25

2 Year

5 Year

6 Year

10 Year

15 Year

20 Year

21 Year

25 Year

30 Year

5%

53%

3%

20%

2%

2%

2%

8%

2%

Which of these statements do you agree

with in relation to long service awards?

What is the longest service period you

recognise?

3% (5 Years)

8% (10Years)

3% (12 Years)

5% (5 Years)

8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)

8% (40 Years)

3% (50+ Years)

8% (other)

Which of the following do you use to

recognise long service?

49%

37%

35%

21% 7%

Gift/ Physical Item

Gift Vouchers/ Cards

Extra Holiday

Cash

Other

0 5 10 15 20 25 30

Which of these best describes your

approach to long service awards?

Our employees know exactly when they qualify for LSA

Our employees always get a personal thank-you

Awards are always presented by a senior member of the business

Employees get to choose their own awards

Our awards are celebrated throughout the business

We prefare to give cash instead of gifts or vouchers

What is the most important reason for

giving long service awards?

Loyalty

Recognition

Retaining Employees


0 5 10 15 20 25 30

29

25

25

22

11

3

1

1

0

Receiving a long service award is

well regarded by employees in

the business

They are an important element in

the mix of tactics we use to

recognise our employees’ hard

work

Employee loyalty is undervalued

so it is important to recognise

long service

Employees receiving our awards

genuinely value them

They make a di�erence to the

way our employees think about

our business

I wish I could spend the money in

di�erent ways

We are spending less money

than we were 5 years ago on

LSA’s

It is more bene�cial to the

business to target hard business

outcomes like customer service

than to reward long service

The increased churn in

employees means we have

shortened the qualifying time

for LSA’s

Yes

No


How Edenred can refresh your Long Service Award schemeWe offer the widest range of multi-channel reward & gift products with the widest choice of redemption options. We provide products such as our Compliments Family that boast unrivalled reward choice. We let your people choose the reward that’s right for them, and let your company reap the benefit with maximum ROI:

• Compliments Voucher™, a multi-store paper gift voucher with the widest retail redemption network

• Compliments Card™, a pre-paid card that can be used in over 110 high street retailers

• Compliments Passport™, a holiday and travel voucher

• Compliments Experiences™, offering recipients unforgettable experiences and activity days

• Compliments Select™, the online reward platform that lets you issue a reward of any value, at any time to any recipient, in any location

With our experienced account managers and professional communication team, you can ensure your rewards are delivered efficiently and effectively.

Find out more about how you can breathe new life into your Long Service Award scheme by calling 0843 453 0209 or visiting www.edenred.co.uk/long-service-awards

Chubb Insurance Company Case StudyChubb decided to use Compliments Select online reward platform, to extend its rewards offering for their ‘Living the Brand Rewards’ programme. Follow this link to read the case study. http://www.edenred.co.uk/chubb-case-study/


83%

17%


1 Ye

ar

2%

0

5

10

15

20

25

2 Ye

ar

5 Ye

ar

6 Ye

ar

10 Y

ear

15 Y

ear

20 Y

ear

21 Y

ear

25 Y

ear

30 Y

ear

5%

53%

3%

20%

2% 2% 2%8%

2%




8% (15 Years)

16% (20 Years)

8% (25 Years)

5% (30 Years)

24% (35 Years)



49%

37% 35%

21%

7%


0

5

10

15

20

25

30




Loyalty

Recognition

Retaining Employees


0

5

10

15

20

25

30

29 25 25 22 11 3 1 1 0








Yes

No

http://www.edenred.co.uk/chubb-case-study/


Follow us:

https://twitter.com/Edenreduk

http://uk.linkedin.com/company/edenred-uk-group-

Research references:

Pensions Regulatorwww.thepensionsregulator.gov.uk/

Employee Benefits Magazine Annual Research 2013:www.employeebenefits.co.uk

PwC’s NextGen: A global generational studywww.pwc.com

CIPD Workplace Financial Education reportwww.cipd.co.uk

Engage for Successwww.engageforsuccess.org

Edenred social media researchwww.edenred.co.uk

Ofcom annual trends reportwww.ofcom.org.uk

Metlife benefits scorecardwww.metlife.com

About this report

The research in this report was based on the results of a survey of 52 organisations conducted online in May 2013.

Date post:	21-Oct-2014
Category:	Business
View:	691 times
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The new face of Long Service Awards - Latest research report

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