Learning & Development, Recruiting

Can Employee Recognition Increase Retention Rates and Productivity Levels?

October 10th is International Mental Health Day. As social media draws attention to quiet quitting, burnout, and the importance of mental health, workplaces need to prioritize their employees’ wellbeing.

When employees are recognized at work, they are up to 10 times as likely to strongly agree that they belong at their organization, according to a recent study conducted by Gallup and Workhuman. Similarly, employees who lack a strong sense of belonging are up to 12 times as likely to be disengaged and five times as likely to be looking for another job. The research shows that across many countries high-quality recognition is strongly associated with lower rates of burnout.

Wellbeing in the Workplace

“For a long time, employee wellbeing was oftentimes considered a ‘bonus’ or ‘nice to have’ for organizations looking toward significant growth and financial success,” says Scott Dussault, Chief Financial Officer at Workhuman. “Times have changed—with quiet quitting and disengagement running rampant, leaders should be turning to employee recognition to increase engagement, productivity, inclusivity, and overall loyalty to their companies. Considering that the cost of voluntary turnover due to burnout alone is 15% to 20% of the payroll budget each year, protecting and promoting employee wellbeing amounts to hundreds of millions of dollars toward organizations’ bottom lines annually. Neglecting wellbeing is one of the biggest mistakes organizations make—and a costly one at that.”

Poor wellbeing influences outcomes with serious price tags, including hindering employee productivity and engagement and precipitating burnout and turnover. The analysis found that organizations can experience an opportunity loss of $20 million for every 10,000 workers due to low wellbeing and its drain on performance. Yet few leaders realize the power they wield to amplify wellbeing at work and beyond.

Recognizing Hard Work

In a prior study, Gallup and Workhuman found that recognition acts as a buffer against job stress and enhances multiple aspects of wellbeing. The new report expands on these findings, providing actionable strategies for managers and leaders to enact at their places of work to tackle the “wellbeing pandemic.” For workplaces globally, one of the most effective and affordable wellbeing strategies is woefully untapped: employee recognition. Recognition does more than fuel employee wellbeing: It promotes a more positive outlook and mitigates burnout. In every country studied, there is considerable room to improve strategic recognition practices. Some of the key findings of the study are:

  • Employees who strongly agree that recognition is an important part of their culture are up to 91% more likely to be thriving in their lives.
  • Employees who have high-quality recognition experiences are up to seven times as likely to strongly agree that they have meaningful connections or a best friend at work, and as much as 10 times as likely to strongly agree that they belong.
  • Employees who say they experienced a lot of gratitude the previous day are up to four times as likely to strongly agree that their organization cares about their wellbeing.

“Gallup’s previous research has gone a long way to show, convincingly, that wellbeing matters at work—it impacts engagement and performance in ways that cost organizations dearly,” said Gallup Senior Researcher, Ellyn Maese. “It is evident that recognizing employees boosts their wellbeing in many facets of their lives, and corporations need to make it a priority. When incorporated strategically, recognition provides a foundation for employees to flourish.”


The report identifies that building a culture of recognition is a key strategy. A culture of recognition enriches employee wellbeing holistically—from employees’ social connections to their career aspirations. One of the hallmarks of a culture of recognition is when employees freely give and receive recognition. When recognition resounds at all levels of the company, it amplifies the benefit to everyone’s wellbeing. In fact, employees who strongly agree that they get the right amount of recognition for the work they do are up to 84% more likely to be thriving. And when employees give recognition at work at least a few times a month, they are as much as two times as likely to be thriving.

To learn more about the positive benefits of employee recognition, read the full report, Amplifying Wellbeing at Work and Beyond Through the Power of Recognition.

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