by Leo Jakobson | July 17, 2014
One good, solid way to ensure that your company has a lot of employees who celebrate 10th, 20th, and even 30th anniversaries is to start by celebrating employees' first, second, and third anniversaries.

Anniversary recognition programs are among the most common type of employee loyalty program. But there is a growing body of evidence that also shows that starting these programs at the five-year mark, as these programs traditionally do, is no longer good enough.

In large part, this is due to the fact that the Millennial generation, composed of those whom the Pew Research Center defines as having been born between 1981 and 2000, are becoming a larger and more important part of the workforce. And simply put, they won't wait that long.

As a group, Millennials expect to stay in a job just three years, according to a 2012 study by executive development firm Future Workplace, "Multiple Generations @ Work." That's backed up by the U.S. Department of Labor, which says the average job tenure of Americans ages 25 to 34 (which roughly corresponds with the part of the Millennial generation that is currently in the workforce) was 3.2 years in 2012, compared with 5.3 years for those ages 35 to 44, and 7.8 years for those ages 45 to 54.

This is something that a growing number of companies are starting to recognize, says Cord Himelstein, vice president of marketing and communications at Michael C. Fina, a New York-based employee recognition firm. He points to a recent study by Accelir Research, the "Rewards & Recognition: 2014 Trends Report," which his firm sponsored. Accelir found that two-thirds of the more than 400 U.S. and global companies surveyed believed that employees should start getting recognized and rewarded at their one-year anniversaries, rather than at the traditional five-year mark.

Starting recognition programs early, "even at the one-year mark, is important for building a strong, long-lasting connection and personal relationship that will have a positive impact on the individual and help the company increase overall engagement," Himelstein says.

Building Early Recognition

One company taking this to heart is USG, a 110-year-old manufacturer and distributor of building materials based in Chicago.

Despite an economy that has been "miserable" for its sector in the past five years, USG recently unveiled a new and expanded service anniversary program, according to Shelly Green, USG's senior vice president of human resources operations, building systems and L&W supply, as well as senior director of human resources.

"While the program we had in before was fine, we found we needed something new that would engage our managers and our employees at a whole different level," Green says. "The economy has been very difficult for our business, but we felt very strongly about continuing to recognize and engage our employees for their service. That hasn't wavered. [Service anniversaries are] a fundamental part of our recognition program."

In part, that is because USG has historically had a very long-tenured and loyal workforce, for whom service anniversaries in the 30-, 35-, and 40-year range are "not unusual," Green says. "We're a very strong-cultured company, very relationship oriented, and we tend to find that when people come to work for USG, they tend to stay."

In order to maintain that, Green says, the company felt that its service anniversary program needed to change with the times.
Two key changes involved ramping up the importance of the one-year service anniversary and adding another at the three-year mark that is so critical to 
Millennials, Green says.

"We recognize at one, three, and five years, and then every five years after that," she says. "In the past, at one year, we just had a keychain or a solitary item -- people did not have a selection. Now they have a selection of the same number of items as every category. We have gotten a lot of very positive feedback from individuals who have worked at companies that did not do any sort of recognition at a year -- people were surprised at the level of award they could choose. It was a lot more than a keychain or a pen."

While this has made the one-year anniversary more important and appreciated, Green adds that the biggest change was in how employees responded at three years.

"I know a lot of companies start at five, or they start at one and jump to five, but we feel that the three-year mark is a critical point for us," Green says. "It is almost like the sticky point of someone's employment with us."

She adds: "We definitely saw a change in how employees responded at three years. People were surprised to be recognized at three years. Going from one year to five years is a long time not to be recognized. I know we do that at the upper levels, but three years is such a critical point at someone's employment with USG. We feel recognizing someone's employment at three years is very meaningful from a retention and engagement standpoint."

Beyond that, USG has taken great pains to make sure its brand is strongly tied into the service anniversary program. Green says: "We want people to know, when they're looking at a golf club or a fishing rod, that they earned that for their service to the company."

Make Magic Happen

To make this happen, USG turned to Michael C. Fina, which implemented its Magic Box program, a customized, logoed presentation box that contains a merchandise award catalog, a personal letter, and a commemorative plaque or a certificate of recognition that celebrates the employee's anniversary.

In the USG program, the red box, tied with a USG logoed ribbon, offers employees a choice of more than 70 different merchandise awards at each level. Even at the one-year anniversary level, there is a lot of choice, Green points out. Merchandise awards include such items as jewelry, china, electronics, home and kitchen items, and outdoor goods.

"There was some question about whether we needed to spend this much money on packaging," Green says, "but what we found when we talked to managers and employees was that aesthetics is a lot of what presentation is all about to employees. To get this box, with the USG logos on it, and all the information housed in one place, with this very special plaque or certificate that you get, was very meaningful to people. The managers didn't have to print something off separately or gather information from several different places — it was nice to have it all in one spot, and something that they can physically present to employees."

Of course, the ability to make a great presentation and the understanding of how to do so are two very different things, and USG recognizes that.

"The fact that they provided tools for our managers to help them recognize their employees was pretty important for us as well," Green says. "They have a section [in our program's website] devoted to how a manager can recognize an individual. There are templates for emails, templates for cards, there's a section where you can go in and see what happened the day the person was hired — a timeline of important events that happened. I think that for managers to have that stuff at their fingertips and not have to go search it out is very helpful."

Managers are automatically reminded about any upcoming service anniversaries among their direct reports and what steps need to be taken. "The feedback that we get," Green says, "is this: 'These simple reminders really help me to be a better manager.'"