Years of Service Awards: Tips for Recognizing Employee Tenure 

Gusto Editors

Employee years of service awards are a powerful way to recognize employees for loyalty and contributions to your company.

Awards like these can help boost employee morale and make workers feel appreciated for their commitment to your organization. At the same time, they provide coworkers with inspiration and incentives to continue to want to work for the company, and so, may lower employee turnover rate at your organization.

Be sure to include employee years of service awards as a key component of your employee recognition strategy. By incorporating a service awards program into your employee appreciation work, you can foster enthusiasm and employee engagement.

In this post, we’ll:  

  • Define employee years of service awards 
  • Articulate why they are important 
  • Cover the most common milestone years 
  • Provide 10 service award ideas

What is an employee years of service award?

A years of service award celebrates the length of time an employee has been with the organization. A milestone celebration like this is a wonderful way to show appreciation for your most loyal team members and really honor those who have remained committed to your company for a significant time. These awards often recognize the unique skills and investments your employees have brought to the organization. Because these employees have typically seen significant growth and evolution—and contributed to the company’s success—this award program is a wonderful way to honor their impact and service.

The most effective service awards programs share many of the following traits.

Reflect company values

Service awards are a great way to recognize employees who demonstrate company values, mission, and vision. Remarks and write-ups about long-serving employees can note how the employees have embodied and exemplified those values.

Remain employee-centric

You want your recognition program to focus on the employees first and foremost. Many awards, especially for longer service records, carry with them financial rewards or major prizes. Employees should be involved in choosing the ways they are recognized, especially at higher levels.

Be easy to administer

Taking some time to strategically develop a service awards program can help you create structure and framework. Those organizational guideposts can make the program easy to implement. Some components can even be automated using platforms and technologies that execute aspects of the program.

Why are employee years of service award important? 

Employee recognition programs have many benefits to an organization. The major benefits include the following:

Boosting employee retention

Employees want to work for organizations that value stability and longevity. Service awards programs can inspire employees to stay with a company, especially if incentives for service are compelling.

Increased employee engagement

Employee engagement is an indicator of how connected workers are to the organization and to each other. When employees feel they are valued for remaining with an employer, their engagement likely increases.

Positive employee engagement has many benefits and can improve team camaraderie and morale.

Improved loyalty

Employees who see the opportunity for recognition and rewards may be less likely to look for another position. That’s why programs that celebrate service can improve loyalty to the employer. They can create a sense of belonging that employees can feel.

And, when employees feel appreciated, they are more likely to remain loyal to the organization. That loyalty can be expressed to family and friends and within the community. In turn, those expressions of loyalty can improve brand reputation and value.

Improved recruitment

When there are positive employees and programs that respect longevity, candidates take notice. People want to work for organizations that respect and appreciate the work employees do.

Stronger corporate culture

When you ask employees how they are valued, employee appreciation programs are in play. When the company invests in programs that visibly recognize and appreciate workers, a positive culture persists. These programs can create a positive workplace where employees want to come to work and enjoy the work they do.

Developing a robust employee years of service awards program

When you’re developing or reevaluating your service awards program, keep the following tips in mind.

  • Set clearly defined goals and objectives for your program. Understand what you want to achieve and why. 
  • Get senior leadership buy-in. Service awards are a strategic investment in personnel and should be perceived as such. It’s much more than a prize program. 
  • Know what employees think. Use surveys and one-on-one conversations to glean what employees expect and want from a recognition program. Ask if receiving these awards is meaningful and valued; if not, rethink the program. 
  • Determine if your program reinforces your core values and principles by asking employees who’ve received awards and are eligible. 
  • Create programs that are specific and personal. Programs that seem rote or generic will be poorly received and may backfire. Programs need to be highly valued organizationally and important to leaders and staff alike. 
  • Scale is important. What’s given for a 5-year anniversary needs to be different than for a 25-year anniversary. Awards should be appropriate to the experience being recognized. 
  • Recognition for milestones should be different than for other types of honors. Rewards for completing an important project, for example, need to be different than for spending a decade with the company. 

Most commonly celebrated milestones 

There’s a reason colleges and universities hold reunions at 5-year intervals. It’s the same principle that should apply to your milestone recognition program. Celebrating years of service that end in a 5 or 0 are the most common increments companies use.

A 5-year recognition program is a way to acknowledge an initial commitment of service. Ten years of service is a major cause for recognition.

At 25 years, an employee has shown an extraordinary commitment to the organization. It is a cause for a major celebration and significant recognition.

While service beyond 25 years is increasingly infrequent, service at 5-year intervals should also be celebrated.

On the earlier end, some organizations recognize employees after their first year of service.

Be careful about recognizing every employee every year for their service. Such frequent recognition can dilute the impact and purpose of a service awards program.

Employee years of service award ideas

There are many ways to recognize employees for their years of service. Not each recognition type is appropriate for each of the three major milestone years.

Below are 10 categories of service year recognition to consider. In each suggestion, we also identify which years the recognition is most appropriate for and give examples of possible awards.

1. Time off

Employees always value time off. Giving employees an award of extra vacation days at milestones can show appreciation. Important note: be sure that the time off is paid time off.

Extra time off can also be calculated financially. Every day off that’s paid is, in one way, extra income. You’re being paid to not be at work.

Structuring time off for different milestones can be customized and scaled for the main recognition years.

For example, at 5 years, an award might be 2-5 days of extra vacation time. In some cases, this is a threshold at which these extra vacation days become permanent.

For example, PTO or vacation time may be two weeks at the start of one’s tenure. At 5 years, that may jump to 15 days every year.

At 10 years, there could be another bump in vacation time, either as a one-off or permanently.

At 25 years, one possibility is to provide for a paid sabbatical. This practice is common in academia, where faculty members are given a semester or year off to research, write, and publish.

Offering a sabbatical would be a meaningful reward for a meaningful length of service. Whether it’s a month or six, this time away, again paid, can help employees recharge and reflect. It’s a generous award for extended service.

2. Redeemable points

There are many programs available that use points to reward employees. These programs typically are used for peer-to-peer recognition and employee rewards.

Points can be allocated to each employee automatically to recognize their peers. They can also be allocated centrally by the administrators.

Employees who accumulate enough points can redeem them for prizes. Those rewards can include gift cards, corporate swag, experiences, or cataloged items.

Some programs allow you to customize a catalog of items from online retailers (like Amazon).

By giving employees options and choices, there’s a wonderful opportunity to give them what they most want.

These awards can be provided to employees at any milestone. They can also be used annually to reward employees for every year of service.

3. Letters from leadership

A handwritten note from a company leader can be a powerful way to express gratitude. By taking the time to write a personalized, heartfelt message, leaders demonstrate how much they value service to the organization.

These notes need to be customized and personal. Most people can see through a form letter pretty easily. It also should be handwritten, not an email or even on stationery.

These letters are more easily managed and written in smaller organizations. In such situations, it’s more likely the CEO knows the employee and the impact they have made on the business. In larger organizations, this recognition method may not work well.

Handwritten letters of gratitude and appreciation can be written to employees at every major milestone but are more appropriate at the 10th and 25th anniversaries.

4. Travel experiences

A getaway can be a wonderful way to show employees appreciation for their service to the company.

At the 5-year mark, a weekend getaway is an appropriate recognition involving travel. Alternatively, a dinner voucher at a popular local restaurant can be a great experience to give to employees.

At the 10-year mark, consider a week-long vacation covering some of the expenses, such as lodging and some meals. This welcome getaway can be enhanced by also covering the time off as paid extra vacation time.

At the 25-year mark, a more luxurious getaway for family or friends is an ideal way to celebrate this momentous milestone. Employees could choose from an international or domestic vacation. Covering travel costs, lodging, and meals can send a powerful message about how service longevity is valued.

5. Subscription boxes

Everyone appreciates a cool subscription box. These boxes are typically sent monthly to subscribers and are themed. Subscriptions can be for wines, coffees, foods, books, or other items.

A paid subscription for a year is a great option to recognize 10 years of service and higher. Provide your employees with options for different types of boxes so they can choose one that works best for them. This should not be a surprise recognition award, but an opportunity for employees to select their own reward.

6. Season tickets

At the 10- and 25-year marks, season tickets can be a valuable and deeply appreciated recognition option for employees. Season tickets can be to a local sports team, ballet, orchestra, choral group, theater company, museum, or music venue.

Like with other high-value rewards, it is important to give employees choices. Not everyone will enjoy season tickets to an opera company or minor league baseball.

The reward should be for at least two tickets so the employee can bring a partner, friend, or child.

7. Charitable support

Each employee will have causes they care about. Whether it’s health care, education, community services, youth services, or religion, there are charities that matter to employees.

At every year of service anniversary, there can be a standing recognition that gives a gift to a favorite charity. These gifts can be given in the name of or in honor of the recognized employee.

This gift in effect doubles the recognition. Initially, recognition from the employer is one way to celebrate a service milestone. However, the organization receiving the donation will also likely recognize the employee with a letter or other acknowledgment.

If the organization has a corporate value that stresses service and philanthropy, this recognition can take on a deeper meaning. You can also offer a larger contribution for each anniversary tier. For example, contribute $500 at five years, $1,000 at 10 years, and $2,500 at 25 years.

8. Financial rewards

There are many ways to provide financial incentives for service milestone years. Such rewards can give employees additional income that can be used as they please. These financial rewards should probably be accompanied by other recognition, such as a personal note or public recognition.

Bonuses: One-time financial bonuses can give an added boost of dollars and are appropriate at the 10-year mark.

Raises: A raise given at the 10- or 25-year mark provides a permanent boost to take-home income. While raises should typically be based solely on merit and performance, exceptions can be made. By offering raises at the major milestones, you can incentivize longevity and demonstrate the importance of staying with the company.

Stock options: For companies that have stock offerings, providing a gift of stock can be a highly valuable financial reward. Stock can be given at any time but especially at the 10- and 25-year junctures.

One note about financial rewards. There will be tax consequences for any additional income provided to your employees. While it may seem like a downer, it’s important to give employees information about the tax implications.

9. Luxury gifts

A special milestone deserves a special gift. The old cliché was to give people who retire a new wristwatch.

At the 25-year mark, it can be very appropriate to provide employees with a gift that is of high value and meaningful. Lavish gifts may not be feasible for companies that run lean. But for those with resources to invest in staff, it’s an effective recognition option.

Ideas for gifts include expensive wines, liquors, or chocolates; new appliances; or smartphones, laptops or smartwatches. Keyboards, guitars, and musical instruments are a great idea for musicians, while new golf clubs or tennis year are good choices for athletes.

10. A party or employee recognition day

One powerful way to recognize employees at the 5-, 10- and 25-year mark is to throw a party. Celebrating years of service with a company-wide celebration and allowing employees to invite family is a wonderful recognition option. The event need not be formal and can be held at a popular location with music and food included.

Some companies hold formal Employee Recognition Days. They are a way to recognize anniversary milestones and employees with exceptional performance. Often these days involve lunch or dinner and remarks from company leaders.

Recognized employees may also be asked to say a few words and reflect on their time at the organization. They’re a way to visibly express gratitude for service to the business in the presence of coworkers and loved ones.

Employee recognition can take on many forms. For employees celebrating a significant milestone, there’s an added importance to recognizing the occasion.

Employees who’ve given years of commitment and service to the company deserve an extra amount of recognition and appreciation. The longer an employee’s service to the company, it’s appropriate to provide more major recognition items.

Recognition shows employees, and their colleagues, how valued they are. It’s an opportunity to express sincere gratitude for dedicated service.

At Gusto, we help companies with talent development, HR, and benefits options. Our services, solutions, and consulting services help companies develop the right recognition programs. To learn more, contact Gusto today.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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