How long service awards can keep your best people with you for longer

Long service awards

We’ve all heard about how Gen Z and Millennials are the ‘job-hopping generations’. How, in place of the unquestioning loyalty of times past, they have high expectations of their work and their employers. They are also seeking richer, more diverse work experiences, meaning they are more likely to head off in search of something new if they find their current workplace or role to be lacking.

The result is greater scrutiny of companies as potential employers and higher standards overall in regard to what people are looking for in their professional careers. And yes, that might mean higher turnover – in the companies who don’t make the grade.

These high expectations are a good thing, driving up standards and treatment of workers across industries. We’ve been at this ‘work’ stuff a while now, and we’ve had plenty of help along the way in terms of research and technology to help us make it much more enjoyable for everyone. And while it’s true that a third of new hires won’t even make it six months before moving on, this isn’t to say that you can’t keep hold of good people if you build and maintain the right culture. For example, Gen Z are the most likely people to stick around if they’re offered upskilling opportunities.

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How rewarding long service builds value and purpose

At its simplest, basest level, a working relationship is transactional: an exchange of money for time. But haven’t we gone beyond this? One thing that stands out about the newer generations of workers is the desire for a more meaningful relationship with work.

These guys are looking for purpose, value and connection, not just cold hard cash. The balance of power has shifted, and we see this in the new management culture of the modern world, which is much more employee-centred. Rather than feeling like they owe their employer loyalty simply because they’re being paid, Millennial and Gen Z employees are looking for a mutual exchange of value.

Where the employee–employer relationship is robust, when the work is meaningful and/or the individual gains a sense of purpose from it, there is no reason why long and happy working partnerships can’t exist. These new standards might make long service more difficult to achieve, but they also make it much more covetable. If you can keep these highly invested, passionate people within your organisation for a long time, you will reap huge rewards – but these rewards must be mutual.

A great way to recognise and facilitate these kinds of working relationships is through long service awards.

What is a long service award?

A long service award (LSA) is exactly what it sounds like – an award given in recognition of long service, ie an extended, uninterrupted period of employment with one employer. What counts as ‘long’ service will depend on the organisation, and perhaps the industry. However, with Millennials, on average, staying in a role for 2.75 years, we might need to revisit earlier definitions of ‘long’ service.

LSAs are a great way to demonstrate your appreciation of your staff’s hard work and dedication. They show that you do not take this for granted and that you recognise the commitment they have made. Staying with one employer always comes with an opportunity cost, the eternal ‘what if’, and it’s so easy to wonder if the grass might be greener elsewhere. LSAs are a way to say, ‘We see you – thank you for sticking with us.’ 

Commitment isn’t linear

If you follow a tiered LSA model, don’t make the mistake of seeing the nearer-term milestones as less important. The first five years of someone’s time with you might be harder to lock in than the last five. The stakes are higher earlier in someone’s career, and younger employees will be thinking about the opportunity cost of sticking around and the things they are saying no to. There is a much broader possible future ahead of them with lots of shiny potential doors to ignore. In some senses, the closer you are to retirement, the lower the stakes and the less incentive there is to leave.

This is not to say that you reach a point of diminishing returns where the value of long service stops increasing. Quite the opposite – accumulated knowledge has no limit, and the value to the employer is immense. Rather, you are recognising and rewarding different things at either end of the long-service spectrum. Early on, it’s the commitment and willingness to see a future with your company, to close other doors and walk further down the path you’re offering them. It’s a celebration of the promise of a long future together. Later on, you’re recognising the value of the time someone has already committed and what they are now worth to you, as an employee and an intellectual asset.

Over time, an employee’s value to the organisation increases. While they may expect to receive promotions and pay rises over this time, these are rarely commensurate with the compounding increase in value that a long-serving employee has. This value takes the form of in-depth knowledge and understanding of the company, its operations and its clients/customers. A long service award goes beyond a mere ‘thank you’. It is a public recognition of how valuable this person is to the company, signified by giving them something valuable in return.

How can you encourage long service?

You can’t use LSAs as the carrot at the end of a long and unpleasant stick. They are less of an incentive and more of a reward. The award itself will not motivate someone to stay in a job; if you try to use it this way, you will be disappointed. The roots of long service go much deeper and are nurtured by building a happy and healthy workplace environment and culture. The day-to-day is what will either naturally lead to long service as the norm or push talent out of the door.

Think about it: would you suffer through a toxic culture for ten years, even five, for an extra week off? A £1k bonus? Unlikely. The cost to your physical and mental health would far outweigh it. The professionals of today’s (and tomorrow’s) workplaces will not be so easily bought.

Loyalty and long service go hand in hand, and loyalty must be earned. It cannot be bought or expected. Loyalty is based on trust, built through consistent action and honest communication. This is why culture is key to the success of LSAs. You can have the best award programme going, but if you don’t have a culture that supports long service, you won’t be giving out many of them.


The benefits of long service awards for the employer are not only cultural. The positive impact on culture also has knock-on benefits for the bottom line, and the long-term ROI of LSAs is substantial. Recognition increases engagement and performance, which lifts productivity. Retention, inherent in long service, is also a big money-saver, avoiding the need for costly recruitment processes.

We can’t talk about money without talking about tax, and there may be tax implications for LSAs that are worth factoring in. You don’t want something that is supposed to be a reward to end up costing people money or creating a financial headache. A tax saving on the company side, if it translates to a tax liability on the employee end (for example, in the form of ‘benefits in kind’), is unlikely to create the goodwill and loyalty you had envisaged. Make sure, when considering the tax benefits and liabilities of an LSA, that you’re looking at it from both sides.

Key takeaways

If an employee has been working for you for five or more years, that’s a big chunk of their time and life that they’ve committed to you. This should not be taken for granted. More than that, it deserves to be recognised and celebrated.

Remember that LSAs are rewards, not incentives. You incentivise long service through a happy, healthy workplace culture and non-toxic workplace policies and practices. This will naturally lead to long service, which you can celebrate through milestone rewards. This may create a virtuous cycle and increase the likelihood of long service, but this is a happy side effect rather than the main purpose.

So, if you haven’t previously seen the need for or understood the value of an LSA programme, perhaps now is the time. They are a small but important part of an overall reward and recognition culture that will attract and retain workers of all generations. 

And of course, we have to mention that we think extra leave is the best reward you can get!

Abi Angus Leave Dates


Abi is a freelance writer based in Brighton & Hove, UK, writing for businesses about work, life and everything in between.