LDN - Business

In a tight labor market, companies bet big on five-year rewards

[December 10, 2018] By Chris Taylor

NEW YORK (Reuters) - In the old days, longtime employees in the United States were honored with a gold watch after 30 years or so at a company.

Well, they have got nothing on Hadas Streit.

The senior vice president at the global public relations firm Allison + Partners recently returned from a one-month paid sabbatical, awarded to staffers after only five years at the company. During that time, she rented a house in Cape Cod for a couple of weeks.

Streit, who is based in New York, swears she did not check her work email once.

"The last time I wasn't working was back when I was a kid," says Streit. "It's a little scary, but when you come back, you feel refreshed, with new drive, and ready to work again."

Streit is not alone in enjoying some fast-tracked work recognition. Workplace anniversary awards are offered by 63 percent of companies, according to the 2018 Benefits Survey of the Society for Human Resource Management. And rewards rose 9 percent in a single year.

The five-year honor has taken particular hold in work cultures like Silicon Valley, where intense lifestyles and endless project deadlines can easily lead to employee burnout.

Social media giant Facebook <FB.O> has been offering its "Recharge" program since 2015: It is a 30-day period (the days have to be continuous, but do not have to be taken right at the five-year mark) which staffers can use as an "uninterrupted break to refuel and relax," said Tudor Havriliuc, Facebook's vice president of compensation, benefits and global mobility.

So what is going on? Well, just take a look at the nation's employment situation: Joblessness is near historic lows, currently at 3.7 percent of the population, according to the Bureau of Labor Statistics. In a recent poll of small business owners, 37 percent reported having openings they could not even fill – the highest figure in the survey’s history, according to the National Federation of Independent Business.

At the same time, companies are reluctant to boost wages, in order to keep profits up. So, one way to honor employees and improve retention, without a huge wage hike, is the service anniversary award.

And since hardly anyone stays with a company 30 or 40 years these days, more companies are honoring longevity after only a few years on the job, when staffers are in their prime and most likely to be scouted by rival firms or executive recruiters.

HAPPY WORK ANNIVERSARY

“In today’s job market, there are more jobs than applicants, and the competition for top talent is greater than ever,” said Vanessa Hill, spokeswoman for the Society for Human Resource Management. “Organizations are identifying which compensation benefits are most helpful in getting employees in the door and keeping them – and service anniversary rewards are trending up.”

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A painting is pictured at the Facebook headquarters in Menlo Park, California January 29, 2013. REUTERS/Robert Galbraith

But it is not just sabbaticals that employees are enjoying after only a few years on the job.

SIB Fixed Cost Reduction, which helps businesses find savings in their regular monthly expenditures, offers employees a fat check for $50,000 after they reach their 5-year work anniversary.

“The thought process was, people don’t stick around at jobs for a long time anymore,” said Dan Schneider, chief executive officer of the Charleston, South Carolina-based company. “A lot of times, people leave for a little more pay. So an award like this shows you can still grow within your company, and earn more money, without having to leave.”

Most of SIB's competitors might hold onto staffers for 24 months, Schneider said. By tempting employees with a gigantic check, his own firm now boasts average retention of four years.

Of course, as humans typically have bad money instincts, there is always the possibility that they might spend these milestone cash awards on unnecessary stuff.

So, instead of using a cash gift to glam up your lifestyle, devote it to something else that will improve your situation for the long-term – like wiping out student debt, a downpayment for a house or a wedding, advises SIB’s Schneider.

And if it is a sabbatical you are entitled to, here is some advice from Hadas Streit: Use it.

After all, the purpose is to have fun, recharge and come back reinvigorated. If you end up checking your work e-mail every five minutes, you are defeating the purpose – and cheating both yourself and your employer, Streit said.

"When I tell people I got a month off after five years on the job, folks are in shock because they never heard of that before,” she says. “I feel like I took a really long nap.”

(Editing by Lauren Young and Bernadette Baum)

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