Many People and Culture Managers struggle to justify investment in employee Reward and Recognition Programs that drive engagement, reward loyalty, and improve morale. Companies investing in effective Employee Reward & Recognition (R&R) programs are seeing measurable improvements across key performance indicators (KPIs). Here’s an overview of Australian HR benchmarks that can help you justify your investment in Staff Reward & Recognition.
Australian KPI HR Benchmarks:
Staff Retention Rate: 85%
o Turnover is inevitable due to career transitions, retirements, and organizational changes. Maintaining an 85% retention rate ensures a healthy balance, allowing flexibility while minimizing costs associated with high turnover.
Staff Turnover Rate: 15%
o Australian HR Institute and Mercer Australia, many industries experience an annual turnover between 10% and 20%. A 15% rate is considered balanced, signifying that companies are effectively managing employee loyalty while allowing for staff mobility and organizational change.
Absenteeism Rate: 6.5 days per employee annually (~3%)
o The 6.5-day figure aligns with Australian health and employment data, which suggests that a typical employee takes around 6-7 days off per year due to sickness or personal reasons. Organizations that invest in employee engagement and health initiatives tend to see lower absenteeism, sometimes reducing it by up to 41% (Gallup, 2020).
Staff Engagement (eNPS Score): +20
o According to research by Gallup and Voice Project, Australian organizations typically see eNPS scores ranging from -10 to +30, with top-performing companies often reaching +40 or higher. An +20 score places a company comfortably within the healthy, positive engagement zone.
These benchmarks serve as vital indicators for assessing workforce stability and engagement across all Australian industries.
Employee Reward & Recognition Benchmarks
Recommended Reward & Recognition Investment: 1-2% of Payroll.
o To effectively nurture employee engagement and retention, industry best practices suggest that organizations allocate between 1% and 2% of total payroll to employee reward and recognition programs. (Australian HR Institute (AHRI))
Average Reward & Recognition Spend $1,015 Per Employee Per Annum
o Australian HR consultancy firms and industry surveys report that organizations on average spend between $1,000 and $1,200 per employee annually on recognition programs. This includes monetary rewards, awards, ceremonies, and non-monetary acknowledgments such as public recognition.
Employee Recognition KPI Results to expect:
Research from the highlights the transformative power of effective recognition programs:
51% lower employee turnover
o Organizations with strong recognition initiatives experience up to 51% lower turnover. (Gallup Workplace Report (2023))
41% decrease in absenteeism
o organizations that prioritize recognition report reductions of up to 41% in unscheduled absences (Gallup (2020))
45% decrease in recognised employee turnover
o Employees who regularly receive recognition are significantly more engaged and committed to their employer, which directly impacts their decision to stay. (Gallup Workplace Report (2023))
10-15% Productivity Improvement
o Implementing effective reward and recognition programs can lead to a significant 10-15% increase in productivity among employees. (Bersin by Deloitte (2020))
1.8 times more likely to be a highly engaged employee
o companies prioritizing employee recognition are 1.8 times more likely to see higher engagement levels In Australia, (Achievers Workforce Institute (2024))
The Financial Benefits of an Employee Reward & Recognition Program
Investing in employee reward & recognition isn’t just good for morale—it’s a strategic move with bottom-line benefits:
Return on Investment = 100%-500% ($2-$5) Range
o ROI estimates suggest every dollar spent on recognition yields $3 to $5 in measurable benefits, including increased productivity and lower recruitment/training costs (Bersin by Deloitte, 2020).
o Organizations investing in recognition programs report an ROI range of $2 to $4 per dollar, depending on implementation quality and organizational size. (WorldatWork (2021))
ROI Australian Benchmark – 200% ROI – $3 return for each $1 invested
A quick example for a company with $3m payroll and 40 employees
- $3m payroll with 1.5% Reward & Recognition Budget of $45k
- Cost is $1,125 per employee per annum
- Invest $45K should return $135k
- $90k return on $45k = 200% ROI
Aligning your HR strategies with Australian benchmarks and adopting comprehensive employee reward & recognition programs can significantly improve your organizational performance. Remember, industry best practices recommend dedicating 1-2% of your payroll to these initiatives — a small investment with tremendous returns.
By investing in your people, you’re not only reducing costs associated with turnover and absenteeism but also cultivating a high-engagement culture that drives long-term success.
If you would like MicroGifts to apply the Australia HR Benchmarks to build you a Reward & Recognition Plan for your business let us know. We use ChatGPT to build a program specific to your company needs and budget with supporting justification and a calculated ROI.
Email us at support@microgifts.com and we will build a draft in 2 business days.