By Janet Watts 

Combat job hugging and boost retention with strategic employee recognition. Learn why engaged employees stay longer and how HR leaders can reduce turnover costs.

Thoughts of turnover can keep HR leaders tossing and turning all night. Loss of productivity, organizational disruption, and replacement costs resulting from turnover make retention a strategic priority, often with employee engagement as the go-to solution. But what are the right moves when disengaged employees don’t leave? According to Gallup’s Employee Attraction and Retention Indicators (Gallup.com) half of employees are open to leaving their organization. Ignoring the need to drive engagement when turnover is low due to temporary “job hugging” is shortsighted and may undermine long-term retention goals.  

Why it’s important to retain employee retention as a priority 

High turnover nightmares are data-driven.  

• According to Gallup, the cost of replacing an employee can range from 40% to 200% of salary, depending on the role. (Gallup.com) 

• U.S. businesses lose about $1 trillion annually due to voluntary turnover. (Gallup.com) 

• According to Second Talent, turnover’s hidden costs include lost productivity, recruitment, onboarding, knowledge loss, and team disruption. (Second Talent) 

The measurable dollars are scary, but the cost to organization culture can be even more difficult to recover. 

Employee recognition is a powerful tool to increase retention 

• Gallup (in partnership with Workhuman) followed nearly 3,500 employees between 2022–2024 and found that employees who receive what they deem high-quality recognition (meeting multiple “pillars” of strategic praise) are 45% less likely to leave after two years. (Gallup.com) 

• Forbes reports that a strong recognition culture correlates with a 43% increase in retention and an 84% increase in reported intent to stay longer-term. (Forbes) 

• An Inspirus case study estimates that a company of 10,000 employees could save $2 million per year by investing in recognition rather than just paying for turnover. (Inspirus) 

• Conversely, employees who do not feel adequately recognized are twice as likely to say they’ll quit in the next year. (Gallup.com) 

• Recognition correlates strongly with engagement, and increased engagement tends to reduce turnover and increase discretionary effort. (Incentive Research Foundation) 

Why hugging the huggers matters  

Job huggers are employees who stay in their current positions instead of leaning into new opportunities. If these huggers are disengaged or fear uncertainty, they should not be ignored, especially since one in two employees are open to leaving. (Gallup.com) Strategic recognition has the power to increase engagement and retention. 

Under the frosting: Creating a powerful recognition program  

To harness the power of recognition, it’s important to create an authentic channel for true appreciation, not just optics. In a joint report, Workhuman and Gallup identified that employees who strongly agree that recognition is part of their organization’s culture are 3.7 times as likely to be highly engaged — and half as likely to suffer frequent burnout. (Business Wire).

A powerful recognition program will be: 

• Aligned with your organization’s core values  

• Authentic and equitable 

• Timely and consistent 

• Personalized  

• Practiced Broadly Across the Organization 

Final thoughts 

Recognition is a key engagement driver that can build trust and loyalty in your organization. Team members who feel valued for the impact they make are less likely to leave and more likely to increase productivity and contribute to a desirable company culture. Now more than ever it is important to invest in creating a strategic recognition program that is aligned with core values, authentic, equitable, timely, consistent and personalized. A strong, well planned recognition program will increase retention and decrease short-term and long-term turnover concerns.   

Contact Keystone Partners today to learn how we can support your organization.