Scrap Rewards for 25 and 35 Years of Service
In Belgium, employees receive a tax-free bonus on their 25th and 35th year of service as a reward for their long-term commitment. While this may seem like an attractive form of recognition at first glance, the system is hopelessly outdated, says recognition expert Nathalie Arteel in De Tijd.
“Our system for rewarding key milestones completely misses its purpose.” – Nathalie Arteel
Our approach to rewarding major milestones is entirely ineffective. The way many companies reward their employees comes from the industrial era and is based on materialistic thinking. It assumes that people will spend their entire career at one company and that the primary form of retention is cash.
It’s clear that this approach no longer works. Data from HR group Acerta shows that 97.8% of employees under 25 and 80.4% of those aged 25–34 leave within three to five years. Additionally, 82.5% of employees aged 36–45 leave after six to ten years. In fact, 99.9% of the companies surveyed cannot retain employees for more than ten years. The study shows that turnover is highest in the first years of employment.
The first two Years are crucial
The first two years are critical when building a retention strategy. One of the main reasons employees leave during this period is the lack of recognition from their manager, according to the latest report from consultancy Gallup. People are attracted by competitive benefits, but they leave because they do not feel heard, seen, or valued.
“People leave a company primarily because they do not feel heard, seen, or appreciated.” – Nathalie Arteel
Many business leaders and HR directors still believe they are showing appreciation if they have a strong rewards policy — including a cafeteria plan, collective labor agreement perks, consumption and eco-vouchers, and pension and mobility plans. However, for many young employees today, these forms of rewards are less important.
What truly matters is that their contribution is validated. They want to feel that they are more than just a number and to feel connected in a way that goes beyond salary. They want immediate recognition when they do something good and expect rapid feedback — otherwise, they leave. On this front, our current system fails.
“Employees want to feel that they are more than just a number, and to feel connected in a way that goes beyond salary.” – Nathalie Arteel
Personal Milestones
Behavioral science shows that certain personal milestones — such as starting a new job, completing the first year, marriage, birth, or bereavement — are accompanied by strong emotions. How an employer or manager responds to these moments has a significant impact on the employee experience.
It is time to rethink our approach to rewards and recognition, and for the government to introduce policies that reflect modern society. Companies should be given the freedom to spend a tax-free amount per employee per year to reward them in ways aligned with the company’s values.
“The government should give companies the freedom to spend a tax-free amount per employee per year to reward them in line with what the company values.” – Nathalie Arteel
Small Positive Moments
Instead of waiting until employees reach 25 or 35 years of service, we should invest in small positive interactions from the very beginning to strengthen the bond between employees and the organization.
Companies should be encouraged to create a culture where people truly feel seen and valued — not just through financial rewards, but through genuine recognition and emotional connection. Only then can we build a work environment where employees truly thrive.
“Companies should be encouraged to create a culture where people truly feel seen and valued, not just through financial rewards.” – Nathalie Arteel
This opinion piece by Nathalie Arteel was originally published in De Tijd, August 2024: ‘De prullenmand | Weg met beloningen voor 25 en 35 jaar dienst’.
