The Total Economic Impact™ Of Workhuman

Improved Employee Retention

Evidence and data. Interviewees explained that employee retention metrics tied to recognition were closely tracked at their organization. Interviewees shared that internal studies of their own employee data indicated that higher employee adoption of peer-to-peer social recognition practices drove higher engagement levels and higher retention for tenured employees (employees working at their organizations for at least one year).

• When asked to describe the overall value of Workhuman, the head of total rewards at a specialist materials company said, “It’s an increase in employee engagement and a decrease in turnover.”
• The senior director of people experience at an information technology organization confirmed, “We do have analysis that shows that higher engagement leads to lower voluntary attrition.” They continued: “It was actually lower dollar value recognition. We can afford to do more of it and more is better. This is from a peer-to-peer standpoint. That’s one of the things that we learned through the study that led to our redesign. For the leaders, the dollar amount was a little bit more important.”
• The director of global compensation at a manufacturing organization said: “We found that the highest retention occurred by coupling points-based recognition with eThanks — a non-monetary recognition and cash award. If they were just using cash, the retention was not as [high].”
• The director of global compensation continued: “[What was helping on the retention side] was that employees were getting frequently recognized, not just by their manager but also by their peers. We also found great statistics on retention if people were both giving and receiving.”
• On Workhuman adoption, the VP of learning and development systems at a financial services organization said: “Recognition is lumped into our culture. It’s ingrained in our culture. We have very, very high usage in the [Workhuman] tool.”
• In a similar vein, the senior director of people experience at an information technology organization shared, “We’ve increased peer-to-peer participation 35% year over year since launching the program.”

Modeling and assumptions. For the financial analysis as applied to the composite organization, Forrester assumes:  

• There are 50,000 employees, of which 90% are tenured employees who have at least one year of employment at the composite.
• The attrition rate before Workhuman was 10%.
• The reduction in attrition rate with Workhuman is 4%, resulting in an attrition rate of 6%.
• The Workhuman adoption rate is 65% in Year 1, 70% in Year 2, and 80% in Year 3.
• The composite retains 1,170 employees in Year 1, 1,260 employees in Year 2, and 1,440 employees in Year 3.
• The cost to replace an employee is $18,000, or one-third of the average employee’s salary.

Risks. This benefit may vary among organizations based on:

• The number of employees and length of employment.
• The attrition rate before Workhuman.
• The extent to which employees adopt Workhuman.
• The cost to replace an employee, which may include recruiting/interviewing time, training time and costs, and other indirect costs (e.g., lost productivity, etc.).

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $48.8 million.

Improved New Hire Retention

Evidence and data. Interviewees explained that the same drivers for tenured employees held true for new hires: higher adoption of recognition led to higher engagement and retention levels. For new hires (those employed for less than one year) interviewees explained there was a higher attrition rate across the organization and a higher improvement in retention because of Workhuman.

Modeling and assumptions. Based on the interviews, Forrester makes the following assumptions about the composite organization:

• There are 50,000 employees, of which 10% are new hires.
• The new hire attrition rate before Workhuman was 12%.
• The reduction in the attrition rate with Workhuman is 5%, resulting in an attrition rate of 7%.
• The Workhuman adoption rate is 65% in Year 1, 70% in Year 2, and 80% in Year 3.
• The composite retains 163 employees in Year 1, 175 employees in Year 2, and 200 employees in Year 3.
• The cost to replace an employee is $18,000, or one-third of the average employee’s salary.

Risks. This benefit may vary among organizations based on:

• The number of new hires.
• The new hire attrition rate before Workhuman.
• The extent to which employees adopt Workhuman.
• The cost to replace an employee, which may include recruiting/interviewing time, training time, and other indirect costs (e.g., lost productivity, etc.).
• The vacancy periods and time to fill roles based on revenue, per employee standards.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $6.8 million.

Unquantified Benefits

The interviewees mentioned the following additional benefits that their organization experienced but were not able to quantify:

• Enhances company culture and values. Forrester research states, “Recognition platforms are a powerful tool for publicly showcasing behaviors aligned with organizational culture.”⁴ With the ability to directly tie recognition sentiments to company values within the Workhuman platform, employees share and remind one another of how they embody the company culture. Leaders also gain the ability to highlight particular employee recognitions and contributions at department or companywide meetings during discussions of culture and values.  
  • The senior director of global HR platforms at a food and beverage organization said, “Every time you recognize someone, you choose one of our seven company behaviors.”
  • The director of global compensation at a manufacturing organization said: “In our employee survey, it constantly iterates that employees are overall living our core values. I feel that having a recognition program that reinforces the core values really supports a culture of belonging and community.”

• Drives adoption, utilization, and participation through a collaborative, ongoing partnership. Workhuman collaborates with HR leaders throughout their customized recognition journey — from onboarding and implementation to program adoption and continuous optimization — to achieve success that’s aligned with organizational strategy. Workhuman dedicates in-house onboarding specialists to support leaders in understanding and overcoming employee adoption challenges. The Workhuman team also supports program administrators in understanding how the platforms’ embedded technology continues to evolve and offer new value. Leaders appreciate Workhuman’s willingness to listen and iterate on product feedback as their organizational needs for recognition change.
• Provides data science-driven analysis on desired business outcomes. Workhuman’s social analytics team helps design and measure the impact of the most important business outcome metrics tied to recognition. This allows HR teams to communicate the success and tangible impact of recognition across their organization to leadership. These metrics also optimize the worker experience for employees and drive engagement, retention, and company culture.
• Promotes cross-functional collaboration. The peer-to-peer aspect of the Workhuman platform gives colleagues who do not routinely work together the opportunity to recognize one another and establish a greater connection. This cross-functional approach creates the possibility of new future working groups and cohesion across the organization.
  • The VP of learning and development systems at a financial services organization said: “There’s a lot of people that step in and help on a lot of different projects. It’s a great opportunity for somebody who’s maybe not the direct manager of somebody to say, ‘Hey, I have this project team that’s been working on this with me. I’d love to send these five awards.’ It allows that cross-functional recognition.”
• Fosters fairness in recognition culture. With access to platform features focused on promoting employee inclusion, leaders can design more equitable and consistent giving and receiving recognition practices. Consistent recognition is of particular importance to different types of workers (knowledge workers versus deskless workers) who may have access to different types of technology. Workhuman’s SOLI reflects the spending patterns of employees and ensures a fair and consistent award experience for employees worldwide.⁵ The inclusion advisor capability embedded within Workhuman helps employees tease out implicit bias in recognition award descriptions. Finally, the Workhuman global reward store provides access to employees in all countries for reward redemption in the same manner.
  • The senior director of people experience at an information technology organization said: “We’ve made it a long way with this new design where we’ve taken it all totally up to corporate on the main program side. That’s what opened up the flexibility for more fairness and equity in our culture. It’s not dependent on how the leader chooses to let people use the budget.”
  • The senior director of global HR platforms at a food and beverage organization said: “There is a constant focus on frontline [workers]. Are they using it? Are they valuing it? The redemption piece is really important.”

• Facilitates administrative efficiencies through customized reporting and AI-driven insights. Managers and program administrators leverage the platform’s reporting capabilities to replace manual tasks. With customized reporting, program administrators can more effectively and accurately communicate global recognition efforts to leadership, both in terms of program success and overall budget spend. Based on the interviews Forrester conducted, administrators may save up to 20% of their time on responsibilities related to managing their recognition program.
  • The senior director of people experience at the information technology organization told Forrester: “We are partnering very closely with Workhuman to build more customizable options into their insights given the way our data is structured. … They provide benchmarking on behaviors which informs some of our KPIs and what we target. We’ve received insights from them as well around how to scale and go to market especially with our new launch.”
  • The VP of learning and development systems at a financial services organization said, “They do have the recognition intelligence portal, which provide easy dashboards to reference.”
  • The senior director of people experience at an information technology organization shared, “Workhuman has brought more capabilities into our own admin functionality in the tool which is more efficient for us.”

• Improves employee productivity. In addition to retaining employees, an increase in employee engagement also drives employee productivity. Ultimately, these benefits reinforce the main objective of driving desired business outcomes. The senior director of people experience at an information technology organization shared: “We have studied productivity though our best team’s connection to engagement. We know that our best teams are the most productive teams with the highest engagements.” As the director of global compensation at a manufacturing organization said, “The groups that are using recognition the most and the most effectively are the highest performing groups.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Workhuman and later realize additional uses and business opportunities, including:

• Evolving business outcome metrics and analysis depth. Interviewees shared excitement for continued analysis of the ways in which Workhuman drives business outcomes for their organization. They explained how analyzing the data — by slicing it in new ways and focusing on entirely new metrics — would allow them to further optimize their recognition program design.
  • At the time of the interviews, the compensation specialist at a specialty materials organization told Forrester that their organization was in the middle of analyzing recognition’s impact on absenteeism. The compensation specialist also indicated worker safety as an area of continued analysis. They said, “We’ve talked about implementing a safety program to correlate turnover and workplace incidents.”
  • The compensation specialist continued: “They’re also working on a diversity metric. They’re doing a gender analysis and demographic analysis too. It’s the first time we’ve looked to understand if there’s any discrepancies [in these areas.]”
  • The director of global compensation at a manufacturing organization said: “I’m hoping by next year to evolve metrics by region to take into account the worker categories and the percentage of managers. Right now, we’re still looking at a lot of things just globally.”
• Promoting in the moment recognition via integrations. By integrating existing tools and systems within the HR stack, including email and messaging platforms, interviewees shared how their organizations can more easily provide ways for employees to recognize collaborations and projects that are still top of mind. The VP of learning and development systems at a financial services organization shared: “It gives us that space, and we’re really looking forward to having it integrated in some of the day-to-day platforms like email and instant messaging. Having it ready and out there makes life a little bit easier, and maybe that’ll encourage more of that in the moment recognition.”
• Expanding recognition to additional employee groups. After recognizing the success of Workhuman across their global full-time workforce, some interviewees expressed desire to offer similar capabilities to other contributing groups. The senior director of global HR platforms at a food and beverage organization said: “We have a separate contractor system that has contractors in there. There’s been a request saying, ‘Why can’t we recognize our contractors?’” Integrations also allow organizations to adapt to meet the unique needs of their employee base.
• Using AI capabilities to drive further employee engagement. As AI continues to evolve the HR field, interviewees recognized the potential impact of Workhuman’s integration of advanced analytics and bias-mitigation tools. Interviewees shared examples of how their organization capitalizes on Workhuman’s evolving AI capabilities to optimize the employee experience, drive further adoption, and create efficiencies for program administrators.
  • The senior director of global HR platforms at a food and beverage organization shared a few examples of further engaging employees to interact with the platform: “How do we target communications to employees who may not be using it as well? How do we help employees write a recognition?”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).