Setting a Budget for Your
Employee Service Award Program

Effective Budgeting for Your
Service Recognition Awards

Establishing a Budget for Your Employee Service Recognition and Awards Program

budgeting-recognitionOne of the crucial initial steps in defining your new Employee Service Recognition Program is estimating the budget requirements for both the first and second years. A well-planned budget not only helps in outlining the scope of your program but also plays a pivotal role in gaining management approval.

Define Your Program's Service Milestones and Award Levels

Before setting your budget, it's essential to determine which employee service milestones, or service anniversaries your program will include and the tier-level of the recognition packages for each anniversary. (Refer to the previous section for guidance on defining Service Milestone Categories.)

First-Year Budget Calculation

Step 1: Identify Milestone Categories

all-service-award-yearsStart by listing all the service milestone categories you plan to include, such as the completion of new-hire onboarding, early service milestones (1-year, 3-years, etc.), and the standard service anniversaries (5, 10, 15 years, etc.), plus any special Retirement Recognition.

Step 2: Assign Award Levels

Assign appropriate tier-level recognition award packages to each of your included service milestones. Select-Your-Gift offers a wide range of tier-level award packages to fit your company's budget. 

Step 3: Determine if you will be including any Catchup Recognition

When a new Service Recognition Program is rolled out, one common concern is what to do about service anniversaries that were recently missed, before the program was officially launched. See more about Catchup Recognition.

Step 4: Calculate First-Year Costs

With data from Human Resources, calculate the budget for the first year by multiplying the number of employees reaching each milestone by the cost of the assigned award packages. Optionally, include any catch-up awards for recently missed milestones.


Adjust and Refine Your Budget

Evaluate and Adjust

During the budgeting phase, re-evaluate all elements of your plan. Adjust the award package levels as needed to align with your budget constraints. For example, you might decide to recognize certain early milestones with lower-cost awards to manage expenses better.


Projecting Future Budgets

Step 1: Estimate Second-Year Costs

Project the budget needs for the second year based on the number of employees who will reach various milestones during that period. This projection will provide a clearer picture of the ongoing costs of the program.

Step 2: Plan for Subsequent Years

Use the second-year budget estimate as a baseline for future years. This estimate will help you anticipate the typical annual budget needed to sustain your Employee Service Recognition Program.


Key Considerations

  • Early Recognition and Onboarding: Including early recognition milestones, such as onboarding, can help integrate new employees and foster a sense of belonging from the start.
  • Cost Management: Be strategic about which milestones receive higher-cost awards. Balancing recognition with budget constraints is crucial for a sustainable program.
  • Approval Process: Present a detailed budget to management, highlighting the benefits of the program and the importance of recognizing employee service.


Setting a realistic and well-structured budget is fundamental to the success of your Employee Service Recognition Program. By carefully planning and adjusting your budget, you can ensure that your program is both effective and sustainable, ultimately contributing to higher employee satisfaction and retention.

ablue-arrow-right Need help calculating Employee Milestones? Get our FREE Length of Service Calculator! With this Excel Template and your employee data, you will never miss any service anniversaries.

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