Employee loyalty just isn’t what it used to be.
The days of one employee working for one company for an entire career and ultimately retiring from that company, with pride and pension, are, to a great degree, going away.
With today’s mergers and acquisitions, company closings, downsizing, accounting irregularities, tarnished images and intense economic pressure on company portfolios and pension plans, an employee is likely to leave with neither pride nor healthy pension, and maybe even a lot sooner than an anticipated retirement.
The larger the company, the more likely there is to be decreasing employee loyalty. In research we conducted at NFI Research, we found that at large companies (those with 10,000 employees or more), employee loyalty is dramatically decreasing, while at small companies, loyalty is actually increasing.
At large companies, almost 60 per cent of respondents said employees are less loyal than two years ago. In small companies – those with fewer than 100 employees – almost half said that loyalty has increased from two years ago, with most of the others saying there was no change.
For the most part, the larger the company, the less loyal the employees are and the smaller the company, the more loyal the employees are.
The 10 Steps to Employee Loyalty
The good news is that businesses have an opportunity to increase employee loyalty by taking some concrete steps today. Here are the top 10 solutions for organizations to maintain or improve employee loyalty two years from now, including comments from business executives who responded to our survey.
Increase confidence in leadership. Employees want to feel their leaders know where they’re going, since the employees have to follow that path.
“Confidence in leadership is something you don’t hear much about in connection with loyalty. However, if people have confidence in their leaders they will have confidence in their future.”
Improve company culture. What it’s like to work at a company is more important than salary to increase loyalty. This means people need to be treated fairly.
“I used to be 100 per cent loyal, but now it is everybody for themselves. The current work culture does not encourage loyalty, which adversely affects productivity.”
Increase trust. “Trust is the key issue! The growing gap between executive compensation and what the ‘proles’ receive does little to increase this. A company with the courage to consciously increase the market value of their staff through training and other means long before the redundancies occur would reap double benefits.”
Said another: “It isn’t the monetary rewards that build loyalty – it is the feeling of adding value, making a contribution and being trusted that matter most in building an organization of loyal employees.”
Create advancement opportunity. Employees want to progress. Businesses need to provide a growth path, which becomes increasingly difficult in a shrinking economy.
Promote stability of company. “In this economy, employees in general do not expect substantial financial increases. Job and company stability and staying power have prominence in most employees’ (and managers’) minds.” Provide autonomy and challenge. Provide some tough challenges for employees and get out of the way! When given the chance, many conscientious employees will rise to a challenge because they desire to make a meaningful contribution.
Provide stability of job. It’s tough to make or get guarantees these days, but job stability stands for a lot when everything else around the employee seems to be changing.
“We seem to be loosing our younger, promising people due to the extreme demands of a consulting organization. Since we have experienced layoffs in the past two years, their feeling seems to be more of ‘why should I compromise my life when the stability isn’t there anymore?'”
Fairly compensate. In the post dot-com world, fair pay is expected. Also, managers now prefer performance compensation ahead of equity.
“Companies are taking advantage of unemployment rate by lowering compensation and forcing signing of non-competing contracts. Loyalty is out the door.”
Provide flexibility. Many are looking for a more balanced life, especially in these trying times.
Monitor benefits. It’s not just the salary that matters for loyalty, it’s the other company programs, such as health care coverage, matching company contributions and employee stock ownership plans that can more closely link an employee to a company. Everybody is well aware of current market conditions. When the economy rebounds, it will be the loyal employees who help your business rebound with or ahead of it.