Loyalty is a word that may seem old-fashioned and outdated, especially when it comes to work. For most people, loyalty means a long-term commitment, an allegiance, support, and faithfulness. But current employment data shows that loyalty to employers has diminished. The median tenure of workers is 4.1 years, according to the U.S. Bureau of Labor Statistics Employee Tenure Summary released in September. The median tenure drops to 2.8 years for workers between the ages of 25 and 34.
A Short History of Loyalty at Work
In post-World War II America, an employee could reasonably expect long-term employment, often for decades, with one employer. Someone started perhaps in their 20s, worked up a career ladder, and retired with a nice send-off party and a gold watch. There were upsides and downsides to this implied agreement between employers and employees, but it was what was expected by both parties.
In the 1970s, economic realities, including high crude oil prices, inflation, and uneven economic growth, led employers to cut back on some perks, such as bonuses, company cars, and club memberships. In the 1980s, bank failures and a recession prompted employers to lay off employees, in many cases for the first time. In the late 1980s and ’90s, employers with healthy bottom lines began to lay off workers for efficiencies, slimming down the payroll for increased profitability and greater shareholder value. It is easy to imagine where and why the erosion of employee loyalty began.
Employee loyalty continued to wane as employers sought to reduce costs by passing on greater portions of health care costs to employees and cutting retirement benefits. While many of those changes were part of real increases in the costs of those benefits and the resulting pressure on employers, employees responded by putting greater distance between themselves and their employers.
What Does Modern-Day Employee Loyalty Look Like?
Loyalty at work isn’t gone, but it looks different than it did decades ago. It is characterized by mutual commitment between the employer and the employee, and it requires conscious give and take, rather than an assumption. Employees feel loyal when they are treated as individuals and their needs are acknowledged. Employees who are loyal say unprompted good things about their company. They recommend its products and services and champion it as a great place to work. Loyal employees provide honest, constructive feedback on how to improve the company, not complaining but sincerely seeking ways to make the organization better. At the end of the workday, loyal employees usually feel like they have done something worthwhile.
Why Does It Matter?
The first advantage is longer tenure. Longer tenure correlates to more experience, and more experience can lead to greater efficiency and effectiveness. Loyal employees represent a strong employer brand, making it easier to attract candidates and retain great talent. It can lead to a better customer experience. A key characteristic of loyalty is staying in the employer-employee relationship, overlooking some of the organization’s shortcomings because the employer values what the employee brings.
What Can Employers Do to Foster Loyalty?
First, increased pay probably isn’t the best answer. Employees can show up and do consistently good work and still not have allegiance and commitment to their organization. This is a transaction – work for pay – but lacks the sense of dedication that defines loyalty. However, paying employees fairly may go a long way toward acknowledging their value to the organization.
Benefits that require vesting, like 401 (k) plans, may not be sufficient incentive either, especially since employees shoulder the risk associated with investments. These kinds of benefits are portable and, despite vesting requirements, can be carried from employer to employer or rolled over into individual IRAs. Employees may leave all or a portion of an employer match behind, but it is an acceptable trade-off for an employer that supports them in other ways.
Benefits that recognize the needs of employees show that the employer hears and sees employees. Employers can ask their employees about what matters most and exercise creativity in building a total rewards package. Examples may be increased or more flexible time off, working remotely, parental leave, and time away for education and training.
It’s well-documented that a sense of purpose can inspire dedication and engagement. Employers can help their team members see how and why their work matters to both the organization and external stakeholders.
Flexibility is one of the top drivers of employee engagement. Employees are looking for options about where, when, and how they work. Autonomy, a close relative to flexibility, means giving employees as much choice and control as reasonable over their work. Autonomy is also linked to mitigating burnout.
Employees want to see a clear path or paths to their professional goals, including milestones, regular feedback, and learning opportunities. Employers can work with employees to help them see what options may be next and how to get there.
Employers should keep commitments to employees, much as they would to customers. That can sometimes mean being careful about choosing commitments to ensure they can make good on them.
Employers can help supervisors inspire loyalty by training, coaching, and developing them. The seeds of employee loyalty are often sown in the one-on-one relationship employees have with their supervisors. Supervisors who demonstrate care for their employees as people and not just workers are most likely to inspire loyalty. Showing compassion, asking good questions, listening effectively, following up, and navigating conflict do not come instinctively to everyone, so supporting supervisors may lead to them supporting their employees.
Employers Council offers an array of training options that help supervisors develop essential skills. To find out more, check out the training catalog on our website. If you have any questions, contact us at info@employerscouncil.org.
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