Posted by on May 29, 2012 in Current Affairs, Heart Leadership In Practice, Leadership, Wisdom From Other Authors |

Employee Loyalty“Employee relationships with organizations are getting weaker which is why some people believe that company loyalty is dead.”

Matthew Bidwell
Wharton Management Professor

I believe we’ve reached a clear inflection point in American business.

Recent research from various sources puts us on warning that organizations have lost the strong bonds they’ve historically had with workers.  According to a recent [email protected] article, employee loyalty is at risk of becoming a thing of the past.

There’s no question that the last four years of constrictive recession have been especially hard on people.  Spirits have been worn down by long-enduring sacrifices accompanied by limited rewards.  But also greatly eroded through these difficult years is the once thriving sense of connection most employees felt with their firms and, with their respective leaders.

Consider these statistics reported in the article, “Declining Employee Loyalty: A Casualty of the New Workplace” published in Time Magazine this month:

  • According to MetLife’s 10th annual survey of employee benefits, trends and attitudes, employee loyalty has fallen to a seven-year low.
  • A 2011 Careerbuilder.com report revealed that three in every four full-time workers would leave their firm today if the right opportunity came along.
  • Other studies show the average company is experiencing 20% to 50% employee turnover each year.

It’s astonishing to me that there could be organizations entirely unfazed by these trends, and therefore less motivated to reassess their leadership practices and to effectively re-recruit their workers.  But according to Peter Capelli, head of Wharton’s Center for Human Resources, the recessionary times actually have led some companies to permanently change their attitude toward workers.  Many now choose to see them as “short-term resources,” and easily replaceable, he said.

This attitude might be successful in an environment where jobs are scarce and workers are fully committed to their jobs out of fear for not having one.   But when people come to feel less cornered by economic circumstances and have greater freedom as to where, and for whom they will work, it will be a losing proposition.

What leaders need to be reminded of at this point in the economic cycle is that workers actually prefer to be loyal.  People want to have continuity in their careers.  They seek and even need to be part of an organization’s grander mission.  This is because feelings of connection and contribution are profoundly important to human beings.  No man is an island.

A few days ago, I posted a straw poll on Facebook asking friends this one question:

What would it take to make you feel incredibly loyal to the organization for whom you work (assuming you’re not already loyal today)? 

Noting that many people are leery of posting any comments on Facebook related to their work, I nevertheless got 25 responses.   And what these folks offered as answers provides great insight to anyone managing people in the workplace today:

  • 8 respondents (32%) said, “Knowing my role matters and the work I do makes a difference.”
  •  8 others said, “”Honesty, integrity, humility and a mission greater than just profit.
  • 7 people (28%) said, “Having a boss who values and appreciates me.”

Only one person tied her loyalty to compensation, but qualified that response in saying, “More pay – If I contribute more.”  Most notably, not one person said they were unwilling to be loyal to their organization.

Whether they yet realize it or not, employers, and their leaders, have much at stake in losing their employees’ loyalty.  Because of the proliferation of social media, it’s very easy to discover the tone of an organization and it’s attitudes toward workers.  Firms with any ambitions of growing – or even becoming a magnet for great talent – can only be successful if they cultivate a culture where employees feel sincerely valued and even cared for.   There’s simply no way to fake it any longer.

And loyal people also are far more likely to put their hearts into the work they do and to always “look after the interests of their employer.”  In all my years of managing and leading people, I can tell you I intentionally made it a key objective to bond with anyone and everyone who was part of my team.  And those deep ties helped me to consistently win, and to attract the most remarkable talent.

While we’d like to believe loyalty is a two-way street, Wharton professor, Adam Cobb, insists that organizations have the far greater burden in building it. “When you are talking about loyalty in the workplace, you have to think about it as a reciprocal exchange.  My loyalty to the firm is contingent on my firm’s loyalty to me.”

My best advice to any leader reading this: go out of your way to make your employees feel that they belong.   Your operation will thrive if you do.  I’m absolutely certain of it.

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