Employee Loyalty? No, It’s Not Dead – It Just Changed Hands

Employee loyalty is one of those topics that can divide a room.

Well, at least room full of HR Pros who live and breathe recruiting, retention and productivity. Some argue loyalty is long dead, thanks to corporate actions begun in the 1970s and ’80s. Others believe loyalty is alive and well, but to fellow colleagues and managers, not to the organization per se.

Regardless of your position, employee loyalty can have a profound impact on organization culture and business results, not to mention individual employee engagement, performance and productivity.

It’s the interpersonal connection that is in jeopardy

This report out of Knowledge@Wharton is one of the best I’ve seen for hashing through the great majority of arguments around employee loyalty. In the article, James Harter, chief scientist, workplace management and well-being, for Gallup takes this position:

“Human nature, Harter adds, ‘doesn’t change when the economy changes. It might take on a different dynamic’ during a recession, but what remains constant is ‘the need to be connected — to a manager, a co-worker and/or a purpose, and also the need to be recognized… There is something about having a mentor, or someone in your life who helps you see the future in the midst of chaos, that can make a difference.’”

It’s that interpersonal connection that matters. And it’s that interpersonal connection that’s in jeopardy.

According to the Spring 2012 Globoforce Mood Tracker™ survey, recognition programs are on the rise. Yet, more than 50 percent would still leave their jobs for a company that clearly recognized employees for their efforts.

Article Continues Below

Why you want to retain good workers

I’ll be leading an interactive webinar about the results of the latest Mood Tracker survey, including a discussion about why a strategic, frequent approach to recognition is essential to a more productive, motivated, and engaged workforce.

Along with my colleague, Thad Peterson, we’ll reveal survey findings, including the top three benefits of recognition done right:

  • Higher retention: 89 percent.
  • Higher motivation levels: 82 percent.
  • Higher job satisfaction: 81 percent.

Why does getting this right matter? As the Knowledge@Wharton report reference above points out:

Perhaps the most compelling argument for trying to retain good workers is that replacing managerial and professional employees can cost approximately 150 percent of their annual salary, according to various estimates. Harter suggests that for frontline, lower end workers, it costs about half of their salaries, while for high-level IT professionals, the figure could be as high as 200 percent.”

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their company culture. As the Vice President of Client Strategy and Consulting at Globoforce, Derek helps clients — including some of world’s most admired companies such as Proctor and Gamble, Intuit, KPMG, and Thomson Reuters — leverage recognition strategies and best practices to better manage company culture, elevate employee engagement, increase retention, and improve the bottom line. He's also a renowned speaker and co-author of Winning with a Culture of Recognition. Contact him at irvine@globoforce.com.


5 Comments on “Employee Loyalty? No, It’s Not Dead – It Just Changed Hands

  1. Derek, great piece. My own work also suggests that recognition is a top driver of employee engagement and loyalty (along with Growth and Trust). Although formal recognition and gift programs are nice, hopefully managers/leaders will realize that taking the time to ask team members for their opinions, taking an interest in their career, and just saying thank you will go a long way to achieving recognition goals.

    – Kevin Kruse
    Author, Employee Engagement 2.0

    1. How much do you think the way we need managers/leaders to “realize” what you talk about is because of the way you generally get to be management in our culture.  You succeed as a “do-er” and move up to manage other do-ers.

      What if our culture were aligned to the idea that “Management” is a skill set, that you could/should train in before being given the position.  I believe this is how it works in the Star Trek universe, there is a Command division and technical divisions.  If we insisted people train in management skills BEFORE they become managers, would the picture look different?  Would those ill-suited to the job self-select out of training?

      1.  ENJOY, I think you hit it right on. Right now we have usually have “managers of tasks” rather than “leaders of people”. A great sales person gets promoted to sales manager, based on sales skills, not leadership skills. Makes no sense.

  2. This is the great 21st century challenge for HR, management, and anyone concerned with the long term viability of the enterprise:

    The latest studies show that the job that an employee is hired to do only lasts 2 years (not to mention the average “career” at a given company rarely lasts longer than 3.5 years). Most employees could not care less if the place is still around 10 years from now… much less 50 years from now.

    With corporations now treating employees like disposable Kleenex — even while the employees are continually watching for an opportunity to leave for greener pastures — the prospects for the long term survival of the 21st century corporation do not look good.

Leave a Comment

Your email address will not be published. Required fields are marked *