Is Employee Loyalty and Longevity Really All It’s Cracked Up to Be?

Loyalty is a virtue until it stings you. If anything has changed more drastically in the last several decades, it’s the disappearance of employee and employer loyalty.

We can argue about who bears the responsibility for the change. Employers often argue that it started with collective bargaining and ended with them being so uncompetitive that loyalty was no longer an option. They also say that employees lack the patience to move up in the company and often one rejection will prompt them to search elsewhere.

Employees will argue that employers have been squeezing down wages and benefits for years (the most obvious being pension plans and other fixed benefits), that profit sharing is a farce, and that layoffs come too easily and hiring comes too slowly.

The more interesting question to me is if the concept of  “loyalty and longevity” is really all it’s cracked up to be?

The argument for longevity

I was reading a story on CNN about people who have spent their entire career with one company:

Sometimes workers develop right along with the company, forming a special bond. This was the case for Suzanne Schutz, who was the eleventh employee hired at Cold Stone Creamery headquarters in Scottsdale, Arizona, and is now vice president of marketing. “When I started, the brand was in its infancy. To be a part of an emerging brand is addictive. You see it grow as only an idea and then boom it takes off,” Schutz says.

Now that Cold Stone is more of a mature brand, Schutz says that she stays because, “I know how amazing the brand, franchise and products are, and how great we can become.”

I can’t imagine the actual dollar value of having a high-performing employee who knows the history, struggles, and successes of the organization so well. At a certain point, institutional knowledge becomes so second-nature that a person becomes nearly irreplaceable.

HR folks also know that the cost of turnover is high in general. I know in my own experience that even moving the dial on turnover a couple of percentage points gave us great savings. And, that was money we could put into other things — like training or competitive pay increases. It was a great cycle to be a part of as less turnover begets less turnover.

The last thing worth mentioning is if you have a great culture, longevity helps protect that culture from shifting. CEO’s and top execs who stay at a company for long periods of time have proven that year over year.

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If you look at Fortune‘s 100 best companies to work for lists, you’ll very rarely see a company that doesn’t have a long term leadership in place. Even for companies that have been around for only a short period of time, you’ll see that in most cases, the original founders and many of the key players are still in place.

The argument against longevity

It’s hard to argue against the overwhelming positives that longevity brings to a company. And for someone who is on their (gulp) fifth company in seven years, it may seem a little self-serving to try and do so. Still, there are some logical reasons why longevity may not be the best bet for all organizations.

For companies that need to change and adapt to new conditions, doing that with legacy staff can be difficult. While it isn’t impossible to overcome that, sometimes it is better to bring someone in who has experience outside of the company and has dealt with those kind of changes. Taking on a major change initiative with only the help of outside consultants can also spell disaster. Having a mix of legacy staff and newer staff can help ensure that moving forward, you’ll have the experience needed to make adjustments.

The other mistake I’ve seen companies make is longevity for longevity’s sake. While there are some serious savings to be had from reducing turnover and keeping people on long-term, there are also serious repercussions to keeping the wrong people around long-term. For instance, if you have an incompetent vice president that you are unwilling to move, at some point that turnover savings is going to be gone. We also have a funny way of underestimating just how much having the wrong person in the wrong job is really costing, too.

What’s your take?

I’m interested in hearing your experiences with this. I’ve been with employers that have routinely had 20-30 year employees and others where 100 percent plus turnover was the norm. There are positives and negatives to both, but if I were the business owner, I’d definitely lean towards longevity.

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5 Comments on “Is Employee Loyalty and Longevity Really All It’s Cracked Up to Be?

  1. Although it softened post the dot.com demise, and possibly a little more in this latest burst, the rub is the fact that those who recruit and hire question “job hopping,” regardless of the legitimate reasons why movement was frequent and the positive references given from previous employers.

    We equate longevity with sound talent and talent management practices, and that’s a mistake. If performance was marginal, both with the employee and the firm he or she worked for, then that actually was a detrimental to the business.

    Individual and business performance must be the critical indictors of whether or not loyalty and longevity are important.

    1. Business performance should always be the paramount concern and I think it likely comes down to how you measure the influence of culture on performance. That’s always my hang up on relying solely on employee longevity or loyalty.

  2. Sustainable Success Requires Lower Turnover: If you want to be successful, long-term, you need low turnover. Low turnover fosters a culture of creativity, trust and positive attitudes. In contrast, high turnover results in a culture that attracts and retains only individuals interested in “what’s in it for me” – “what can I get out of my short time with this company”.

    Hire Right: Too many employers, possibly due to the widening gap of loyalty, hire easily and fire quickly as a result. The problem can often be traced to poor hiring practices. Some of the best companies to work for – and those with the most sustainable success – have very long and in depth hiring practices. Think Google, for example. If you have someone that’s not growing with the company, it may be less to do with a problem in your dedication to longevity and more to do with poor hiring and development practices.

    As one who’s worked with a company that turned over departments 3x in 2 years and one who has seen how servant leadership drives sustainable success in low turnover environments, I believe there is great value in loyalty and tenure. The challenge is ensuring that longevity and tenure is fed by great hiring and development practices.

    Great points Lance – thank you for sharing!

  3. Great article, Lance. Tracking optimal productivity is a good way to keep this in check – just because a person has been in a job for 10 years doesn’t mean they’re still the most effective/productive at doing so.

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