Making Leadership Visible.

Employee Loyalty … Who Calls It?

by tom on March 8th, 2012

As kids, on those occasions where 3 to 4 of us knew you were taking a car trip somewhere, one or all would yell out “I call shotgun” ! The negotiation the followed saved the driver from deciding. In the workplace, however, the driver decides who gets and stays in the car (or, in Jim Collins’ view, who gets on the bus).

National studies have shown that one-third of all employees … good employees … are actively looking for their next job. Further documentation reveals that typical cost for rehiring replacements is 35% to 50% for hourly workers and as high as 125% for professionals. Besides the expense, but not only are these valuable employee resources lost, but newer employees generally don’t have the same rapport with vendors and customers; and they aren’t as familiar with all the ins and outs of the company. And when problems arise, experienced and knowledgeable employees are going to be a much bigger help than someone who just started six months ago.

It has been said that people take a job for money, but leave for more recognition. The mistake that some firms make is linking recognition to prizes, trips and trophies. Much more significant to employee loyalty is the culture of the company that has been crafted by the senior leadership team. For example, do you think Southwest Airlines, SAS or Apple have employee loyalty issues? Of course, they have turnover as people may outgrow their positions … but that’s a natural evolving of business evolution and personal career choices. In those cultures there is not a one-third of the “student body” wanting to escape.

Actually, loyalty is not dead, thank goodness. In fact, we are naturally attracted to loyalty by our innate human desire for belonging and affiliation. So the key ingredients for loyalty is genuine attention by company leadership to honoring employee contributions … and relating those stories of achievement to the greater purpose, values and vision of the organization.

Q: Loyalty … who calls it?

A: The company CEO and senior leadership!

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