4 Steps to Build Loyalty among Employees

Loyalty is dead.

That used to be a question in the workplace. Now, it’s a statement and almost no one argues it.

Only retiring IBM employees – or more likely, the children of already-retired IBM employees – remember the good old days when you signed up for a company and expected it was going to be a lifetime contract.

The employer would train you, promote you, re-train you when necessary and take care of you like you were part of the family. In return, the employee would focus on company goals, work hard at achieving them and, in good times or bad, be loyal to the organization.

That kind of marriage doesn’t exist much anymore.

The perception today is that the employer provides a job opportunity, training, a paycheck and then says: We’re even. In return, that worker cashes the checks, but keeps an eye open for better opportunities.  His position: I’m even, too.

As hostile as that sounds, it’s not necessarily a bad thing. It’s a change in perspective. Just as time and technology have changed the workplace, so have the goals and expectations of the people working there. Not everyone is cut out to work 20 to 25 years in the same place.

A 2012 MetLife survey shows 42 percent of the employees felt a strong sense of loyalty to their employer. That’s the lowest that employee loyalty had dropped over the last 7 years. Conversely, the same poll found 59 percent of the employers felt a strong sense of loyalty to employees — a 7-year high.

Same question, vastly different answers. Something is off track.

Most people think owners have the best shot at getting loyalty back on track. They might start by answering this question: How important is loyalty?

Best answer: Loyalty among employees reduces turnover.

The cost of replacing employees, especially those in managerial positions, is high and it’s getting higher. The latest estimates show that you can replace low-level workers for about 50 percent of their salary. Replacing management level employees will cost you 150 percent of their salaries. If they are high-level IT professionals, it could jump to 200 percent of their salary, after you figure in time and production lost. That’s a lot of waste.

So how do business owners build loyalty among employees?

1. Start by developing a relationship with your employees. Many of them likely see you as “The Boss” — a mythical figure with all the knowledge, power and benefits of being in charge, while employees do all the work.

That’s not the case at my company.

The employees organized a kickball game and both owners showed up in shorts, sneakers and T-shirts. They played the field, ran the bases and worried about the final score, just like everybody else. When the game ended, they invited everyone to a nearby bar for a beer and something to eat.

Everyone noticed. That’s relationship building.

2. Another way to build loyalty: Be honest, especially when it comes to salaries and benefits.  Pay the competitive rate. People know what their peers are making. If I’m making the same money as the competition, why would I leave? I’m more likely to stay and be loyal.

Don’t cheat your customers. Employees want to be proud of the product or service they deliver. Don’t make them cut corners. Their name is on the end product right next to the company name. Customers know when the company and its employees have put out their best effort.

3. Up next: Recognition. It’s often overlooked, though not by employees. Every word of praise, every bonus or bump in pay and every time you point out something positive makes a difference. It validates the work employees do and builds loyalty.

4. Finally, if at all possible, avoid layoffs. There is no clean way to do it. When good workers are let go, it spreads a toxic poison across the company. Don’t contaminate your workplace.

Think back to when every airline in the industry was laying off employees and Southwest Airlines said no, they’d bite the bullet and keep everyone.

Think that fostered any loyalty among Southwest’s 46,000 employees?

It is hard, but it’s not impossible. Be like Southwest. Give them a reason to stay and keep loyalty alive.

Bill Fay is a writer for Debt.org, America’s debt help organization.

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