As we continue our series on the Future of Work, we bring together all generations to discuss employee loyalty. In an economy that is wrought with so much instability, workforce disengagement is at its highest levels at 70%, and companies are finding it increasingly difficult to retain top talent. Disengaged workers cost the economy $300 billion or more per year. This on top of a time where industry is witnessing record layoffs and unemployment. Does loyalty currently exists within the workplace and what needs to be done to nurture it if companies are to succeed?
Recent statistics from CareerBuilder/USA Today:
- 56% of HR managers are worried that their top talent will leave for another job within the year.
- 75% of people who willingly leave their jobs don’t quit their jobs; they quit their bosses
- The presence of a corporate incentive program motivated 66% of employees to stay at their job.
- 41% of customers are loyal to a brand or company because they consistently notice a positive employee attitude
- on the other side 68% of customers defect from a brand or company because of negative employee attitude
- A 5% increase in employee retention can generate a 25% to 85% increase in profitability – that means reduced training time and costs, increased productivity
- Only 40% of employees are well informed of their company’s goals, strategy, and tactics.
Let’s not forget the employee motivation statistics with respect to engagement:
- Companies that actively engage workers profit more than those that don’t. If you look at Fortune’s “Best 100 Companies to Work For,” these organizations have averaged an amazing 200.6% return over the past decade.
- Organizations with higher than average levels of employee engagement realized 27% higher profits, 50% higher sales, 50% higher customer loyalty levels, and 38% above-average productivity.
Our panel included:
- Doug Haslam, an older GenX, works for digital and content Marketing consultancy
- Jewel Taylor, an older GenX, currently a stay-at-home Mom, formerly worked in supply chain and accounting
- John Graham, older Millennial, works in business intelligence for television shopping network
- Mary Ann Keeney, a young Millennial working in architectural and interior design
- Natalie Currie, an older GenX, entrepreneur in executive coaching as well as team coaching
- Steve Dodd, young Boomer, working in sales in the social media aggregation and search business
What makes you feel loyal to an employer? Have you ever drank the corporate Kool Aid?
Our panellists were pragmatic. Interestingly Millennials had an earlier “read” on loyalty in their young careers. GenXers and Boomers, earlier in their careers, had an idealistic view, which has substantially change as they’ve gained more experience.
- For GenXers, there has always been an intention to be at a company forever, especially in large enterprises. Having gone through multiple jobs in their careers, they realize that “forever” is no longer the case.
- For Millennials, they believe that company loyalty is “finite”. The company is only loyal to itself. They have seen people stay up to 3 years before they move on. As a result, the going-in intention is to expect not to stick around.
- For GenXers who have remained with company for 5+ years there is more of a “mutual benefit” as opposed to loyalty that is at play. Everyone agrees there must be growth, learning and opportunities to move to more challenging roles within the company.
- People are dedicated to the things they are good at until they are bored. It becomes less a question of loyalty because they may promote the companies they work for [to a degree]. Ultimately, employees need to be true to themselves.
- As Jewel noted, the Kool Aid starts to change its flavor over time. You need to get what you need from the company and always have an exit plan before the company has an exit plan for you.
- Those who are more cynical have felt the repercussions when they’ve invested all their time, energy and enthusiasm in contributing to a company’s growth only to have to rug pulled out from underneath them. As Doug, our GenXer, put it,
The 3-5 year thing is enforced, in my perspective. When there is a layoff, or there is another reason they don’t what you around, you realize your loyalty doesn’t mean anything if they’re not giving back to you.
John was adamant and said the company is NOT a person. He said:
How we (GenY) communicate, how we engage is different than the legacy structure. I’ve met the wall in hierarchy systems. Silos still exist. It’s counterintuitive for us to reach across social lines to accomplish things. When the company says one thing and the people executing it are not aligned, why should I believe in that?
How much is compensation a factor of loyalty?
Daniel Pink offered this interesting view of what motivates employees. When it comes to money his research indicated that it is a motivator. “Pay people enough to take the issue of money off the table.”
Our panellists agreed with this to a degree:
- Money is table stakes. However, it can only give you things that are momentary and unfulfilling.
- Compensation comes with the benefit of opportunity and development. While it can be a strong motivator, over time, people also develop friendships within the organization.
- Compensation does not beget complacency. Natalie, who had stayed at Johnson & Johnson for 13 years indicated the culture encouraged employees to be “actively swimming” to stay in the organization.
- It’s clear that people need to constantly prove themselves and step up their game to stay. While money is a motivator to be part of a company, “earning” every dollar means you can stay as long as you “keep” being good at what you do.
- Money is a necessity but it can come at a cost. John noted that you may have an entrepreneurial mind that requires the security of a large organization. However,
…when those two things clash [the nimbleness of entrepreneurship with the repeatable processes of the factory] then you are trading freedom for security.
- Money can be the motivator and inhibitor. Steve put it eloquently,
Money is a motivation to stay and leave. Once I’m gone, I’m gone… By the time I’ve made the decision to leave, my loyalty and commitment is to the place I’m going. There’s nothing the company can offer me to keep me. I’ve been on the other side [the company offers me money to stay] and the offer is there as long as they can keep you to replace you and boot you out the door.
“Loyalty is a False Promise”
With the recent news about Amazon and the “brutal” work environment the employees have to endure, it is no wonder why people begin to question the motivation of the executives of these billion dollar companies.
- In the telecom industry, companies go through a round of reshuffling annually. Revenues and profits are evaluated and resources are reallocated (or removed) as a result.
- It’s about the people not the company. While managers can be loyal to their employees, ultimately they will need to tow the company line.
- The biggest dilemma companies have currently is change. It’s inevitable. There is nothing the employees could have done to mitigate the disaster that is Blackberry.
- If managers can guarantee one thing it’s this:
Other than my commitment to help the company do what I can under the circumstances it is facing, the only commitment I have can make it is to the employee through coaching, managing, training and respecting and nurturing their abilities.
- Loyalty shouldn’t be an expectation. Not when it comes to holding down a long-term job in the same company.
“Initially when I went into a company and saw this huge wealth of opportunity, it was really this facade. You get to understand who you are as a person vs. what’s required for the business. I have seen opportunities that assembled teams of people across the organization. Those projects get pushed along until it impedes other people’s sand boxes.. that’s when situations become negative, projects are halted. You realize your limitations in trying to create change within a bureaucracy.”
- Changes today are happening at a faster rate. Layoffs happen as a result of market changes that companies are responding to. The world around is less stable than it was 30 years ago.
- Loyalty ultimately will be to individuals with whom you’ve worked. Whether inside or outside the organization, they become the network for new opportunities. The company itself has served its purpose
How do you keep employees loyal, at least to you, as a manager?
- Lead by inspiration, not by dictatorship.
- Respect the people and the contributions they are bringing to the organization.
- Give employees a stake in the outcome. Give them ownership and give credit where it’s due.
- Put the people first. Develop them in ways that are meaningful for them.
Find ways to take people outside what they are doing and comfortably stretch them into other areas.
It’s clear our panellists see rapid changes in the work environment today. There is no loyalty. There are no guarantees of long illustrious careers. Millennials going into the workforce have witnessed so much instability in their early careers that they’ve grown skeptical of big business.
For business, they are going through their own changes. They have to adapt to the changes that are happening in market and to the needs of their workforce if they want to mitigate their own disasters. As much as employees need to keep growing and adapting, businesses also need to stay relevant, build new models and the new way of working to not only survive, but to keep their most valued workforce.
You can listen or watch the Hangout in its entirety below:
Image source: keep calm