Loyalty Resurrection

Bruce L. Katcher, Ph.D.

SPECIAL ANNOUNCEMENT: Every two years, as a service the HR community, we conduct “A Survey of HR Professionals For HR Professionals.” We are currently conducting the 2006 study. It asks how HR professionals feel about their jobs, their pay, their benefits, and their future. (HR professionals can visit http://www.discoverysurveys.com/hrsurvey.html to take the survey and view the current up-to-the minute results.)

4 out of every 10 employees don’t feel committed to their organization.

I have a friend who owns a small, second-generation family-owned auto parts distributorship. He employs about 30 people. His employees receive orders from customers, order parts from suppliers, make deliveries, and keep the books straight. It’s not glamorous work and doesn’t provide the same level of pay or benefits that some of his workers might earn if they were able to land a job with a larger company.

You would think that employee turnover would be high. But it’s not. My friend rarely loses employees. The average tenure is more than 15 years. Why?

Carrying on the tradition of his father, he deals with them fairly and maintains his loyalty to them. He provides health insurance and a 401(k) plan. If an employee has a personal or financial problem he helps them out. If the company has an off year, nobody loses their job. If business is slow, he takes home less pay himself and makes certain his workers receive their checks on time. He treats them with respect and gets to know them as people, not just as employees.

But this is not what it’s like in most organizations. Employees are disloyal to their organizations and organizations are disloyal to their long-service employees. It’s become the way of the world. You hear about it every day. Here are a few recent examples:

• Loyalty is an outmoded idea, no longer relevant.
• The only thing that really matters in the work world is money.
• Maintaining loyalty to your employer is a foolish career strategy.
• Maintaining loyalty to your employees is impractical in today’s economy.

THE PROBLEM

Call me old fashioned, but please indulge me for a moment. Let’s revisit some of the thoughts employees maintained about loyalty years ago. Are these mere relics of the past or can they still have some validity?

• If I am loyal to my company, my company will be loyal to me.

• I want my company to be an extension of who I am, just like my family.

• I want to look back on my career and feel good about the many years I devoted to this company.

• I value the people I work with; money is secondary.

• I really believe in what this organization stands for and will stick with it through thick and thin.

Now let’s revisit some of the thoughts employers used to have about maintaining loyalty to their employees. Can these still be relevant today?

• If we are loyal to our employees, they will be loyal to us.

• We want to be one big happy family here where everyone is focused on the same goal.

• We value long service and will handsomely reward those who stay with us. We will also provide good retirement benefits for those who maintain their loyalty to us.

• Employees are our most valuable assets.

• We have invested a lot in orienting and training our employees. They possess a great deal of valuable knowledge about our history, our customers, our products and our services. We need to keep them with us to capitalize on our investment.

If these views still resonate with you and your organization, here is what you can do.

WHAT TO DO

1. Fight Rather than Succumb to the Prevailing Trend

   Become a maverick in your industry. Make it known that contrary to other employers, you do value loyalty from your employees and will reciprocate. Offer a pension. Offer generous benefits. Even consider offering long-term employment contracts. Dare to be different because you know it’s the right thing to do.

2. Rethink the Economics

   You may be wondering how you can possibly afford to do this. It may not seem practical, but it just might be possible.

   • The cost of employee turnover is very high. Finding replacements and training new hires is expensive.

   • Operating a company where employees are constantly looking to bolt, lowers employee morale and productivity.

   • Your employees might also be willing to receive less pay if they value the benefits, pension, and other guarantees. This is not uncommon. Just ask those who work in many government and public education jobs.

3. Make Loyalty-to-Employees a Core Value in Your Organization

   Rarely do you see “Loyalty-to-Employees” in an organization’s list of corporate values. If you believe it is important, it should be there. All strategic decisions of the company should be made with this core value in mind.

4. Be Willing to Make Sacrifices to Maintain Employee Loyalty

   In order to maintain employee loyalty you may need to make sacrifices such as:

   • Slowing down corporate growth to a more controlled level;
   • Placing limits on annual pay increases;
   • In-sourcing rather than outsourcing work; and
   • Investing in retraining of employees.

   CONCLUSION

   Loyalty to employees has indeed become a forgotten relic in much of the work world. It doesn’t have to be that way.

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