Are your employees loyal? If not, some of your best talent is planning to jump ship as you read this.
If they are loyal, you’re tapping into an unmatched wellspring of creativity and productivity. One that has the potential to see your organization pursue its mission at a breathtaking pace.
But employee loyalty has almost nothing to do with compensation, perks or company picnics. You and the other leaders in your organization can shape that loyalty if you know how.
Before we can address that, though, let me give you a quick rundown of what employee loyalty actually is.
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What employee loyalty is (and what it isn’t)
At its core, employee loyalty is your employees’ desire to stick around and see your organization succeed. Loyal employees will even reject better offers from your competitors.
Employee loyalty falls into two categories: Behavioural and attitudinal.
Behavioural loyalty shows up in how employees behave. Putting in extra hours to finish an important project could be a sign of loyalty. But it’s also evident in subtler ways. For example, an employee who stays for several years may have turned down other offers.
Attitudinal loyalty is how your employees feel about the organization. Team camaraderie, where teams pull together to overcome obstacles, is a highly visible sign. But again, there are many silent examples, such as a sense of connection to the organization’s values, that won’t be immediately apparent.
However, there are two essential things to remember. One, as I already mentioned, not all behaviours or attitudes will be obvious. But a lack of overt loyalty signals doesn’t necessarily mean you have disloyal employees. You may not realize the last top performer you hired was encouraged to apply by another highly loyal employee.
And, two, the opposite is also true. Obvious loyalty signals can be a sign of high loyalty, or they can be a fear of reprisal. Does your team espouse organizational values because they connect with them, or because they’re afraid of what will happen if they don’t?
It’s important not to confuse compliance or even retention with actual loyalty. There’s no single metric that guarantees loyalty. That’s why knowing how to measure employee loyalty is so important. But, before we can get into that, we also need to talk about why employee loyalty even matters.
Here’s why employee loyalty matters
What sets loyal employees apart from the rest? Well, it turns out a lot of things. Loyal employees are beneficial for your organization, across the board.
Loyal employees show up, work hard and do it with a positive attitude. This spills over into customer interactions, which, incidentally, improves customer loyalty. And I shouldn’t have to tell you that happy, loyal customers are good for the bottom line.
Loyal employees also stay with your organization through thick and thin. And are less likely to abuse vacation or sick days, steal from the company, or engage in careless behaviour.
When employees aren’t loyal, you might not know it, but you’ll feel it. They won’t be performing like you feel they should. They won’t be contributing as much. It will feel like they’re doing the bare minimum.
That feels awful as a manager, because it feels like you’re trapped on a desert island and you’re the only person trying to escape.
On top of that, companies with more loyal employees save significant money on voluntary turnover. It’s estimated that, on average, each lost employee costs your company around 33% of their annual base pay to replace.
With so much at stake, you’re probably wondering just how to measure employee loyalty. Let’s explore that now.
How to measure employee loyalty
Even though employee loyalty is difficult to see anecdotally, it’s surprisingly easy to measure. However, to do this accurately, you need to measure three different sources.
Look at the data
Your organization has a lot of data that gives you a big-picture view of employee loyalty. Turnover, absenteeism, the ratio of positions filled by internal hires—the list goes on. If it relates to people either engaging or disengaging with your organization, it can help tell the story. Just remember that these are lagging indicators; they’re good at telling you there’s a problem, less so at predicting one.
Listen to your people
Whether your people are loyal or not, they’ll find ways of telling you, as long as you’ve got ways of listening. Having conversations with your people is how you do that. Exit interviews can give you a good sense of where improvement is needed. Stay interviews (where you talk to employees about their connection to the organization) can tell you what you’re doing right. The important thing is to build feedback mechanisms and take the feedback seriously.
Watch the behaviours
Actions speak louder than words. If your people are telling you that they love working at your organization, but your turnover is sky high, you’ve got a problem.
A high degree of overlap between what your employees are saying and what they’re doing indicates higher loyalty. Their words match their actions because they trust you.
Of course, this one tends to go only one way. You’ll rarely, if ever, have employees who tell you that they hate working at your company, but then put in their best work.
Once you start measuring employee loyalty, you’ll feel an overwhelming urge to tackle things right away, but that’s not always the best option. Regardless of high or low employee loyalty, here’s what you need to focus on.
Your plan for employee loyalty
You’ve looked at the data, listened to feedback, and seen the behaviours. And, gasp, employee loyalty isn’t where you thought it was. What do you do?
First, I want to caution you against jumping in with both feet. Right now, you have a graph with only one data point. That can only tell you where you are, not where you are going.
More importantly, sudden changes to the workplace environment don’t usually improve employee loyalty. I’m sure you’ve been in an office where management suddenly decided to make a sweeping change. What did that do for morale?
And it doesn’t have to be a complete reorg either. I’ve seen employee morale crater because a new piece of software was poorly implemented.
Instead of trying to turn the ship around overnight, take a more subtle approach. One of the best ways to improve employee loyalty is through self-improvement. Let me explain.
Loyalty is synonymous with leadership. And leadership is, above all else, about building trusting relationships with our people.
If that sounds a bit too metaphysical for you, I’ve built a framework that touches on the five key aspects that bond employees to their teams, organizations, and leaders—it’s called DRIVE. Drive stands for Direction, Resources, Input, Visibility and Engagement. If you want a better understanding of how that works, download my free guide. Daily efforts to develop each of those five areas will have a lasting positive impact on the loyalty your employees feel for you and your organization.
And that’s what you’re going to find. People don’t really feel loyal to your organization. True loyalty always grows between people. Look at military units, the strongest ties of loyalty are always between the individuals in them; the same goes for your team.
If you’re still unsure how loyal your team really is, or how to strengthen that loyalty, I can help you uncover where that connection is breaking down. Book a free strategy call, and let’s map it out together.
