According to some studies, more than half of the employees in the average company are actively looking for other job opportunities. Due to these high numbers, a lot of companies end up losing around a third of their employees every year. These statistics might make it seem that employee loyalty is a thing of the past.
Hiring a replacement is time-consuming, often frustrating, and can cost around 20% of the average employee’s salary to replace that employee. Instilling employee loyalty in your company is well worth the time and effort to save the costs of recruitment.
But how can employee loyalty be improved? What can be done to create and keep loyalty in your staff?
Understand What Employee Loyalty Means
Employee loyalty is an umbrella term for a set of emotions that make employees feel attached to the current employer. Feeling this attachment makes your employees less likely to seek other opportunities and to see better options with other companies.
If you are going to increase employee loyalty, you must work to increaser the positive emotions and decrease the negative emotions that your employees might feel towards you and the company while they make a decision to stay with you or go elsewhere.
You must understand that you are dealing with root emotions, rather than the specific behaviours that those emotions can drive. This will keep you focused on what really matters.
Offer Competitive And Fair Compensation
Employees expect to be paid as much as they could earn doing the same job with another company, and they will feel devalued if they are paid less than this. Your employees will also expect to be paid as much as their peers who are doing the same work, regardless of whether those peers are better at negotiating higher salaries or pay rises.
The easiest way to establish competitive fairness is to publish everyone’s compensation in the same way that publicly-held companies publish executive compensation. Secrecy around salaries makes people think they are being treated unfairly.
As well as salaries, a benefits package can go a long way to foster loyalty. Make sure your annual leave allowance is competitive, and consider other benefits, from health insurance to a great Christmas party. Look at company swag ideas for smaller things you can give employees to show your appreciation for their hard work.
Hire More Referrals
Whenever possible, people like and will choose to business with, and refer business to, the people that they know, like, and trust.
An easy way to make sure that you have this connection between your employees is to create an employee referral program and referral bonuses. This will make it easier for employees to recommend their friends.
Ask your current employees to put forward people they know for any available positions that you have. If those candidates are successful, reward the person who referred them with a bonus. This saves on recruitment costs for you and brings in people who already have a reason to be loyal. A strong referral program can dramatically reduce employee turnover.
Give Employees More Control
At one stage, the key management concept was delegation. After that, the management buzzword became empowerment. Now, it has become engagement. All of these buzzwords essentially boil down to mean the same thing. Managers need to cede control to their employees.
Companies that have employees who are engaged, meaning that they feel empowered to make their decisions and take initiative instead of just waiting for instruction and following orders, have a much lower turnover rate than companies with unengaged employees.
The easiest way to make your employees feel more engaged is to give them more control over their own workdays. Allow them to set their own work hours and to decide if and when they would like to work remotely. This shows trust and will lead to more productive, happy employees who can arrange work around demands like childcare.
Remove Unnecessary Uncertainty
There is no question that the modern workplace contains more uncertainties than the average workplace in the past. The economy changes very rapidly and innovations in the market can constantly disrupt markets that were previously stable.
This pervasive uncertainty can create an environment of stress in the workplace. This can make your employees miserable, less productive, and more likely to seek another job.
Of course, no one company can do much to fix an uncertain economy, but a company can make work much more predictable simply by keeping its employees briefed and up to date. If change is imminent, make sure you give your team plenty of advance warning. Listen to their concerns, and do what you can to mitigate any worries about job security and company success.
Jettison The Jerks
It is difficult and even impossible for employees to feel a sense of loyalty to a company that tolerates individuals who make the workplace miserable and unpleasant for everybody else that has to work with them.
An abusive boss or unpleasant coworkers can greatly increase stress levels, and therefore turnover, even among parts of the team who aren’t immediate victims of the negative behaviour.
The most obvious solution it to take any reports if bullying or other nastiness very seriously. Transfer or terminate employees who consistently behave in an obnoxious or abusive way and who are unwilling to change their attitude and behaviour.
Publicize Your Talent Brand
Employees want to feel proud of their jobs and of the company that they work for. Companies who have impressive talent brands will find it easier to attract and retain talent.
Talent brands, like corporate and product brands, take time, effort and money to both build and maintain. There isn’t a shortcut.
If you have created a solid talent brand, you can get more mileage from it by bringing it front and centre on your website and PR materials.
By doing these things, you can increase your employee’s loyalty to your company and decrease turnover. This makes for a happier, more productive, and more successful workforce.