Employee Loyalty: Ultimate Guide for Employers in 2022

Home » Resources » Employee LoyaltyUpdated: July 19, 2022

You found our ultimate guide to employee loyalty.

Employee loyalty refers to the notion that the employees in a firm have a genuine interest in their positions and remain committed because they trust the company’s work and desire to see its growth. Loyalty is one of the most sought-after attributes in the workplace, as it demonstrates actual love and support for the company and reduces employee turnover.

Boosting loyalty is a staff retention strategy and an employee engagement best practice. This commitment is similar to company pride, and a side effect of creating a positive work culture.

This article contains:

  • types of employee loyalty
  • importance of employee loyalty
  • factors affecting employee loyalty
  • employee loyalty program ideas
  • examples of employee loyalty
  • how to increase employee loyalty
  • how to measure employee loyalty

Let’s get started!

The importance of employee loyalty

The value of employee loyalty is even more relevant than ever. Employers are looking for long-term staff to help them grow in the present unpredictable economic climate. In difficult circumstances, an employee’s loyalty provides the much-needed sense of security that allows companies to persevere. Firms need not just qualified but also loyal staff, particularly when facing challenging circumstances.

Even in large corporations, it is becoming more difficult to find dedicated employees. Workplaces are finally realizing that employees are more productive when the company acknowledges their needs instead of ignoring them. Therefore, workers who do not feel treated fairly are less inclined to commit to their positions.

You might assume that smaller firms would struggle with employee loyalty since they cannot compete with their bigger rivals in terms of pay, bonuses, or sense of professionalism. On the other hand, small firms might have some of the most devoted employees in their industry. The situation applies, even if the company’s best workers may easily find better-paying work elsewhere. Therefore, with the right strategies and management style, working with you will be one of the most fulfilling experiences of the employee’s life.

The more loyal your workers are, the more likely they will stay and work harder for your company. When it comes to recruiting and training new personnel, a small firm cannot afford to waste too much time and resources. A high employee turnover is also bad for your business’s image.

For more insight, check out this list of job satisfaction statistics.

Factors affecting employee loyalty

Many factors contribute to an employee’s decision to quit their employer. Companies experiencing a high turnover rate need to investigate the reason. Exit interviews can work for determining turnover reasons. When an employee submits a letter of resignation, politely request that they explain their decision to leave. If a pattern emerges, address it as quickly as possible to avoid a domino effect.

Typical reasons employees quit their company workforce include:

  • Low-paying positions
  • Lack of challenge at work
  • Fewer career advancement opportunities
  • Lack of passion for the work
  • No work-life balance
  • Poor manager-employee relationship
  • A lack of clear direction
  • No employee recognition

There is no one-size-fits-all method for determining employee loyalty in the workplace. However, there are few characteristics or examples of employee loyalty loyal workers that you can easily identify. Loyal employees are punctual, do their job well, and contribute to the company’s culture. There are, nevertheless, a few traits that distinguish a devoted employee from the others, including:

  • Speaking up whenever they have differing opinions on situations
  • Treating you more like a friend than a boss
  • Giving notification in advance of their intention to leave
  • Avoiding public criticism of your actions
  • Engaging in company advocacy
  • Accepting the management’s decision

Loyal employees commit to the success of your company. Instead of concentrating on their daily tasks, these employees notice the broad picture of your company’s mission. As a result, they are more likely to take advantage of professional advancement chances or to improve their output. A dedicated employee discusses ideas and provides honest feedback on their own work experience to improve your company.

There are also limits for loyal workers. Loyalty does not mean employees will give up their health, hobbies, or family time to work for you. Loyal employees can be productive employees who take advantage of vacation and sick leave.

How to boost employee loyalty

Employee loyalty in your company will not improve suddenly. Like a long-term connection with a donor or customer, you should nurture loyalty with time and effort. The definition and manifestation of employee loyalty will differ from one company to another. Loyalty is a difficult concept to describe and quantify, but there are steps you can do to encourage employee loyalty inside your company.

Unfortunately, most firms’ attempts to instill a genuine sense of devotion in their workers fall short of goals. Many managers often get caught up attempting to ‘correct’ bad conduct among their staff. However, this approach does not always yield results. Your effort should be bringing out the best in your employees. If the approach is not working, focus on the changes you can make.

An important point is realizing that you do not influence your employees’ feelings about their employment or your business. The only duty is to establish a work atmosphere that fosters a sense of belonging, productivity, and loyalty among your colleagues. The section below provides tips on how to increase employee loyalty.

1. Initiate an employee recognition program

According to Apollo Technical study on employee recognition, employees who get recognition for their job performance are 63% more likely to remain in their present position for another three to six months. Therefore, to keep your staff happy and productive, you need to recognize them often and thoughtfully, as it will make them more loyal. Some of the ways to handle employee recognition programs include:

  • Create an incentive scheme, motivating individuals or teams to reach particular targets to win a prize, like a gift card or an additional day of PTO.
  • Give a handwritten message to staff members that go above and above.
  • Provide special mention to standout employees in workplace meetings or newsletters.
  • Choose employees of the month and provide benefits, such as a reserved parking place
  • Invite outstanding teams to parties or host special lunches or dinners

There is no need to spend a fortune on employee recognition or appreciation. The purpose of employee recognition is to help employees see how much the company values their input. Regardless of your budget, you should include recognition in your employee loyalty program ideas. According to a study by the American Psychological Association, employees who feel appreciated are more likely to put forth their best effort.

Check out more employee recognition ideas and read about the importance of employee recognition.

2. Clarify your business goals

Clarity is one of the most important characteristics of an entrepreneur. Each employee’s objective, duties, and short-term goals must be crystal apparent to the business owner. This attitude demonstrates to workers that your actions are logical and that you are optimistic about the future. Also, a lack of vision is a frequent cause of company failure.

Your workers will constantly question your judgments and your motive for beginning a business if you do not have a clear vision for the company’s future. If employees have no idea where the business is heading, they will hardly see themselves working for a firm in the long term.

3. Provide the best equipment to complete tasks

Your employees should have the most up-to-date equipment for the job. If an employee recommends using Slack or Trello to improve communication and project management in the office, then you could implement their suggestions. Trying out the worker’s suggestions shows your workforce that you value their suggestions for improving their work situation and ultimately earn you their loyalty.

Providing some of the finest tools for your staff may entail investments in technology or other resources. It is also important to remember that acquiring new tools and equipment such as new computer displays or desk chairs may positively impact morale.

Here are lists of helpful software for work.

4. Talk about retention openly

Your commitment to retaining employees does not have to be obscure. In fact, telling your workers that you want them to stay on board might aid your retention efforts. This approach will make employees feel appreciated and encourage you and your staff to discuss how you can improve your working relationship openly.

One-on-one sessions between managers and their direct subordinates are ideal for addressing employee retention. During discussions about retention, managers can find out what employees like or dislike about their job, work perspectives and whether they feel the role provides professional advancement or development opportunities.

These inquiries may help you stop possible employee turnover before it happens. Retention surveys can help you glean new workers’ initial views of your company, the reasons star employees stay, and why employees leave. This information can help you develop a plan for nurturing employee loyalty.

5. Show employees you care

Employees’ commitment rises when they have a stronger sense of belonging to the organization and its leader, according to research published by Ivey Business Journal. Showing your workers that you care about them on a personal level is a terrific method to develop this relationship. Some examples include celebrations, field trips, and bonuses. When you meet with employees, try to get a sense of their goals and the hurdles they face. These workers are now part of your vision. You will get employees’ loyalty and persistence if you help them develop and care for their happiness.

6. Ensure openness and honesty

Workers may not talk about their feelings, while friends do so freely. If you keep your staff in the loop, they will feel more connected to you. Your employees will welcome and appreciate any form of openness and honesty, even if the information is negative or trivial. By initiating communication, you can encourage workers to speak with one other more regularly. As a result, your workforce will be more cohesive as a group, increasing retention.

Here is a list of books about effective communication.

7. Treat employees with respect and dignity

During times of high stress for the business, it is simple to overlook politeness and courtesy. However, regardless of the conditions, remember that your team is just like any other group of people. Misunderstandings, confusion, and frustrations are bound to happen in the workplace. You may, however, get over these rough patches considerably faster if you instill a sense of respect and decency in your company’s culture. Even in adversity, your staff will not want to leave a leader that treats them as individuals, not “workers.”

8. Avoid showing favoritism

Every manager has favorites among employees. However, giving such employees special treatment can quickly kill loyalty in other employees. Certain workers indeed have a greater impact on a business. However, your focus should be on motivating your staff to attain this level of success. Only by demonstrating your equal regard for them will you be able to achieve this goal.

9. Celebrate the company’s achievements

Acknowledging company-wide successes is just as important as recognizing employees’ accomplishments. A company’s achievements come from each team member putting in an effort. It will be harder to meet your objectives if one team member is not playing their part. Therefore, when the team achieves its objectives, it shows that every worker contributed.

You indicate that you appreciate the rarity and value of a well-functioning system by celebrating company-wide accomplishments. Your team will also come to understand that they possess the necessary resources to be successful.

10. Help your team complete tasks

Too many managers and corporate executives keep their distance from their staff. Managers often spend much of their hours cooped up in their desks or attending meetings. This situation undermines openness and distances you from the day-to-day activities of your staff. Therefore, workers will be less responsive to critical feedback. It is hard to appraise an employee’s performance if you do not know how hard their work is.

When team members believe they contribute to the company’s mission, they feel more connected. In certain cases, it may be making difficult phone calls to customers and pursuing unpaid invoices with insurance companies. It is easier for your employees to put forth their best effort if they see you doing the same.

This act is one of the signs of a good manager.

11. Provide more freedom to workers

There are usually more regulations with larger firms. Employees have to dress in a certain manner, sit in a specific location, or adhere to a general code of conduct. This situation makes employees afraid to be themselves among coworkers. The rules may be minor irritants to some employees and deal-breaker for others. Such employees will find it hard to achieve their full potential in situations limiting their freedom.

Smaller firms often win when it comes to dress codes, working from home, and a more open and welcoming workplace. Employees get a greater latitude to mingle and form close personal relationships. These benefits are highly enticing to employees who do not work in fascinating sectors.

12. Get feedback and opinions from employees

Employees who work in small organizations tend to have more responsibilities. These workers directly affect the company’s performance since they work directly with the manager. However, lower-level workers have less impact in large corporations because of the long chain of command. Therefore, many workers choose to remain with small firms because they believe their input is valuable. You should show your staff that you respect their input. This step will make employees feel as if they are in charge of the organization and share in your leadership responsibilities.

How to measure employee loyalty

Company loyalty, defined as an employee’s commitment to the institution, is difficult to quantify. With the rise of the gig economy and zero-hour contracts, developing and assessing loyalty programs is challenging. Loyalty systems are still vital, but the implementation has changed. Also, it is possible to reduce staff turnover and increase productivity by measuring loyalty. Some of the ways to measure employee loyalty include:

1. Awards and surveys

Many company awards measure employee loyalty. Although you will have to come up with the award submission, the questions will help you think through your employee loyalty programs and measurements. Some awards may even perform company surveys.

For instance, the Great Place to Work award conducts a trust index poll on the company’s behalf as part of the award. The survey includes 58 statements, all of which pertain to the workers’ experience in their work environment. The award also has benchmarking to compare your company’s culture to other organizations. Ultimately, the surveys provide a deeper understanding of your staff and loyalty level.

2. Net Promoter Score (NPS)

Your net promoter score, which ranges from -100 to +100, reveals how keen your workers are to spread the word about your business. On an 11-point scale, you ask your workers whether they would recommend you to a friend or colleague. In the end, your outcomes will show you different types of employee loyalty, including if your staff are promoters, passives, or detractors. If you are looking to get a sense of how loyal your employees are, NPS may help.

3. Workplace engagement

Employee engagement is a fast way to measure loyalty, although it is not fully effective. You can find out if every worker participates in company hangouts. If not, you can use this as a fast way to measure loyalty. It may be a significant red flag if employees do not participate in even the most minimal workplace events.

In the end, you must pay attention to the data after performing surveys and schemes. You should consider changing the culture of your organization’s loyalty programs using the information.

Conclusion

Employee loyalty is one of the best indicators of employee engagement and shows the firm that it has a committed workforce. As a result, employers have a duty to do all they can to preserve this standard among their employees. While employees can learn competence, loyalty is a trait that only develops with time. You should commit energy to the process and be patient. It will not be long until you have a group of loyal colleagues eager to help you succeed.

For more guidance, check out these books on company culture and employee experience.

We also have a guide to company core values and a guide to company culture committees.

FAQ: Employee loyalty

Here are some frequently asked questions about employee loyalty

What is employee loyalty?

Employee loyalty refers to the notion that the employees in a firm are interested in their positions and remain committed because they trust the company’s work and desire to see its growth.

Why is employee loyalty important?

Employee loyalty is important because it reduces the rate of employee turnover and boosts productivity and engagement at work.

How do you earn employee loyalty?

You can earn employee loyalty by practicing openness and honesty, recognizing employees, and showing your employees that you value their opinions.

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Author: Grace He

Grace is the Director of People & Culture at TeamBuilding. She studied Industrial and Labor Relations at Cornell University, Information Science at East China Normal University and earned an MBA at Washington State University.

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