During the past two decades of consulting to a diverse range of businesses I have on a few occasions worked with clients that had an annual staff attrition rate of over 67%. This is when you know that something is terribly wrong with staff morale, and is invariably due to a number of different factors. These can start at the top with a poor company culture which filters downwards through the management hierarchy, or poor recruitment processes, insufficient training and direction, inadequate compensation levels and much moe.
According to studies, more than half (55%) of employees in the average company are searching for other job opportunities. And not surprisingly, many companies lose around a third of their employee base every year. With numbers like that, employee loyalty can feel like a thing of the past.
And beyond the pain of hiring replacements, it costs around 20% to 25% of an average employee’s salary to replace that employee, according to a recent study. Clearly, instilling loyalty in your employees is worth it.
But, how do you do that? Here are seven steps that you can take today to create and increase employee loyalty:
1. Understanding What ‘Employee Loyalty’ Means
Employee loyalty is an umbrella term for a set of emotions that make employees feel attached to their current employer and less likely to see greener grass elsewhere.
To increase employee loyalty, you must increase the positive emotions and decrease the negative emotions that your employees feel as they make a decision to stay or go.
Understanding that you’re dealing with root emotions, rather than the specific behaviour those emotions drive, will keep you focused on what really matters.
2. Offer Competitive and Fair Salary Packages
Employees expect to be paid as much as they could earn doing the same job someplace else and they feel “de-valued” when they are paid less.
Employees 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 salaries.
The simplest way to establish competitive fairness is to publish everyone’s compensation like publicly-held companies publish executive compensation. The social media firm Buffer has done this successfully for years.
3. Hire Using Intelligent Processes
In the same way that you would not hire your car mechanic to do your accounts or vice versa, many businesses recruit staff without having any experience or training in how to recruit good talent. In many cases selection of new personnel is made with little or no knowledge of the individual role requirements, professional recruitment processes, profiling and candidate objectivity.
A good professional recruiter will want to get to know and understand your business and the needs of each individual hire. They will also spend time getting to know potential candidates, their background and experience, suitability for the role and their relevant personality traits. Only then can they determine what is a “good fit” for both parties.
Using a recruitment professional may seem costly at first sight, but when the costs are compared directly with poor or inadequate recruitment, staff attrition, advertising, time interviewing, evaluating and selecting replacement staff, together with training etc., then getting the right people first time wins all the way to the bank.
4. Delegate, Empower, Engage!
Thirty years ago, the key management concept was “delegate.” Fifteen years ago, it was “empowerment.” Today, it’s “engagement.” All three buzzwords mean the same thing: managers should involve their employees as much as possible in decision making processes.
Companies that have employees who are “engaged”—meaning they are making decisions rather than simply following orders—have a 31% lower turnover rate.
The easiest way to increase employee engagement is to allow them input in setting their own work hours and decide whether and when to work remotely.
5. Remove Unnecessary Uncertainty and Reduce Stress
There’s no question that today’s workplace contains more uncertainties than in the past. The economy changes rapidly and innovations constantly disrupt previously stable markets.
This pervasive uncertainty creates a climate of stress that can make employees miserable, according to a recent study conducted at the University College London.
While no single company can fix an uncertain economy, a company can make work more predictable simply by keeping its employees briefed and giving advance warning when changes are imminent.
Remember we are all human and as such we like what we know, so change is not always well received. We need to communicate the need for change and convey the associated benefits before any change is implemented. This removes much of the uncertainty and associated stress for the workforce as well as engaging them in the decision making process and integrating them more into your company.
6. Removing the Bad Apples
It’s difficult or impossible for employees to feel loyal to a company that tolerates individuals who make the workplace miserable for everyone else.
Abusive bosses and co-workers greatly increase stress (and therefore turnover of staff) even among those who aren’t immediate victims.
The obvious solution is to transfer or terminate employees who are consistently obnoxious or abusive and are unwilling to change their attitude and behaviour.
7. Demonstrate Pride in your Workforce
Employees want to be proud of their jobs and of where they work. Companies that have impressive talent brands attract and retain talent more easily.
Unfortunately, talent brands, like corporate brands and product brands, take time, effort and money to build and maintain. There are no shortcuts.
However, if you’ve created a solid talent brand, you can easily get more mileage from it by bringing it front and centre on your website and materials.
By doing these seven things, you’ll be able to increase your employees’ loyalty. And above all, this means a happier, more productive, and more successful workforce.