7 Simple Ways to Increase Employee Loyalty
April 5, 2016
According to studies, more than half (55%) of employees in the average company are searching for other job opportunities. And not surprisingly, many companies loses 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 about 20% of an average employee's salary to replace that employee, according to a study by the Center for American Progress. 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. Understand 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 behaviors those emotions drive, will keep you focused on what really matters.
2. Offer competitive and fair compensation
Employees expect to be paid as much as they could earn doing the same job someplace else and they feel "de-valued" when they're 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 more referrals
As bestselling author Bob Burg (The Go-Giver) points out: "All things being equal, people will do business with, and refer business to, those people they know, like and trust."
For example, 60% of the employees at the mobile security vendor Location Labs were hired as result of employee referrals, resulting in an astoundingly small 5% annual employee turnover rate.
4. Give employees more control
Fifty years ago, the key management concept was "delegate." Twenty-five years ago, it was "empowerment." Today, it's "engagement." All three buzzwords mean the same thing: managers should cede control to employees.
Companies that have employees who are "engaged"—meaning they're making decisions rather than simply following orders—have a 31% lower turnover rate.
The easiest way to increase employee engagement is to have them set their own work hours and decide whether and when to work remotely.
5. Remove unnecessary uncertainty
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 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.
6. Jettison the jerks
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 coworkers greatly increase stress (and therefore turnover) even among those who aren't immediate victims, according to a study cited in the bestselling book The No Asshole Rule.
The obvious solution is to transfer or terminate employees who are consistently obnoxious or abusive and are unwilling to change their attitude and behavior.
7. Publicize your talent brand
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 center on your website and PR materials.
By doing these seven things, you'll be able to increase your employees' loyality. And above all, this means a happier, more productive, and more succesful workforce.
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