Employee loyalty: Does anyone know why it got better?

By Jeffrey W. Marr, Editor, Stakeholder Power

According to our recent research, several percentage points worth of U.S. employees -- equivalent to millions of people -- are more loyal to their employers than they were two years ago. So what exactly changed?

Well, it boils down to one of two reasons: either a change in the average employee's experience, or a different perspective, or both. There is no other answer to why true loyalty, which is an attitude, as well as retention, has increased in the last two years. Organizations have either handled employees and their jobs differently, or workers are viewing things differently, which would be a change in expectations.

Let me first argue that we're probably seeing some changing employee expectations during this "millennium recession" and its corresponding job shortage. Rising productivity has served to stave off new job creation even as the economy and capital markets have improved in 2003. After the buyer's market in jobs during the '90s, workers have been mugged by the reality of good jobs becoming precious again. Thus, notwithstanding how they experience their jobs and work environments, workers' attitudes toward employers and their intent to stay put for awhile have increased.

Yet we see evidence that companies have been changing as well, in ways that would earn greater loyalty from workers. For one thing, as mentioned in a prior issue, companies have made fewer mass layoffs in the past few years, compared to prior recessions in the 1980s and 1990s. So managers and owners are retaining people in the face of bottom-line pressures. Their willingness to do that is more than a new management style; it's a value. This is a throwback to the days when loyalty worked both ways - companies loyal to their workers, and vice versa. And employees notice those things. In fact, I would argue based on history, owners and managers started this whole business of disloyalty back in the 1980s when they responded to the hostile takeover threat by making downsizing (a.k.a. re-engineering) and short-term stock value increases an art form. Now they seem to have come full circle by resisting making major layoffs.

The other evidence of employers making things better for workers is in the findings from The Walker Loyalty Report for Loyalty in the Workplace. Workers are experiencing some greater care and concern from their employer organizations today than they were two years ago, and this care-and-concern issue happens to be the number one statistical key driver of loyalty. Workers feel better about being trusted in their jobs at work and receiving more family-friendly benefits, although these ratings yet show room to improve. The perception of workplace ethics improved as well, although this had less direct impact on loyalty.

At the same time, most issues at work did not improve and are still concerns for workers and employers alike. As Marc Drizin explains in his own take on the findings in this issue, loyalty is up, but is arguably still a major challenge, with two out of three workers not Truly Loyal by our measure. One of the specific obstacles to loyalty is in the areas of being treated fairly, in terms of pay, policies and evaluations; and the unimproving "dark side" of not showing care and concern for workers - specifically a lack of long-term training and development.

So after considering all the evidence, where do we net out regarding the reason employee loyalty did improve? I believe it was mainly the economy and people appreciating their jobs more, as well as appreciating employers who stood fast, keeping workers for the long run. The change in expectations appears to trump the worker-experience improvements.

With only about 30 percent loyal today, I believe that as a goal, this nation's employers should strive for a threshold of at least 50 percent of those in the workplace being Truly Loyal. Let's build on the momentum gained during these past two years and see if we can continue earning loyalty, even during a time of economic growth.

"As published in Stakeholder Power -- a monthly online newsletter managed by Walker Information - September, 2003."