Employee Loyalty

There is no denying that in the last ten years a lot of things have changed in the economy. It’s easy to forget, but there was a time when the economy appeared to be thriving, with low unemployment rates and ample growth opportunities. Now, it appears that the economy is struggling, and unemployment rates have been stagnating despite ample help by the government.

Companies need employee loyalty to survive. When an employee leaves, the financial cost to replace the employee can cause a lot of damage to the company. The more turnover there is, the more losses they take.

When the economy was booming, employee loyalty was difficult. Indeed, research showed that with so many jobs available, employees were jumping ship to find the next big payday.

One might think that employee loyalty now would be stronger, since employment rates are low and fewer jobs are available to the average person. Yet many believe that employee loyalty is actually weakening. On first glance this may seem counterintuitive.

Indeed, most people understand that the job market is pretty slims, so it would make sense that they want to stay with the employer willing to hire them in order to not take a gamble on the job market. But there are several other factors that may be at play here.

For example, many people are being forced to take jobs that are outside of their initial job goals simply to have any income at all. Cost of living hasn’t decreased with the job market crash, so many people are being pushed to taking any employer that will hire them, but once they do they are going to seek out employment elsewhere that is closer to their career goals. Similarly, many companies appear to have shifted priorities, valuing low cost over experience.

Employees that cost very little are probably going to be more fickle about their choice, hoping to make more money as they gain more experience (knowing that they’re being short changed). Obviously this represents just a few of the possibilities about why this is the case, but it does seem fairly clear that employee loyalty issues have changed since the days of low unemployment. Just a few decades ago, employee loyalty was low because jobs were plentiful.

Now employee loyalty is low because jobs are scarce. This may be something to keep in mind as you look towards your loyalty efforts.