Employee Loyalty Value

Employee loyalty and employee satisfaction are strongly linked. While employee satisfaction is important for things like productivity, customer service, etc., it is also true that loyalty – the willingness of an employee to stick with the company in the long term – is extremely important for long term success, due to the costs of replacing a lost employee. Valuing loyalty appears to also be a method used to increase satisfaction.

From an article back in 2000, quote: There is a two-way relationship between employee loyalty and the labour market, with each influencing the other. Japan is a strong example of this, with its relatively low rate of labour turnover. This is the result of the mutual understanding, or social contract, between employers and employees.

These factors send a signal to the labour market that companies place a premium on workers who are loyal, hard working and committed to the employer. It would seem as though there is a strong reason for employers to start valuing loyalty. An emphasis on loyalty shows employees that they have a reason to stick around, and that their efforts are going to be rewarded with strong pay, promotions, etc.

While some may quibble with the idea, my own personal view is that no, companies are not placing a premium on loyal employees. Companies do seem to be placing a premium on the idea of loyalty – namely, that they are emphasizing satisfaction with the hopes of improving loyalty overall. What they are not doing, however, is literally rewarding loyalty.

It does not appear that companies are actually giving loyal employees rewards for the act of being loyal. This appears to be especially true on the low end of the scale. The more “replaceable” employees do not get the same perks and benefits of upper management, as though they are easily replaceable.

They may even be easily replaceable. But the cost of replacing them is high, and keeping the employee around and dedicated to the company is valuable in its own right. It often appears that companies today look at employee loyalty as a result of other efforts.

But employee loyalty itself should be rewarded. When/if companies are able to show employees at all levels, regardless of pay, that sticking with the company is in their benefit, they are going to be far more likely to maintain a loyal staff of hard working individuals.