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Block the Exits or Start Building Employee Loyalty

By Mark True, Manager, Corporate Marketing, ITA Group

Two out of every three of your employees are likely to be heading for the exits and new jobs when the U.S. economy turns around. An engagement strategy focused on transparency, communication and recognition for their loyalty could stem that rush to the door. 

Unfortunately, recent research says employee loyalty is falling and employers don’t seem to be noticing the problem. 

Employees have been beaten up over the past several years. They’ve survived budget cuts and layoffs, been asked to do more with less and have shouldered the burden of many of those decisions. Survey results from Gallup-Healthways show that the workplace continues to be a huge source of stress: the Work Environment Index for June marked the fifth consecutive month of lowest recorded scores in 42 months.

Employee loyalty has reached a three-year low, according to MetLife’s 9th Annual Study of Employee Benefits Trends. And while employees have perceived less loyalty from their employers each year, employers believe employee loyalty is holding steady.

Researchers note that this widening gap in loyalty perception is a sign that employers may be taking employee retention for granted. They are not paying attention to serious cracks in the loyalty foundations of their workforce; cracks that can expand to threaten their ability to retain the key talent they need most.

Now is the time for employers to ramp up retention efforts to ensure their best talent doesn't opt to seek other opportunities. Three ways to quickly turn the situation around are:

Transparent & Trustworthy

When trust is low, people often begin to focus on protecting themselves rather than producing results for the company. In a difficult economy, every opportunity lost and every dollar wasted just adds to the paranoia. More than 40% of respondents in a 2008 Towers Watson survey of 90,000 employees worldwide gave neutral or negative responses regarding their trust of supervisors; management trusted employees even less.

Likewise, a Deloitte survey shows nearly half of those who plan to look for a new job when the economy improves say it’s because they don’t trust their employer because of business and operational decisions made over the last two years; 40% say they’ll leave because they have been treated unfairly or unethically by their employers. 

What does it take to be transparent? Here are five things you can do:

1. Tell the truth and make sure everybody understands it, from senior leadership down to front line employees. Relentlessly communicate truth – including the financial impact of decisions big and small – to close information gaps and help those responsible for fulfilling the mission understand the mission. 

2. Encourage others to tell the truth, even when it’s uncomfortable. Reward those with differing opinions by giving them fair consideration and valuable feedback. 

3. Admit mistakes. When leaders admit their mistakes, they teach employees to admit to mistakes so they can more quickly move on to corrective action.  

4. Share the bad news, too. Treat employees like adults, providing information on which they can act. And when something changes, let them know that, too, quickly and accurately. 

5. Be visible and accessible. Leaders who share information by engaging employees can also gather a lot of valuable data – from individual and department performance issues to employee morale – that’s not necessarily apparent in monthly sales and production reports.

Growth & Gain

While employees often like the work they do, the biggest motivator to leave a company is that they don’t have opportunities to grow or advance with their current employer. The lack of an established career path for employees is a huge debilitating factor in many large organizations. Equally crippling is the perception that organizations don’t develop leaders.

Here are three ways to establish growth opportunities:

1. Identify superior employees who fit the long term needs, goals and objectives established by your organization through job performance, internal references and organizational fit. Communicate your findings to those employees so they understand the opportunities and the steps to take advantage of them.  

2. Provide training and practice through formal and informal training and a variety of job experiences, to test your assumptions and allow employees to test themselves. This is a safe place to assess capabilities without risking the loss of the employee. If it’s not working, you can likely find another job within your organization, thereby retaining the investment already made in that employee. 

3. Make the move when the employee is ready. Experiences gained in a job-rotation program or job-shadowing initiative help determine when and if the employee is ready for the additional responsibility. Make the change according to the schedule, or be ready to explain the reasons why and establish a new expectation if you don’t act on schedule.  

Reward & Recognize

Employees who toil away with little or no recognition are not ideal candidates for longevity. Sure, some employees avoid the spotlight, but human nature suggests that most people are motivated to perform at a higher level by some level of recognition. A well-designed reward and recognition effort addresses this need and responds with a purposeful, consistent and appealing program that includes the following six steps:  

1. Determine purpose – i.e. achievement, service, financial results, etc. – and measurable goals and budget to stay focused and deliver solid ROI. 

2. Identify employee preferences – tangible gifts, privileges and certificates, etc. – to ensure relevance and effectiveness.

3. Establish recognition strategies so you know from the outset who recognizes whom, what criteria will be used to determine eligibility for rewards, when or how often the recognition will occur, how the recognition will be accomplished, etc. 

4. Create benchmarks and document progress with ongoing measurement so you can make adjustments in the program along the way, based on real data rather than guesses.

5. Communicate often so employees understand and embrace opportunities to provide ideas that improve the workplace, products, service and/or the brand.  

6. Allow for ongoing feedback so you can adjust the program as appropriate to ensure maximum effectiveness.

This article was reprinted with permission from the Fall 2011 issue of DRIVEN Magazine, an ITAGroup, Inc. publication.  

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