Building and Improving Employee Loyalty for Long-Term Success

A study conducted by the Wharton School found that an average company tends to lose anywhere from 20% to 50% of its workforce each year. 

This prompts a pivotal question: What is the organization's current state of employee loyalty?

The dramatic shift in employee behavior due to the organizational restructuring to the ever-shifting labor landscape can cost a company comparably more. Research by McKinsey has found that employees found three elements of the employee experience as the most important reasons for leaving a job. 

35% claimed that the lack of support prompted them to quit. At the same time, another 35% have claimed a lack of career development as their major motivation for switching. The research has shed light on the need to find a personalized yet multidimensional employee experience rich in its ability to incite engagement and connection.

Keeping your best employees engaged can be challenging when the contemporary workplace constantly shifts. Expectations have changed in a post-COVID world with the rise of remote work and the demand for more flexibility and better work/life balance. Companies can take note and adjust or be rigid and risk losing their best performers.

Cultivating a loyal workforce won’t happen by accident. It takes time and effective strategies.

By arming employees with the right tools to be more efficient - and incentives to do their best work - engagement happens as a side effect, and your best employees are much less likely to start searching for greener grass. You may even find those happy employees will participate in an employee referral program and bring in even more loyal employees.

Employee loyalty isn’t dead, it’s just changing

Gone are the days when employees stayed with one company for decades out of sheer obligation. Loyalty hasn’t disappeared—it has evolved. Today’s workforce values growth, purpose, and flexibility over tenure alone. Employees aren’t just looking for a paycheck; they want meaningful work, recognition, and a workplace that supports their personal and professional aspirations.

The traditional idea of loyalty, built on long-term job security, has shifted toward mutual value. Employees commit to organizations that invest in them—whether through career development, a strong work culture, or opportunities for advancement. In return, businesses that prioritize engagement, recognition, and well-being see higher retention rates and stronger employee dedication.

Loyalty today isn’t about staying in the same job forever—it’s about employees choosing to give their best because they feel valued, respected, and aligned with the company’s vision. Businesses that adapt to this shift will build a more engaged and committed workforce.

The costs of failing to invest in employee loyalty

Employees who feel disengaged from a company are likely thinking about quitting, planning to quit, or actively applying elsewhere. Unfortunately, when a company does lose a good employee, it is incredibly costly in terms of money and time. A departing employee can cost a company 1.5 - 2 times the employee’s salary.

There are also “soft costs” to consider. When a dependable employee leaves, it can mean the loss of customer relationships, reliable talent, and workplace innovation. As we’ve seen with the Great Resignation, one lost employee can trigger an exodus of other employees.

Those who stay struggle with low morale and growing frustration over missing out on better real or perceived opportunities. Productivity declines, impacting the company as a whole. Work hours and human resources go toward finding replacements rather than investing in company growth.

Cultivating employee loyalty doesn’t mean losing sight of other priorities like customer service or your bottom line. On the contrary, increasing employee engagement will only enhance other aspects of your business. Investing in your employees is investing in your customers.

Traist of loyal employees

Loyal employees bring stability, commitment, and a positive attitude to the workplace. They don’t just stay longer; they actively contribute to the company’s success and help foster a strong team culture. Here are the key traits that define a loyal employee:

• Commitment to company goals: Loyal employees align with the organization’s vision and actively contribute to its success.
• Consistent performance: They take pride in their work, maintain high standards, and deliver quality results over time.
• Strong work ethic: Dedicated employees go the extra mile, showing reliability, responsibility, and a willingness to take initiative.
• Positive attitude: They contribute to a healthy work environment, support colleagues, and remain optimistic even during challenges.
• Willingness to grow: Loyal employees seek professional development, embrace new skills, and adapt to industry changes.
• Advocacy for the company: They speak positively about their workplace, recommend it to others, and participate in employee referral programs.
• Trust and dependability: Managers and teammates can rely on them to fulfill commitments, meet deadlines, and uphold company values.
• Engagement and participation: They actively contribute to meetings, company initiatives, and team-building activities.
• Long-term perspective: Rather than constantly seeking new opportunities elsewhere, they invest in growing within the company.
• Openness to feedback: Loyal employees appreciate constructive criticism and use it to improve, showing a commitment to personal and professional growth.

Types of employee loyalty programs you can run  

When considering employee loyalty programs, various types can be implemented to recognize and reward contributions effectively. Here’s a deeper look at popular options to consider:

1. Points-based systems

Points-based systems allow employees to earn points for various achievements, such as completing projects, meeting targets, or participating in company events. These points can be redeemed for rewards like gift cards, merchandise, or experiences, creating a fun and engaging way to encourage participation. 

The competitive element of accumulating points fosters motivation, as employees strive to reach higher tiers for better rewards. This system not only incentivizes performance but also encourages continuous engagement with company initiatives.

2. Recognition programs

Recognition programs are designed to celebrate long-term service or exceptional contributions by employees. Milestones such as work anniversaries or notable achievements can be marked with awards, plaques, or public acknowledgment during company meetings. 

These recognitions can be showcased on internal platforms or through company newsletters, giving visibility to the achievements and inspiring others. By regularly recognizing employee efforts, organizations foster a culture of appreciation and motivation, reinforcing positive behaviors and high performance.

3. Referral bonuses

Referral bonuses are an effective way to engage employees in the recruitment process. When an employee refers a candidate who is successfully hired, they receive a monetary bonus or other rewards. This not only encourages employees to bring in quality talent but also deepens their investment in the company’s success. 

Knowing that their recommendations can impact the organization motivates employees to refer individuals who align with the company culture, leading to a more cohesive workforce.

4. Professional development opportunities

Offering professional development as part of loyalty programs shows a commitment to employee growth. Organizations can provide funding for courses, certifications, or workshops that align with employees' career goals. 

This investment not only enhances individual skills but also builds a more knowledgeable workforce. By facilitating continuous learning, companies foster an environment where employees feel valued and empowered, driving loyalty and engagement.

5. Flexible benefits packages

Customizable benefits packages allow employees to tailor their benefits to meet their personal needs. Options may include health and wellness programs, retirement plans, or lifestyle benefits like gym memberships and childcare support. 

Offering flexibility shows that the organization recognizes and respects individual preferences, which can significantly enhance employee satisfaction. Employees who can choose benefits that align with their lifestyles are likely to feel more connected and loyal to the organization.

6. Wellness incentives

Programs that promote health and well-being are increasingly popular in loyalty initiatives. These can include fitness challenges, wellness days, or rewards for participating in health-related activities like health screenings or workshops. 

By encouraging employees to prioritize their health, organizations not only show they care about their employees’ well-being but also reduce absenteeism and increase productivity. Wellness incentives contribute to a healthier work environment, leading to higher morale and engagement.

7. Milestone celebrations

Acknowledging significant personal or professional milestones strengthens employee loyalty. Celebrations can range from recognizing project completions to commemorating life events such as weddings or births. 

Personalized celebrations—like team shout-outs, cards, or small gatherings—can create lasting memories and foster deeper connections among employees. This attention to individual milestones highlights that the organization values employees beyond their work contributions, enhancing feelings of belonging and appreciation.

Implementing these diverse types of loyalty programs for employees can create a more engaged and committed workforce, ultimately benefiting the organization as a whole.

How to improve employee loyalty: 9 effective ways

There are many ways to boost employee engagement and morale, but here we will take a look at 9 strategies that have proven most effective in improving employee loyalty in 2024.

1. Encourage feedback and take action

Giving employees what they need to thrive in the workplace is fundamental to cultivating a loyal workforce, which means getting feedback and taking action. Create a work environment where employees feel safe voicing their thoughts. When employees know they have a voice, they feel valued. If there are concerns, they can express them. If they have new ideas, they can share them.

Managers keen on enhancing employee engagement should be proactive in responding to feedback. Schedule regular 1:1s with your team members driven by agendas and ending with clear action items, takeaways, and areas for improvement. Run anonymous surveys to know how your employees are feeling. One of the best communication tools at your disposal is listening to employees and genuinely hearing what they have to say.

Implement employee feedback when it’s feasible and reasonable. If it isn’t, provide the employee with an explanation for why and express gratitude for their contribution.

2. Address problems quickly

It’s nice but naive to think you will solve all your problems with open communication and a positive work environment. Disputes are inevitable, and one bad encounter or meeting gone wrong can derail your other efforts at employee engagement. Toxicity roots in a team like a weed and spreads fast.

So don’t let it fester.

Establish a process for dispute resolution that will help your employees deal with issues as they arise. Try to identify specific individuals who initiate conflict and contribute to ongoing toxicity.

These employees may need to be terminated or transferred if they fail to adjust their behavior after appropriate warnings. Your other employees will be thankful that you’re willing to defend the workplace's safety.

3. Be flexible in redefining work

People in the future may look back on movies like Office Space and shake their heads in disbelief that “work” meant spending eight hours in an office. Don’t think of remote or hybrid work as a response to a crisis or an occasional perk. It’s a new model for work that’s here to stay. In the post-COVID world, employees want–and even demand–a healthy work/life balance on top of a paycheck.

Managers who heed this call for flexibility will gain a happier and more committed workforce. A third of employees report flexibility as the primary reason they remain loyal to an employer. Flexibility is more than remote or hybrid work options. It includes thinking outside the box of a traditional work week, like testing the 4-day work week trend.

Being flexible also means looking out for the well-being of your virtual workforce. Employees who work remotely may end up spending more time on the clock or struggling to shut off work. Support the well-being of your employees by holding to clear boundaries and enforcing time off.

4. Give praise and show gratitude

Giving your employees genuine praise and a simple thank you takes little effort but delivers a big impact. Showing appreciation for your employees has significant benefits for the workplace. Employees feel less stressed, more motivated to show up to work, and more productive.

There are many ways to convey your appreciation. Consider starting reward programs to recognize an employee of the month, years of service, and exceptional performance. Hold events celebrating your employees and reminding them of their value, whether a holiday party or a special outing.

Don’t just focus on big wins and special events to celebrate your employees. Small daily signs of appreciation and gratitude will create an environment where employees feel consistently valued. Go beyond “good job” to customize feedback with specific examples of how an employee adds value. As a bonus, showing gratitude will help you feel happier.

5. Invest in training and development

Employees who are growing and learning are employees who won’t be leaving. Therefore, professional development and training are particularly important for retaining top performers. 

Look for professional development events and relevant conferences that will allow your employees to network and stay up-to-date on industry trends. That’s good for you and your employees since you’re investing in the continued growth of your workforce. Allow employees to use work time for additional training and offer incentives for certifications or coursework. With the rise of online training and education, access to quality professional development opportunities is just a few clicks away.

You can create a mentorship program or ask a more senior employee to coach a junior staff member. Again, this contributes to community building and emphasizes employee success over the long haul.

6. Equip your employees with the right tools

In addition to professional development, employees also value having the right tools to do their jobs efficiently and seamlessly. There’s almost nothing more frustrating than making work more complicated than it needs to be. When you support your employees’ productivity with helpful tools, you equip them with what they need to succeed.  Even the man who walked 1000 miles needed good shoes to get him there.

The right app can help your employees easily move through tasks and to-do lists. For example, some apps help streamline meetings, improve focus, make better to-do lists, prioritize tasks, and manage unwieldy email inboxes. Your employees will appreciate having the best tools to help them conquer the work day.

7. Offer fair compensation and incentives

No matter what you do to build employee loyalty, if you don’t pay your employees fair and reasonable compensation, they won’t stay long. Websites like Glassdoor make it easy for employees to know what others in similar roles are making and learn about different company cultures. An employee who discovers their pay is well below average will start itching to make a jump. But, one yearly bonus or an occasional pay bump won’t make them stay.

It isn’t always about salary either. You can reinforce an employee’s connection to work through incentives and perks. For example, paid gym memberships, personal days, and stock options motivate employees and foster buy-in.

Stock options also help you recruit better talent and keep them committed to the company’s success. Inform employees of internal opportunities and encourage their upward advancement in the company. That way, you keep high performers happy and off the job market.

8. Ensure your workplace is a safe space for diverse ideas

To build loyalty, you need to make your company a place where employees feel included, valued, and safe to express their ideas.

The workplace is filled with varying perspectives and backgrounds, and it’s likely that some employees will feel more comfortable asserting views than others. Ensure that everyone is welcome to contribute to respectful workplace dialogue. Take the lead by encouraging employees to discuss their concerns openly and without judgment using empathic listening.

Leaders that listen thoughtfully to employees and then follow through show a genuine investment in the well-being of their employees, and that will in turn foster more employee loyalty.

9. Foster internal communication

Part of encouraging open dialogue is encouraging internal communications that build community and positive work culture. The more positive and supportive the workplace, the more likely employees are to want to be involved.

Use an internal messaging app for quick chats with your hybrid or remote workforce (or even if your employees are right across the room from each other). Find ways to promote communication beyond a formal meeting setting, such as a weekly lunch or social event. A company newsletter is another easy but effective technique for communicating updates while fostering rapport and connection.

The ROI of investing in employee loyalty

There are no downsides to prioritizing employee loyalty. Organizations with emotionally invested and engaged employees outperform companies with low employee engagement by 202%. Companies with loyal employees have 6% higher net profit margins. Companies that take employee loyalty seriously can see sales improve up to 20%.

These companies will also literally see more of their employees. Loyalty and engagement lead to 41% less absenteeism. Loyal employees show up, work hard, and make a difference.

Numbers only tell a part of the story. Let’s look at some strategies from companies that successfully cultivate employee loyalty.

Employee loyalty done right: Inspiring company examples

Building a loyal workforce takes more than perks. These businesses have mastered employee engagement through culture, recognition, and growth opportunities.

1. McDonald’s

McDonald’s is committed to fostering employee loyalty by creating a company culture that goes beyond flipping burgers.

During the pandemic, McDonald’s prioritized the safety and well-being of employees with hourly bonuses, paid sick leave, and free access to counseling. This access fits McDonald’s history of incentivizing employee performance with bonuses and paid vacations.

The company invests significant time in training and development. For example, managers receive diversity training and workshops to help them excel in their careers and provide quality leadership for other employees. McDonald’s also owns Hamburger University, where future business leaders and managers hone their skills while picking up transferable college credits.

2. Microsoft

Microsoft is a self-proclaimed steward of the employee experience. Microsoft succeeds in building employee loyalty by staying in tune with the needs of employees and being knowledgeable of trends in the tech industry. They embrace flexibility. For instance, if an employee needs to travel for a family emergency, they’ll support a shift to remote work without question.

This agile approach to changing trends means employees are well compensated. Microsoft recently boosted employee compensation due to inflation and the rising starting salaries offered by other tech companies.  Microsoft wants employees to have a competitive wage that keeps the grass looking green on their side of the fence.

3. Leading travel company

A leading travel company transformed its approach to employee engagement and loyalty by leveraging Empuls for rewards and recognition (R&R). Initially, the platform was introduced in the HQ operations division, where it addressed engagement challenges effectively. Encouraged by its success, the company expanded Empuls to its holiday experts department, streamlining recognition efforts that were previously managed manually.

By implementing Empuls in January 2023, the company automated its R&R program, starting with Spot Awards for customer-centric achievements, sales targets, and referrals. Within six months, the impact was undeniable—monthly reward points distributed increased sevenfold, company-wide communication improved with an active social intranet, and platform engagement surged 4.5 times. Employees embraced the mobile app for collaboration, while community groups fostered a sense of belonging.

With a 33% rise in total posts, a 7x increase in reward points, and a 4.5x boost in active users, Empuls became a game-changer. The company now plans to expand its use of the platform to further enhance motivation and workplace culture.

4. HubSpot

HubSpot is a marketing and sales software company that can claim to have some of the happiest employees. Happiness has very tangible benefits for your company. It can raise sales by 37%. HubSpot promotes happiness with competitive wages, company perks, a willingness to listen to employees, and a company culture that honors work/life balance. HubSpot’s flexible approach to work focuses on results rather than hours worked. Employees can adjust their schedules around their lives, whether fitting in a workout or going to a doctor’s appointment.

HubSpot’s philosophy toward customer service and employee engagement is captured in its “Culture Code.” This code offers a model for other companies who want to chart new paths in customer loyalty. HubSpot recognizes that the work world has changed, and they want to change with it. So they promote a culture of transparency and trust that replaces an “open door policy” with a “no door policy.” So it’s no surprise that employees give HubSpot high marks.

Elevating employee loyalty through recognition and rewards

Empuls transforms employee loyalty programs into powerful catalysts for engagement and commitment, creating an inspiring workplace culture.

With its innovative points-based rewards system, employees can earn points for their achievements—whether hitting sales targets or completing training—redeemable for exciting rewards like gift cards or extra time off.

The magic happens in real-time recognition, where managers and peers celebrate accomplishments instantly, igniting a spark of motivation and camaraderie. Customizable to reflect your organization's unique culture, Empuls ensures that every program resonates deeply with your team.

The social intranet feature fosters a vibrant community, allowing employees to share milestones and celebrate each other's successes, while insightful analytics equip leaders with the data needed to fine-tune initiatives based on employee feedback. Empuls highlights your commitment to growth by integrating professional development opportunities, reinforcing loyalty. 

With Empuls, loyalty programs evolve into dynamic experiences that drive employee satisfaction and lasting organizational success.

Conclusion

The man who walked 1000 miles to collapse at the door of the woman he loved didn’t make that trek for someone he had just met. Loyalty takes time and dedication. It won’t happen overnight.

Loyalty won’t magically happen as soon as a new hire shows up for work, but it can happen with the right approaches. 

It comes down to your willingness to express loyalty to your employees by doing what any good leader should do: listen to your team, invest in their growth, and support them as both people and productive members of your team. Their loyalty will naturally follow.