When the Proclaimers sing about a man walking 500 miles–and then 500 more–to collapse on the door of the woman he loves, they capture what it means to be deeply loyal.
Employee loyalty is similar. Loyal employees are ready to go the extra mile or miles. They are deeply invested in a company’s mission and values and prepared to defend the company whether they’re on the clock or not. These employees are committed to the company's work and excited to contribute. They aren’t looking for the next opportunity.
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 have an opportunity to 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 that happy employees will participate in an employee referral program and bring in even more loyal employees.
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.
9 Effective Ways to Improve Employee Loyalty
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 2022.
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. 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.
3. 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.
4. 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.
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.
Case Studies of Companies in Strong Employee Loyalty
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.
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.
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.
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.