Employee Loyalty Starts With Employee Engagement

Are your employees loyal to your company? Managers are wondering why there are employees who are willing to use social media to complain about their workplace or who don’t feel the need to engage customers. Chances are, these leaders are also struggling to understand why the employee retention rate is low. There is a common factor among employees who start a union organizing campaign, look for another job, quiet quit, or lack loyalty – negative emotions about the organization’s workplace, culture, and leadership. Loyalty is comprised of emotions which is why employee loyalty depends on how well your leaders have developed employee engagement. Employee engagement is an emotional commitment to your organization.   

What is Employee Loyalty?  

Loyalty is a human emotion that pervades people’s work and personal lives. Anytime we have feelings of loyalty to someone or an organization, we want to see them succeed. Loyalty is a strong feeling of support or steadfastness, even amidst turmoil and challenges. Loyalty has an element of mutuality too. It’s nearly impossible to stay loyal when loyalty is not returned. It’s precisely like feedback in this way. The feedback that only flows one way will either indicate leadership control or employees with no voice because they get no response. Loyalty means there are implied obligations on both sides.  

Loyalty within the workplace context means having strong feelings about work, management, and the organization. Both sides of the relationship behave in a positive, supportive way because there are: 

These are general qualities of loyalty. Fostering employee loyalty means effective leaders inspire employees to recognize these qualities exist, to do their best job for the employer, and to remain committed to organizational success. The feelings of loyalty impact productivity, customer relations, collaboration, willingness to learn and grow in the job, and desire to stay in the position.   

Loyal employees are motivated, satisfied, and happy, and they understand their efforts have real meaning to company success. This is why employee loyalty is highly correlated to customer loyalty and lower turnover rates. Let’s look at two important benefits your organization can realize through employee loyalty.  

Lower Turnover Rates 

Employees who feel loyalty to their employer are less likely to leave their positions. The relationship between employee loyalty and higher retention rates is logical. To develop employee loyalty, your leaders give them a reason to stay through meaningful and interesting work, recognition, and empowerment. There are plenty of studies and statistics to back up these claims.  

  • Ferry’s research found that 33 percent of employees seek a new job because they are bored and want new challenges.  
  • Mckinsey & Company’s Great Attrition research found three elements of the employee experience as most important to employees on their list of reasons for leaving a job were not having caring leaders (35 percent), unsustainable work expectations (35 percent), and having no opportunities for career development and advancement potential (35 percent). The fourth was a lack of meaningful work (30 percent). During the pandemic, employees saw employers furlough or lay off their coworkers, and those who remained behind were upset and resentful about taking on more work to keep the organization going.  
  • Zippia gathered multiple statistics on employee loyalty and found that 79 percent of people who quit do so for lack of appreciation, 63 percent because of no opportunities for advancement, and 57 percent because they feel disrespected. 
  • A West Monroe study found that 82 percent of employees felt a sense of loyalty to their employer, but 59 percent of those surveyed would leave if a more appealing job became available. 
  • The World Economic Forum surveys have shown that loyalty has declined for years, and the pandemic only accelerated the change. Of the surveyed, 20 percent left their jobs due to a lack of fulfillment. They didn’t have a sense of purpose. 

It’s clear that there are numerous reasons why employees leave, but many come down to leaders not focusing on employee engagement.  

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More Positive Customer Experiences 

Employee loyalty leads to positive customer experiences. A Customer Consumers Group annual 2022 Retail Customer Brand Loyalty Study found that product price is a factor but was only sixth on the list of loyalty factors. Intangible factors ranked higher. They included a positive customer experience requiring enterprise-wide support from the people directly interfacing with customers to back-office support.  

Glassdoor’s economic study, as reported in Happy Employees, Satisfied Customers, asked, “Can companies achieve great customer satisfaction without also having great employee satisfaction?” The answer was a strong statistical link between a satisfied workforce and the ability to deliver better customer satisfaction. This was particularly true where workers and customers have much contact, like in the retail, hospitality, hotels, healthcare, restaurants, tourism, and financial services industries. A customer-facing employee with low job satisfaction has less motivation to provide a positive customer experience.  

Engaged employees trust their leaders and feel they want the best for them, believe their work has meaning, and have a voice in decision-making and about their jobs, among other positives. Engaged employees support your organization’s brand, protect its reputation, have a shared purpose aligned with organizational goals, and always strive to do their best work.  

More Reasons Employee Loyalty is Important 

Reducing employee turnover and increasing customer loyalty are two critical reasons for improving employee loyalty. But there are many more, and they all lead to an improved bottom line.  

  • Strong employee voice leads to contributions that would not happen otherwise, like innovation and problem-solving. 
  • Improved productivity is experienced as employee embrace work and organizational success as a shared purpose. 
  • Improved brand reputation because loyal employees post positive reviews about the workplace on sites like Glassdoor and don’t write negative posts on social media.
  • Employee loyalty leads to more collaboration with coworkers and teams because the focus is on everyone achieving success. 
  • Loyal employees support and contribute to a positive workplace culture
  • Helps the company become and stay an employer of choice, which increases talent attraction and retention, especially in a period of labor shortages.
  • Employees are willing to let leaders know when they believe their managers or supervisors are wrong but do it in a professional manner rather than going public.
  • Do their best at all times.
  • Always willing to learn.
  • Employees don’t act in a way that comprises the organization ethically or in terms of safety.
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Employee Loyalty and Employee Engagement Through Leadership 

There is a direct line between employee loyalty and employee engagement, and employee engagement depends on leadership. Employee engagement is an emotional feeling also. Gallup research found that 70 percent of the engagement gap is due to leadership quality. Your leaders need to learn employee engagement skills, and in strengthening employee engagement, they develop employee loyalty.  

The logical conclusion is that the steps you take to develop employee engagement will nurture employee loyalty because employee loyalty and engagement are directly connected. The employee-leader relationship is the most critical determinant of the degree of employee loyalty. A poor relationship will lead to weak loyalty. It’s easy to overlook the need to train your leaders in relationship building.  

Just because someone is hired or promoted into a management or supervisor position doesn’t mean they have the necessary people skills. So much changed during the pandemic leading to events like the hybrid workforce, the remote workplace, employee expectations about employee voice, increased employee empowerment leading to higher rates of unionization, the labor shortage, quiet quitting in which people quit in place, the “I quit” culture, and employee communication needs and processes. 

Ask yourself some questions about the state of leadership.  

  • Have your leaders been trained to adapt their leadership behaviors to the disruptive changes that developed during the pandemic and permanently changed the post-pandemic workplace, or are you relying on prior training? 
  • Are your managers and supervisors working in old leadership models like command-and-control, or have they been educated on new models in which employees are given as much flexibility as possible to meet goals in their own way? 
  • Do your leaders know how to demonstrate trust in all remote and onsite employees? 
  • Do your leaders understand the principles and importance of feedback in today’s workplace – honesty, integrity, regularity, actionable, and respect? 

The 2022 Mercer Global Talent Trends Report names various 2022 talent trends. The study’s name speaks volumes about the new work environment – The Rise of the Relatable Organization. The insights focused on the employer-workforce relationship. Kate Bravery, report author and Global Leader of Advisory Solutions & Insights, Mercer, said, “Organizations now have a moment of profound opportunity to pick up the tools of empathy honed during the pandemic – balanced with economics – and carve a new way of partnering that is more relatable, and ultimately more sustainable.” Employee loyalty is developed by:  

  • Hiring people with values that are aligned with organizational values 
  • Leaders who listen, learn, and adapt to address unmet needs 
  • Leaders who pay attention to the “how” of work 
  • Leaders partner with employees rather than lead employees 
  • An organization that ensures everyone believes they are getting a fair deal and are in an equitable relationship 
  • An organization that delivers on total wellbeing – mental (think burnout) and physical 
  • Leaders who help employees work with the company instead of for the company 

Employees wanting to work WITH a company instead of FOR a company are expressing their need to have an employee voice. The Mercer survey says, “Nearly all HR leaders (90%) think there is more work to be done to build a trusting culture at their company, particularly as many consider shifting to a hybrid working model. Yet, only 30% of executives see the ROI of building a healthy, resilient and equitable future of work.”  

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Developing Employee Loyalty 

High employee loyalty begins with hiring the right employees, of course. You want to hire employees who understand the company culture, benefits, talent management process, etc. This way, they come on board, understanding their fit in the organization. Once onboard, employees need reinforcement through leadership. Following are five steps at the top of the list of actions your organization can take to develop employee loyalty. 

1. Develop leadership trust behaviors.

Trust behaviors include being authentic, giving and accepting honest feedback, following through on commitments, and showing interest and genuine concern for employee wellbeing. A leader’s actions must support a leader’s words.  

2. Give employees recognition and appreciation.

It can’t be said enough – Employees want recognition and their work appreciated. You want to develop a culture of recognition. The employee recognition company O.C. Tanner’s 2022 scorecard in the Global Culture Report found that only 68 percent of U.S. workers had a sense of appreciation, meaning nearly a third of the workforce did not feel appreciated. A workplace culture is an integration of factors, so the report shows that the importance of gratitude is influenced by the employee’s sense of purpose (70 percent), sense of opportunity (63 percent), sense of success (68 percent), sense of wellbeing (74 percent), and sense of leadership (68 percent). There is much work to do in many organizations to improve workplace culture, and your leaders giving employees recognition is an essential behavior. 

3. Support employee needs

Too many employers are still operating with an outdated leadership style in which employees are hired but never get adequate onboarding, training, and access to resources, all part of the Employee Value Proposition. Once again, employees’ needs change when they get new responsibilities, technology changes the work, the employee strives to build a career and needs guidance and opportunities, or personal needs change. By not meeting the employee’s needs or not having a dialogue with the employee to discuss why the needs can’t be fully satisfied, the message sent upfront is that the organization cares about the bottom line but not the people making it happen.  

4. Give employees the training they really need, measure results, and reinforce it.

This is worded this way because training, for training’s sake, is a waste of time and money. Delivering generic training pulls workers away from their duties to learn things they don’t need to do their job or advance their careers. Instead, give employees the custom training they need to do their best work and meet personal and work goals. Measure the training results and use the metrics to determine if changes are needed to the training effort. Then reinforce the training because this is another way for your leaders to back up words with actions.

There are numerous ways to bolster the training, like giving employees new project opportunities (creating blended learning), adding microlearning during and after the training to make it easier to master the training information, or giving the employee access to gamification that requires applying the training. The training for reskilling and upskilling should focus on keeping talent employable now and into the future to retain them.  

5. Look at the organization holistically.

It doesn’t do your managers and supervisors a good service by unintentionally undermining their efforts. For example, people want a compensation package with intangible benefits like career growth opportunities, flexible work schedules, and job security. Your supervisors may tell employees he or she is planning on adopting a hybrid workforce, but senior management resists.  

Mixed messaging is more common than realized and leads to distrust. Review the organization holistically, from HR policies and procedures to the digital communications system in place to employee training, and so on, matching all the factors to ensure they all support developing employee loyalty. Frankly, a union vulnerability assessment and communication assessment can get you going on the review because any weaknesses mean employee loyalty is at risk too.  

Employee Loyalty Now and Into the Future 

Developing loyalty takes time, so it’s important to develop leaders with strong employee engagement skills and give them access to the tools that help them meet employee needs and gauge progress. Remember that employee loyalty is an emotion too, and like any emotion, there will be times when the feeling is strong and other times when it’s weak. Recognizing that an employee is struggling requires extra leadership effort to determine the real issue. Addressing that issue will move the needle on the employee’s feelings of loyalty.   

Employee loyalty is derived from a supportive organizational culture, a shared purpose that promotes feelings of fulfillment, meaningful work, employee voice, and a sense of belonging. Building trusting relationships is not easy, but the ROI is enormous when meeting employee needs because it sets your organization up for success now and into the future.  

Contact IRI Consultants for help in developing an organization where employee loyalty is strong.  

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About the Author Walter Orechwa

Walter is IRI's Director of Digital Solutions and founder of UnionProof & A Better Leader. As the creator of Union Proof Certification, Walter provides expert advice, highly effective employee communication resources and ongoing learning opportunities for Human Resources and Labor Relations professionals.