Why workplace loyalty isn’t what it used to be and what your company can do about it
There was a time when employees were loyal to one organization for many years, decades, or even their entire career. This was in large part due to the stigma associated with regularly switching jobs. It branded employees with a scarlet letter on their chests for being disloyal or problematic.
Today, these former notions of workplace loyalty have been thrown out of the window. Why the change? Pensions are limited, technologies and markets are continuously changing, opportunities are immense, global business is booming, and employees now have all of the leverage to do what is best to advance their personal situations. In order to stay competitive, companies must learn to adapt to this new trend and use it to their advantage.
A recent rise in job hopping
In the past few decades, average employee tenure has seen a steady decline. In fact, a Gallup study found that 60% of millennials are open to new opportunities. This has made it more challenging for companies to retain effective talent and increased the need for more effective recruiting efforts. But why is the change occurring and what does it mean for your company?
Employees seek growth – Many professionals today want more than just a comfortable salary to pay the bills and a secure job position. They want continuous development, education, and advancement. If a professional does not feel challenged or does not foresee significant climbs in the corporate ladder, they have no qualms in going elsewhere.
Employees seek flexibility – With the rise of telecommuting and mobility, along with a migration from the typical 9-5, professionals now have opportunities they may not have had access to in the past. Today, professionals, retirees, and stay-at-home parents can work without leaving their homes, start businesses simply by setting up a website, or freelance more easily than ever before. The traditional 40-hour work week at the office has significantly evolved.
Employees seek engagement and impact – A 2015 Gallup poll1 measuring employee engagement in the US found that just 32% of employees felt engaged in their jobs. Employees desire flexibility, creativity, and purpose and when their employer offers this, they are more committed to their team and the future success of the business. When employees understand their role and responsibilities, have what they need to be successful, and can see the connection between their role and the overall organizational purpose, they are less likely to explore new external opportunities.
How to deal with the shift
Studies on the cost of employee turnover predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. Therefore, it is important for companies to implement practices that are better adapted to the new trend.
Exploit the positives – Employee turnover has downsides – there is no doubt about it. There are significant costs involved in having to recruit and onboard new talent, plus there is a loss of knowledge that an employee who exits takes with them. However, there are upsides as well. Continuously bringing in new talent ensures fresh ideas and insights, preventing stagnation and potentially driving new competitive advantages.
Give valued employees incentive to stay – Today’s professionals want opportunities for growth, competitive pay, flexibility, and an attractive work-life balance. Companies that recognize and effectively address this can retain employees by giving them what they need to be happy. Be creative! Allow executives to work from home. Provide ongoing training or enable employees to temporarily explore other roles within the business. Ensure that employees understand their career ladder and what they need to do to take that next step. Create an effective, innovative workplace that encourages employees to be creative. Establish spiffs or bonuses that encourage competition.
Work with quality recruiters – A critical piece in all of this is finding and retaining top talent. Organizations should work with high quality recruiters who have specific knowledge of industries and trends. This is particularly important in IT, where specialized knowledge is critical to verify that employees have the skills and experience necessary to succeed in the workplace. By effectively managing recruiting efforts and partnering with specialized firms, companies have the ability to draw from a large pool of qualified applicants in an extremely competitive market and ensure that they remain ahead of the hiring curve.
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