Is Employee Loyalty a Realistic Business Proposition in the 21st Century?

Prior to the early to mid-20^th Century most of the world was used to lifetime employment and where Britain, for example, had such a strong manufacturing industry that lifetime employment was the norm and generations from the same family would work for the same company, rarely leaving their community.

It was during the sixties and seventies that the norm changed and ‘career advisors’ were recommending people to have moved jobs three times before their thirties, suggesting that this gave them greater exposure to different business methodologies across different firms (which was sound advice as long as the organisations were reputable); and during this time the concept of lifetime employment became the exception rather than the rule.

But it’s not clear why the concept of employee loyalty should have been lost with the change in employment practices, as career development shouldn’t stop employees and organisations working in an environment where employee loyalty can exist (while they are with the organisation).

Thirty years ago Japanese style management was being taught in business schools across the world, where lifetime employment and employee loyalty was the norm and where the positives of ‘encouraging’ and ‘building’ employee loyalty was considered a competitive advantage for the West to incorporate back into their business models.

In fact it makes sense for organisations and employees to work together to create an organisational culture that encourages a natural loyalty to the organisation during their tenure at the company. Someone who is loyal is more committed, more content and more dedicated than the alternative working environment.

Organisations should accept that employees will leave to gain further experience, maybe in a different function, or a different industry or a different geographic location; but that doesn’t mean that the ‘talent’ won’t come back again with a new set of skills later in their career, in fact maybe that’s exactly what some organisations should be encouraging. Further a ‘loyal’ employee that leaves for further experience and development elsewhere, can still be a great ambassador for the organisation or organisations they have worked for – not just speaking highly of their products and/or services, but encouraging other ‘talented individuals’ that this is an organisation they should want to work for.

The foundation of customer service proposes that offering loyal service gives an organisation the advantage, not only to be able to fulfil their customers’ present needs, but also the ability to anticipate their future needs. This ability to anticipate presents the firm with the opportunity to surprise and delight customers on a consistent basis thereby reinforcing to the customer, the firm’s service loyalty and subsequently affecting a responsive and sustained patronage.

In fact Jay Kandampully wrote way back in 1998 that one of the greatest challenges facing organisations today is the ever-growing competition, the continuous increase in customer expectation and customers’ subsequent demands as service improves. Moreover, customers are becoming increasingly critical of the quality of service they experience. Customer demand and competition are forcing firms to cut loose from the traditional customer satisfaction paradigm, to adopt proactive strategies which will assist them to take the lead in the market-place.

And I suggest that what is true for the customer is also true for the employee – they have greater expectations and demands than ever before; and are becoming increasingly critical of their employers.

Employee loyalty can be developed in a mature business culture that accepts that employees will migrate for various reasons in today’s global business environment; and rather than frowning upon it they should embrace it and where possible include migration paths within the career development strategies for their most talented employees, as a minimum.

Employee loyalty may not seem a natural concept in today’s fast paced and uncertain world – but the basics that allow loyal relationships to develop are solid business principles that organisations should want to see as part of their organisational culture.

Employee loyalty often doesn’t get off the starting grid as organisations and employees fight over the ‘chicken and egg theory’ – i.e. who will make the first moves to allow loyal relationships to be formed; and it takes a strong and confident leader to make the first move. But that’s exactly what’s required if the organisation is going to reap the significant performance and cultural rewards that a firm of ‘loyal’ employees generates.

So one question you should consider in 2013 is how loyal are my employees and do we have an environment that encourages loyalty?

References:

Kandampully, J. (1998). Service quality to service loyalty: A relationship which goes beyond customer services. Total Quality Management, Vol. 9, No. 6, p.431- 443.