Why employee loyalty matters and 10 ways to improve it

Last updated:
July 19, 2021
February 14, 2022
min read
Brendan McConnell
why employee loyalty matters
Table of contents

Employee loyalty is a notoriously difficult concept to nail down, and even harder to measure accurately in a real-world setting. What isn’t up for debate, however, is the value of having loyal employees at any organization.

The challenge, therefore, is how to ensure that you create the right environment to nurture and foster employee loyalty. This article will tackle that challenge, and offer insights into why this effort is worth it in the first place.

The definition of employee loyalty

Defining employee loyalty can be tricky. That’s because it can manifest itself in a variety of different ways, depending on the person and the organization. Because of this, it can be very tough to pinpoint if employees are truly loyal.

To help qualify the concept of employee loyalty, here are two overarching characteristics:

  1. Employees who are devoted to the success of your organization
  2. Employees who believe that being an employee of your organization is in their best interest and plan to remain there for the long term

There are two key themes there. First is the notion that loyal employees have “bought in” to the mission of the organization, and are committed to its success. The second is the feeling that loyal employees have about the organization and their place within it. If that feeling is a positive (and strong) one, then that employee is more likely to be truly “loyal”.

So how do you “detect” if an employee is truly loyal? It’s tricky, but it will typically manifest itself in that person’s actions, including:

  • Always putting the overall success of the organization first
  • Putting extra time and energy into their work when needed
  • Being dedicated to helping the company grow and prosper
  • Displaying perseverance when times get tough on a project or at the organization
  • Taking pride in their work
  • Respecting the organization and their peers
  • Displaying a learning and growth mentality to continuously improve.

If your employees are displaying multiple qualities listed above, then there’s a good chance that they can be classified as “loyal”.

As a final note, it’s worth pointing out the difference between employee loyalty versus employee retention.

Employee retention is the ability of an organization to retain its employees, and the rate at which employees join and leave. As such, employee retention is a statistics-driven concept that measures churn and attrition, rather than the underlying causes.

Fostering employee loyalty, therefore, can be a powerful way to improve your employee retention rates.

Why is employee loyalty important?

As you can likely guess, there are many benefits to boosting employee loyalty at an organization. Chief among these benefits are:

  • More productive employees
  • Better employer brand and corporate image
  • Stronger long term growth
  • Improved retention rates
  • Higher revenues and outputs.

Let’s dig into each benefit of employee loyalty further.

More productive employees

Loyal employees are productive employees. That shouldn’t come as a surprise. An employee who feels a strong sense of belonging and a natural desire to see the organization succeed will ultimately drive stronger innovation, better problem solving, and more valuable outputs.

Often, this drive to improve personally and as an organization manifests into loyal employees evolving into natural leadership positions. Once in positions of influence – whether formal or not – loyal employees can have a positive ripple effect on those around them, heightening team productivity as well.

Better employer brand and corporate image

Employer brand and corporate image are, in large part, created by what current and former employees say and publish about a company. Loyal employees, therefore, are your brand’s best evangelists.

They’re more likely to talk about and promote your brand on their own channels and at events, and are more likely to recommend your company to job seekers.

As more and more loyal employees do that, you will begin to grow an organic pool of content that can be leveraged to frame your employer brand.

Stronger long term growth

Loyal employees tend to stay with the company longer, contributing to the growth and success of the organization. This long term loyalty helps you build a strong skills bench of top performers, and helps you retain valuable company knowledge for the long term.

Because of this, loyal employees and teams are able to continuously push your organization forward, without the disruption of a skilled employee leaving.

Improved retention rates

As mentioned, loyal employees are much less likely to leave your organization than disloyal ones. And if you have enough of them, this will greatly reduce employee churn, lost company knowledge, and productivity disruptions caused by poor employee retention.

Higher revenues and outputs

All of the above benefits of boosting employee loyalty, of course, will help your company where it matters most: in your wallet.

A loyal organization is, by and large, a high performing one. This leads to better client relationships, better growth, and, ultimately, better revenue results.

It’s clear that having loyal employees should be a goal of any organization. What’s less clear is how to increase employee loyalty within a company. Let’s dive into that now.

How to increase employee loyalty

Increasing employee loyalty at your organization starts with understanding why a staff member may (or may not be) loyal in the first place. In general, this breaks down to:

  • Having their back
  • Providing strong communication
  • Providing resources for growth
  • Making them part of the mission and journey

Employees want to feel like they belong, that they’re being supported, and that they’re being heard. Together, these employee needs can either make or break your efforts to foster loyalty.

Let’s dig into some specific examples of how to accomplish this.

1. Be loyal to your employees

Loyalty is a two-way street. If your employees are going to be loyal to you, the organization has to be loyal to them back in meaningful ways. That means:

  • Nurturing relationships and respect between managers and coworkers
  • Dedicating time and resources to ensuring employees are happy and prospering
  • Making it evident that you want the best for your employees
  • Respecting their personal lives and ambitions

This initiative needs to start from the top down, and be supported by each employee in a position of leadership. The goal should be to make it clearly evident to employees that the organization is there for them, and committed to their success and well being.

2. Nurture their potential

Personal and professional growth is a major priority for many employees. They want to know that their time spent at an organization will not only yield a paycheck, but an opportunity to improve their skill set.

It’s the managers job, therefore, to help employees identify their potential and provide the learning and growth opportunities to help them get there. To do that, you should:

  • Call out strengths in your employees
  • Give them projects that relate to their strengths
  • Give them new and bigger responsibility when they’re ready
  • Provide extra coaching and training to hone their strengths

Employers who are using their strength, and working toward their potential with the help of their organization, are much more likely to be loyal for the long term.

3. Be their champion

A manager’s biggest job is to be a champion for their employees. If they’re not, then it’s highly unlikely that their team will form a true sense of loyalty to the company.

Being a champion for your employees means fighting for their best interests, and doing everything in your power to ensure that they are taken care of and given the recognition they deserve.

This includes fighting for raises and promotions, more resources, more important strategic mandates, and the overall well being of the team.

Going to bat for your team will show them that you value them, which will in turn help to create a sense of mutual loyalty.

4. Make their role and impact clear

A loyal employee has a clear idea of what their role is at an organization, and what impact their work has. Without that transparency, it’s very tough for an employee to feel a true sense of belonging at an organization.

To ensure this transparency, leaders should work with their employees to create clear goals and KPIs that roll up to broader company mandates. Additionally, company leadership should make the strategic vision for the organization clear, and demonstrate how each department contributes to that overall goal.

By doing so, you make it evident to your employees that they are part of your future, and are valued teammates along the way.

5. Listen to feedback

Open feedback and radical candor between employees, managers, and senior leaders is critical to the formulation of trusting relationships and loyal employees. Everyone at the organization, regardless of seniority, should feel empowered to provide ongoing feedback about what’s working, and what isn’t.

To ensure that this feedback leads to loyalty, however, you need to do something about it. Ask your employees how you and the company can improve, and what’s missing. Once you’ve received that feedback, come together as a management team to brainstorm potential solutions and initiatives to solve specific issues.

The more you do this, the more it will be clear to your employees that their organization listens to their needs and takes action to remedy problems. This is a strong recipe for loyalty.

6. Prioritize recognition

Recognizing employees for a job well done should be close to the top of your list of strategies for boosting loyalty. Everybody – no matter what job they’re doing – wants to be recognized and validated when they’ve done good work.

Your goal should be to implement an employee recognition program that can scale across your organization to ensure that good work is celebrated when it happens. This could include offering monetary rewards, promotions, time off, or simply public recognition and a pat on the back.

Recognition goes to the heart of why employees go the extra mile for a company. If they do good work, and are rewarded for it, then they’re more likely to continue that trend. The more they are rewarded, and the more the impact of their work is seen, the more they will feel connected and loyal to the organization.

7. Be transparent

Trust is a major factor in whether or not an employee will be loyal to your organization. People want to trust that what you say equates to what you actually do. This is where the importance of strong communication comes into play, especially during times of change.

Not only should you clearly communicate the goals, strategic direction, and values of your organization, you should also proactively communicate deviations from that plan whenever possible. This will ensure that employees understand the reason for changes to the plan, and can pivot their own focus accordingly.

As mentioned earlier, growth, training, and development are all critical to the long term happiness and loyalty of your employees. Most employees want to feel like they’re working toward something greater than their current position or title, and they want to know that their company is helping them get there.

Ensure that everyone on your team has a defined professional development plan with designated budgets. Work with each employee to determine their unique growth goals, and provide coaching as needed to help them get there.

8. Invest in training and development

As mentioned earlier, growth, training, and development are all critical to the long term happiness and loyalty of your employees. Most employees want to feel like they’re working toward something greater than their current position or title, and they want to know that their company is helping them get there.

Ensure that everyone on your team has a defined professional development plan with designated budgets. Work with each employee to determine their unique growth goals, and provide coaching as needed to help them get there.

9. Understand that loyalty takes time

Lastly, it’s important to understand that loyalty to your company doesn’t happen overnight. New employees to your organization won’t display the same level of loyalty to those who have been there for five or ten years.

If your goal is to boost employee loyalty at your organization, you should be prepared to invest in all of the tips mentioned in this article for the long term. Remember: loyalty is not a black and white metric or event. It’s an abstract idea that becomes apparent only after you put the work in to support, nurture, and value your employees.

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