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LONGREAD: loyalty in the age of LinkedIn

Employee loyalty is not what it used to be. In fact, it’s been declining for several years.

Research from PwC 2014 found Australia was one of 11 developed countries where loyalty appears to have had its day. The study found 23 per cent - nearly one in four new employees in Australia - leaves their job within the first 12 months.

"The loss of loyalty has been exacerbated by the amount of choice and the technology of LinkedIn, Monster, CareerBuilder and Craigslist."
Leon Gettler, Veteran and highly regarded management journalist

According to Deputy the problem is generational. Baby boomers were more likely to stay in the job for 19.7 months and Gen X slightly less at 15.3 months. But Gen Y left after nine months and Generation Z were out the door within 7.6 months.

In an age when no one expects lifetime employment, employee loyalty is a lot more difficult to create. And yet, employee loyalty is not completely dead and that is the challenge for managers. How do they create loyalty in a post-loyalty world? 

Colloquially, workplace loyalty started fading during and after the global economic downturn in the 90s when companies began restructuring and shedding jobs.

The ‘job-for-life’ ideal disappeared and job security depended on how useful a person was to their employer and a new industry, outplacement, was created.  The result: a workforce more cynical and restive.

Add to that the impact of Gen Y (ages 19 to 36) who are not loyal to any one company and who see their career and their brand as one and the same.

More than two decades later, the loss of loyalty has been exacerbated by the amount of choice and the technology of LinkedIn, Monster, CareerBuilder and Craigslist providing ‘robo’ job offers.

The grass now seems permanently greener on the other side of the fence.  Is it?

EXPECTATION

Some companies have a workforce with a cult-like following. Walk into an Apple store, for example, and you are greeted by a concierge with an iPad who directs you to a spot and then contacts someone from the Genius Bar, Apple’s expert assistance service, telling them you’ve arrived.

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Pictured: Geniuses. PHOTO: Shutterstock

The annual retention rate for Geniuses is almost 90 per cent. That’s unheard of in the retail industry. Apple has a fan base ensuring a steady supply of job applicants.

This base has in turn has created an employee culture which turns every job into a mission. This allows Apple to pay its employees a modest hourly wage and no commission.  Yet they remain fiercely loyal, like they’re on a mission.

Margaret Harrison, managing director of Our HR Company says the concept of loyalty might be dated. People are now simply too cynical with the job for life gone. Most people had been made redundant at one stage in their career.

“I don’t think it’s talked about any more,’’ Harrison says. She says often engagement levels have nothing to do with loyalty.

“You can be engaged but not loyal,’’ she says. “You can be absolutely engaged but if a new job comes around the corner, you will be out the door.

“Your dog is a loyal friend but I don’t think you can expect your employees to be loyal.”

Matthew Gribble, regional managing director at Michael Page, is not sure about that.

“I’m not sure if the concept of loyalty is dated or it’s just evolved,’’ Gribble says. “Loyalty to me is a two-way thing. People aren’t blindly loyal to organisations because that’s where they started work.

“Maybe in the past they were. But people are loyal to organisations that are loyal to them, which means they are investing in and developing and helping them get a better career and life. If you keep doing that you stand a much better chance as an organisation of retaining staff.”

Gribble talks of taking take people beyond their immediate job. Getting them involved in community activities and focusing on training help keeps employees for longer.

“Like any company, a high proportion of our staff are in their mid to late 20s and I would say some of the most successful strategies we have employed over the last 12 months would be the CSR (corporate social responsibility) side of what we do,’’ he says.

“We have become a partner with the Smith Family and people are running races to raise money and doing various events within our business. We do things like go and help the Smith Family deliver hampers to disadvantaged families so people really buy into that a lot.

“Programs like that help build a culture that people want to be part of and go beyond people just doing their job. That’s been a big plus for us from a culture perspective and therefore a retention perspective.”

TRAINING

Training staff is important too - not for their immediate jobs, but for furthering their careers, giving them the skills they can take anywhere. When employees see the company has invested in them they are more likely to stay.

“The generation that’s coming into the workforce want to know with real clarity where they can head to in the organisation in terms of progression and promotion, how they get there and to see we’re providing them with the resources to help them get there,” Page says.

“So there is a big focus on something that helps us retain people because we run a strong training and development program.

“That would be something organisations can do well to help their retention, by demonstrating to staff there’s an investment in upskilling and making them better professionals and better leaders.”

Gribble says all companies need an employment value proposition (EVP) which sets out what the company is about and what the employee can expect. A failure to do this can lose you staff.

“A lot of people leave organisations not because they’re not loyal but because they joined the wrong place,” Gribble says. “If you clear about your EVP about what you offer people as an employer then you’re more likely to recruit people that want to be part it.”

STRATEGY

So are there any special strategies companies need to deal with as Gen Y and Gen Z are offered more money and opportunities?

Andrew Morris, director of Robert Half Australia, says Gen Ys chronic job hopping is a myth.

“I speak to a lot of people gen X, gen Y gen Z,” Morris says. “Personally I don’t buy into that because having worked in recruitment for 14 years and it doesn’t matter which era you are looking into, there has always been job hoppers.” 

There seems to be a micro-analysis on some people who job hop, he says.  There are people who are 20, 30 and 40 who are very loyal and happy in organisations – but there are those who are not as well.

“As many people job hopped 15 years ago as they do today, there is just more of a micro focus on it,” Morris says.

One of the problems, he says, is companies often hire the wrong sort of people and are not putting enough due diligence into their recruitment.

“You have got to hire the right people who will be engaged in your product and your culture and what you stand for as a business,” Morris says.

A big part of that is looking at retention rates over different time periods.

“When I am talking to senior managers, one of the things I tell them they need to look at is how many people leave within the probation period,” Morris says.

“If people leave during the probation period, it means you’ve hired the wrong person, a person who isn’t right for the job and the job isn’t right for the person.

“Therefore, that comes down to you hiring the wrong profile, not going through the right process. That should be very minimal in any organisation.”

At the same time, some people are just not made for the job – you can’t expect them to be loyal.

“Think of yourself as an athlete. If you concentrate on being in the top 20 per cent of your team, you’re a person the organisation doesn’t want to lose because you produce results. You become an integral cog,’’ Morris says. “If you don’t work to be in the top 20 per cent, then you could be commoditised.”

“If you’re a person the company needs and you work hard and you have the right work ethic and you have the right skills and those skills are difficult to replace, the power will rest with you.”

The company, he says, needs to conduct exit interviews and monthly or at least quarterly performance appraisals. Most Australian businesses do that poorly.

“That has been an ongoing issue. What a lot of companies fail to do is actually sit down and have meaningful conversations with their staff on where they are at in their career, how they are developing, what training and education they need to get to the next level,’’ Morris says.

“Those conversations are not had, ignored or done in such a way they’re very fast and furious. Many companies do them poorly or don’t do them at all.”

Morris says it is vital for managers to catch up with each of their direct reports often to discuss performance, company performance, innovation, anything. The key is to have regular communication.

“It could be monthly, it could be quarterly but it can’t be anything outside of that,” he says. “It’s too long. If you only get one opportunity a year to discuss how you’re really feeling, there’s a lot of pent-up angst by the time you get there.”

Leon Gettler is a freelance journalist

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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