No matter what kind of business you run—big, small, corporate or startup—it pays for your employees to be loyal. At the very least the financial implications of recruitment and training are significant enough to damage your overall profits.
But you’re not automatically entitled to loyalty from your workers; it’s something you have to cultivate and nurture with time. Loyal employees are more pleasurable to work with, but they can also help your business grow and develop. Without the cumulative drive of a dedicated team, your business won’t last long.
Here are the most important reasons you should be focusing your efforts on cultivating loyalty in your employees.
Millennial workers want a better work/life balance
Many employers struggle with the millennial approach to work, prompting CBI and Pearson to publish a report which showed one third of employers are “unhappy” with their graduate workers.
One employer said, “they simply don’t have the same loyalties that were expected in the past.” This could be down to many reasons, but some speculate that millennials are less likely to see themselves working for one company for an extended period of time and have an attitude that reflects this.
All businesses will need to hire millennials eventually to keep them going, and when they do it’s crucial that they do whatever they can to engender the kind of loyalty required to retain them. The best way to do this could be to adjust your business practice to the new graduate mindset.
For example, graduates are likely to want the perfect work/life balance from their employers just as much as they want good career prospects. A survey by Accenture found that 59% of graduates would prefer a positive social atmosphere at their workplace than a higher salary. These are just two examples of where businesses need to take a fresh look at how to offer employees incentives. A simple pay rise may not be enough to keep a graduate on the team.
Employee turnover wastes time and money
Though a small level of staff turnover is naturally expected, having to find, hire and train new staff is a costly drain on resources. As Forbes says, the real cost of hiring a new employee is “much more than their salary.”
For small businesses in particular, this supremely important, as there is not always the scope to use limited resources on training new staff. In other words, if too many people quit, a small business could collapse.
The only thing that can stop a high employee turnover is encouraging more company loyalty in your employees. Give employees a reason to stay, or, even better, multiple reasons. It is far easier from an economic perspective to spend a little time or money now on keeping current employees satisfied than it is to search for and hire new ones.
Loyal employees will work harder, and smarter
So far we’ve explored how employee loyalty can help your business avert disaster, but its most important benefit is in helping your business thrive.
When employees are loyal to their workplace, they will be more willing to invest in their work, innovating new ideas and going the extra mile. Loyal employees are happy employees, after all, and as Forbes reports, happy employees mean “hefty profits”.
The link between employee satisfaction and productivity is long-established. Pret a Manger attributed a massive increase in sales to happier employees. Some have attempted to measure the link, with one study finding that happy workers are 12% more productive than their less satisfied counterparts.
Skilled but disloyal employees could join your competitors
There is nothing worse than hiring a new recruit, training them up to excel in what they do, only for them to leave and put their good skills to use for a competing business. If this happened too frequently, your company could essentially become a training ground for your competitors, meaning they don’t have to carry out training procedures, putting you at a huge disadvantage.
Make sure your new employees have reasons to stay at your business once their training is complete. These can be anything from leadership prospects to stock options. Whatever you do, loyalty is key.