February 07, 2005
Employee Loyalty is Dead!
When did it happen? When did companies begin to treat employees as disposable assets? When did employees begin to ask not what they could do for their employers, but what their employers could do for them?
Was the catalyst for changing the employee/employer contract Jack Welch’s (a.k.a. Neutron Jack) massive layoffs as part of the transformation of GE in the 1980’s? Was it increasing competition from global companies that forced American businesses to change their employee practices? Was it the search for instant wealth during the Internet bubble of the late 1990’s that changed the rules of the game? Was it the aftermath of September 11?
Well the catalyst, in this case, doesn’t really matter. Businesses need to create the circumstances within their organizations and communities that motivate and inspire workers to give their best . . . even if they are not going to be employees for life. Research on the millennial generation, for example, shows that they are expected to have, on average, 9 jobs by the time they are 35. Does this make them less loyal or committed? By traditional notions of what loyalty and commitment mean, perhaps. But length of stay and productivity at work are not necessarily the same thing. How many people have you worked with that have effectively retired on the job?
What does matter is that drivers of employee commitment and loyalty are changing and organizations need to adapt to new employee expectations. For example, the Millennials seem place as much emphasis on the community in which the job is located as the job itself. Issues like the health and vitality of the community, healthy lifestyles, community service, diversity and artist communities are becoming increasing more important to getting the next generation to consider your community, let alone your company.
Studies conducted by the Center for Effective Organizations at University of Southern California showed that in 2002, companies with highly committed employees outperformed (based on ROI) other companies by 100%. In simple terms, the more employees are involved, the more committed they become. And the more committed the employees, the better the economic performance. Some of the best practices of these organizations are:
1. Creating an environment of open communication between employees and management
2. Helping employees overcome obstacles to greater involvement at work
3. Soliciting employee ideas about work improvements
4. Delegating decision-making to the lowest possible level
5. Encouraging employees to manage and direct their own careers
The impact of the globalization of business means that businesses have more opportunities and more competition. With opportunity comes uncertainty. And this uncertainty means that the traditional employer/employee contract (i.e., job security, career advancement, etc.) is a thing of the past. That doesn’t mean the employee commitment and loyalty have to be a thing of the past. Companies that provide interesting and challenging work, develop their people, and engage workers in improving the business are likely to have a highly committed workforce, even if they don’t plan on being their for life.
Posted by Greg Robinson at 02:41 PM | Comments (5)
