Want to Build Employee Loyalty? Focus on Culture, Not Cash.

by Erik Fassnacht
March 18, 2021
Employee Loyalty
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Loyalty is the linchpin of our most cherished institutions. It is a hallmark of success in relationships, global organizations, and businesses of all sizes. Without loyalty, lasting growth can seem out of reach. With it, the sky’s the limit. Yet despite the overwhelming importance of loyalty, bottling such a critical ingredient remains an elusive task, particularly in the workplace.

More importantly: loyalty cannot be bought.

A 2019 study from O.C. Tanner revealed that while 89 percent of employers think their employees leave because of money, in actuality only 12 percent leave for financial reasons. Furthermore, a separate study by Speakap found that more than half of all employees would move to a competing firm in search of a better culture, and 48 percent would work a 60-hour week in exchange for a better culture. For many, culture was the deciding factor for remaining loyal to their place of employment.

So what does it take to foster happy and engaged employees who choose to stay with their companies for the long haul? Two things are clear: loyalty must be earned, and company culture is the proving ground. While there is no one-size-fits-all formula for earning employee loyalty, we checked in with three savvy tech companies who claim to have achieved incredible levels of employee satisfaction and retention, and let them share their ideas for crafting a culture that earns the trust and admiration of the workforce.

We learned that with key programs and support in place, employee loyalty can be carefully developed over time, and then harnessed to create an exciting future for everyone involved.

 

David Andresky
Director of Software • Mersive

When it comes to building employee loyalty, Mersive has put empathetic and supportive systems in place to achieve a remarkable level of employee connection and retention, said David Andresky, director of software. He focuses on the power of emotion, environment and empowerment to keep employees fully invested and committed to Mersive for the long haul.

 

What is the key to developing employee loyalty, and what does this look like in action?

The key to developing employee loyalty is to understand that loyalty is an emotional response, not a logical one. Employers must focus on an environment that fosters positive emotional outcomes in the workplace. There is no one-size-fits-all approach, as each person is different. However, there are very effective behaviors and environments that involve empowerment, support, communication and respect. 

Empowering employees fosters a sense of ownership and worth. Top-down management approaches where day-to-day decisions are made from senior leaders can result in disengagement and apathy. Empowerment without support can lead to a lack of trust. Effective two-way communication and mutual respect can reduce conflict and produce more positive outcomes.

Loyalty is achieved when employees feel energized about their work, are empowered to make decisions, and are supported by their managers. Senior leaders who recognize and focus more on creating such an environment can achieve a high degree of employee satisfaction and loyalty.

 

The key to developing employee loyalty is to understand that loyalty is an emotional response, not a logical one.


What impact has employee loyalty had on your business over the years? 

As organizations grow and evolve, they invariably develop a high degree of tribal knowledge. Effective documentation and process control can mitigate this to some degree but cannot eliminate it entirely. When there is low loyalty, there is high turnover and loss of that tribal knowledge. For 20 years I worked at an organization that grew from a startup to a billion-dollar company. In the early years we were a very top-down driven team, and as a result we experienced a great deal of turnover and our annual employee surveys generally had very low marks. In 2010, I moved my teams to more of a scrum model, empowering the teams and taking on a more servant style of leadership. I improved one-on-ones and team-level communications and as a result, we experienced nearly 50 percent improvement in employee satisfaction and far less turnover.

 

Naeem Ishaq
Chief Financial Officer • Checkr

Naeem Ishaq, CFO of Checkr, builds employee loyalty through an integrated system of personal development, authentic communication and career support, and rewards employee investment with exciting internal opportunities that result in unique levels of growth.

 

What is the key to developing employee loyalty, and what does this look like in action?

The key is building a trusted and authentic connection with all of your employees. They have to know that you are there to help them achieve their goals, support their development, and both provide and receive direct, honest feedback.

 

The key is building a trusted and authentic connection with all of your employees.

 

What impact has employee loyalty had on your business over the years? 

Employee loyalty is critical to helping a company grow while also maintaining its unique culture and values, which in turn enables further growth. A great example of this is our VP of Financial Operations, Todd Freedman. Todd joined Checkr over four years ago and was one of our early employees at our HQ in San Francisco. Todd has grown with Checkr over the years and was encouraged to take on many different responsibilities, including establishing our HQ2 in Denver. He moved from San Francisco to Denver with his family to boot up operations here and provided a bridge to our roots in California. Without his loyalty and commitment, I’m sure our efforts to establish our presence in Denver would have been less successful.

 

Bronny Jacobsen
Head of People and Culture • Cin7

According to Bronny Jacobsen, head of people and culture at Cin7, trust is the most important foundational factor with which to build employee loyalty. With that foundation in place, a unified purpose and shared vision can arise, thus unlocking long-term employee loyalty.

 

Whats the key to developing employee loyalty and what does this look like in action?

A common purpose, alignment of values and a mutually held vision are three of the keys to building loyalty. It grows when each person knows exactly how their unique contribution impacts the result, and that their specific effort was worthwhile and valued.

But any type of real loyalty has to first be based on a foundation of trust, which is true both personally and professionally. Trust in a workplace means a commitment to ongoing, authentic communication, even when it’s not comfortable. It’s seen in humility and accountability as things are tried and don’t work out. It’s evident in non-hierarchical, robust collaboration where everyone is heard and no one is blamed. It unlocks as we show appreciation and make time for celebration. 

Trust is not a one-sided transaction, however. Companies need to be deliberate in spending time and expense on each person to help them move closer to their own personal dreams and goals. Trust is the ingredient that frees people daily to bring themselves to their work environment without reservation. When these behaviors become part of a company’s DNA, consistently and deliberately, loyalty becomes superglue!

 

Trust in a workplace means a commitment to ongoing, authentic communication, even when it’s not comfortable.

 

What impact has employee loyalty had on your business over the years?

Pressure always shows the cracks, but it also brings out the gold. 2020 was tough for the world as we all had to navigate the unknown both personally and professionally. We saw our people rise to the challenge magnificently, and they continue to do so. They looked out for their teammates and volunteered to do more even before it was asked. We kept the transparency of communication throughout, and the focus clear. Our team delivered despite the odds and served our customers with professionalism and understanding as they too went through their own journeys.

We have team members who have been with the company since it was a startup. They saw the potential and worked second jobs just to be a part of the adventure, as so many do. The resilience and muscle built up in those early years, along with the obvious IP and long-standing customer relationships, brings a wealth of resources to those who are newer to the team. They carry the torch when times are tough because they have first-hand experience of what is possible.

 

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