Measuring Employee Loyalty

Employee loyalty is a significant attribute to gain competitive advantage in any organization. Research suggests that retaining and nurturing a loyal workforce has many benefits and protects the organization from several disadvantages.

Compared with the concepts of employee engagement and job satisfaction, employee loyalty is often one of the least appreciated and explored areas of staff employment. Yet, it shouldn’t be given its ability to positively influence productivity, company culture and staff retention rates.

Even in large corporations, it is becoming more difficult to find dedicated employees. Workplaces are finally realizing that employees are more productive when the company acknowledges their needs instead of ignoring them. Therefore, workers who do not feel treated fairly are less inclined to commit to their positions.

However, before we go on to look at that, it’s useful to highlight why staff loyalty is so crucial for a business.

Why is employee loyalty so important?

Given the unpredictability of today’s economic climate, the benefits of having dedicated, hardworking staff that you can rely on is more valuable than ever. This is because in difficult times loyal employees can provide the much-needed commitment and security that a business needs in order to persevere and survive.

In addition, the more loyal employees a company will have the better, as their commitment and enthusiasm can be infectious, positively impacting other staff members and your wider company culture.This can also have a hugely beneficial impact on your staff retention rates, helping you to significantly reduce turnover.

Factors that can affect employee loyalty?

Having got up to speed with the importance of staff loyalty, it’s equally helpful to know what factors can harm it and cause employees to leave, so employers can work on removing as many of these obstacles as you can.

While the mix of reasons will vary from one firm to another, typical factors that can reduce employee loyalty towards a company and cause staff to leave include:

• Low pay
• A lack of work challenges
• Few careers advancement opportunities
• Lack of passion for work tasks
• Poor work-life balance
• Poor employee-manager relationship
• No clarity on the direction of a job role
• No employee recognition

While it’s useful to know what factors can cause disengagement and harm loyalty, it’s also valuable to be able to identify the traits of a company’s most loyal workers.

Generally loyal employees are punctual, do their job well, contribute to the company’s culture and are committed to the success of your company. They are also much more aware of the broader picture of the company’s mission and keen to take advantage of professional advancement opportunities to improve their output. A dedicated employee discusses ideas and provides honest feedback on their own work experience in order to improve your business.

How to measure employee loyalty?

Company awards

Many company awards measure employee loyalty. Although you will have to come up with your own award submission, the questions can help you think about what programs and measurements you have in place to encourage, identify and reward loyalty among your own workforce.

Some awards even incorporate surveys to help you with this. For example, the Great Place to Work award conducts a trust index poll on a company’s behalf as part of the award. The survey includes 58 statements, all of which relate to the workers’ experience of their own work environment. The award also includes benchmarking, so a company can compare their own culture with other organisations. Ultimately, these surveys help provide a deeper understanding of your staff and their loyalty levels.

Staff engagement

Reviewing engagement levels within your own work force, can provide another effective indicator of how healthy staff loyalty levels are within your business. And the most effective way to do this is through running frequent employee engagement surveys.

From getting their views about their job satisfaction, relationship with their colleagues and managers, and perception about the wider company culture, to their opinions about development opportunities, recognition and company benefits. The wide range of areas and questions an engagement survey can cover off, can provide a helpful glimpse into the levels of staff loyalty within the business.

Employee Net Promoter Score (eNPS)

While the first two measures are helpful, by far and above the best way of measuring loyalty is to capture the employee net promoter score (eNPS) metric. This takes a very similar approach to the popular customer-facing Net Promoter Score measurement and is captured by asking your staff the following eNPS question:

“On a scale of zero to ten, how likely are you to recommend our company to others as a great place to work?”

(This is based on the proviso that those closest to zero will be least likely and those closer to ten most likely to promote you)

Once your answers have been reviewed you can divide your staff into the following three groups:

• Promoters – those who rated you a nine or a ten and are considered your promoters.
• Passives – those who rated you a seven or an eight and are categorised as passives.
• Detractors – those who rated you anything between zero and six and are your detractors.

To calculate eNPS, one needs to subtract the percentage of detractors from the percentage of promoters.?

One should now be left with a score of between –100 and 100. Any positive score is considered good, while scores below zero are a warning sign that the company needs to do a lot more about improving loyalty levels among the work force.

There is no one-size-fits-all method for determining employee loyalty in the workplace. However, there are few characteristics or examples of employee loyalty loyal workers that you can easily identify. Loyal employees are punctual, do their job well, and contribute to the company’s culture. There are, nevertheless, a few traits that distinguish a devoted employee from the others, including:

• Speaking up whenever they have differing opinions on situations
• Treating you more like a friend than a boss
• Giving notification in advance of their intention to leave
• Avoiding public criticism of your actions
• Engaging in company advocacy
• Accepting the management’s decision

Employee loyalty is one of the best indicators of employee engagement and shows the firm that it has a committed workforce. As a result, employers have a duty to do all they can to preserve this standard among their employees. While employees can learn competence, loyalty is a trait that only develops with time. You should commit energy to the process and be patient. It will not be long until you have a group of loyal colleagues eager to help you succeed.