Why Employer-Employee Loyalty Is No Longer a Thing
Ravi Subramanian
Global SVP/VP of Talent Acquisition | Founder & President Chicago Recruiting Forum, Inc. | Board Member | Fractional TA Leader | TA & HR Transformation | Agile Talent Solutions | Strategic Counsel | Mergers & Acquisition
As I have traversed through my professional career, one thing that has become evident is that the traditional notion of lifelong employment at a single company has become increasingly obsolete in today's workforce. This shift away from employee and employer loyalty is a fundamental transformation in the relationship between workers and employers, driven by several factors.
The End of the Social Contract
For the longest time, in exchange for loyalty and dedicated service, companies provided job security, pension plans, and predictable career advancement. This social contract began eroding in the 1980s with widespread corporate downsizing and has now for the most part disappeared. Today's workers have witnessed their parents and colleagues fall victim to layoffs despite years of loyal service, teaching them a crucial lesson that corporate loyalty is often a one-way street.
Economic Realities of Modern Employment
The financial implications of job-hopping versus staying loyal are telling.? The recent trend indicates that workers who switch jobs typically earn 10-20% more than those who remain with their current employer. Moreover, internal promotion paths have become less clear and more competitive, and many companies have replaced pension plans with 401(k)s, removing a major incentive for long-term employment. Lastly, annual salary increases often fail to keep pace with inflation, effectively reducing purchasing power for loyal employees
The Rise of the Gig Economy and Remote Work
Digital transformation has fundamentally altered the employment landscape where remote work has expanded job opportunities beyond geographical boundaries and gig economy has normalized flexible and temporary working arrangements. More recently, project-based work and fractional roles have become increasingly common across industries.
Changing Workplace Values
Younger generations enter the workforce with different priorities where personal growth and skill development take precedence over company loyalty. Purpose and meaningful work matter more than institutional stability and work-life balance is non-negotiable. From an employer perspective diversity of experience is valued over length of service.
The Impact of Corporate Behavior
Recent corporate actions have further eroded the foundation of employee loyalty given the mass layoffs during profitable periods, the replacement of full-time employees with contractors to reduce costs, diminishing benefits packages and increased use of non-compete agreements while expecting employee flexibility. Moreover, companies rely on cheap ways of enticing employees to come work for them in the name of culture – pizzas and tacos do not make the culture but a set of good values and true appreciation for what value the employee brings do.?
The New Professional Paradigm
Instead of company loyalty, workers now prioritize personal brand development, acquisition of transferable skills, building networks that transcend beyond work, portfolio career management and work-life integration.
Adapting to the New Reality
For both employers and employees, success in this new environment requires a different approach:
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For Employees:
Continuous skill development
Active professional network
Regularly assess market value
Stay prepared for transitions and be ready to pivot
Prioritize personal growth over company tenure
For Employers:
Compelling reasons for talent retention
Offer continuous learning opportunities
Competitive compensation packages
Foster genuine work cultures that prioritize inclusion and employee well-being and not a superfluous pizza or taco day
Accept and plan for higher turnover rates
In closing, the decline of employee loyalty isn't a reflection of worker fickleness but rather a rational response to modern economic realities. Today's professionals must prioritize their own career development and well-being, as companies have repeatedly demonstrated that loyalty alone won't guarantee security or advancement. This new dynamic, while potentially challenging for organizations, ultimately creates a more honest and equitable relationship between employers and employees.
The future of work will likely continue to evolve away from traditional loyalty-based relationships toward more fluid, project-based and fractional collaborations. Success in this environment requires both workers and companies to embrace this new reality and adapt their strategies accordingly. Rather than lamenting the loss of employee loyalty, forward-thinking organizations should focus on creating environments where mutual benefit, not blind loyalty, drives the employer-employee relationship.
Organizational Psychologist | Certified Health Coach | Nutrition Nerd | Here to find smart, fun friends & companies that care about employee health and well-being
2 周Such funny timing for this Ravi Subramanian; I was just thinking about this same topic but with a somewhat different twist... What if, as an employee, you HAD to stay with your same company? Let's call it 10 years to give it a timeframe. And what if, as an employer, you HAD to keep the same people for 10 years? How would each approach development and balance and well-being differently? For the sake of this thought experiment, let's ignore the group that may not work much at all because they feel they're "safe" for 10 years. Or the leaders who feel employees are "lucky" to have the job and therefore aren't concerned with engagement. We know those attitudes exist but those aren't the groups I'm interested in. If you knew you "had" to stay, how would you approach work differently? Would you be more inclined to contribute to the culture in a more intentional way? Leaders, if you knew you "had" to keep the same people, would you be more inclined to invest in their development? Curious what comes to mind for others on this one. Thanks for the post Ravi!
Interim & Fractional People Director | HR Strategy Consultant | Business Transformation | AI for HR | DEIB
3 周Such good points, particularly that employees will be smart to pay attention to their own wellbeing, continuous career value (right experiences, skills) and network. So they’re in a good place to make a move when they need to or want to. But also feel more empowered in the job you’re at.
Chief Executive Officer | High-Performance Team Builder | Organizational Growth Driver
3 周Well said Ravi. Organizations are not humans. They are not bound by the notions of "trust" or "connection." They are bound only by contracts and the enforcement of contracts. Any person today who offers loyalty to an organization, any organization, is setting themselves up to be disappointed and eventually fall into the same trap of everyone who resists change... lamentation.
Senior Account Manager at Appcast, Inc.
3 周Spot on Ravi! I’ll add that it’s not just the younger generation learning this, I’ve been doing it for 25 years. Why would a rational person stay at a job with a 3% raise yearly when you can increase your salary $15k+ overnight by taking another offer? To me it never made sense, esp when, as you noted, you can be the best at your job and still be subject to a layoff. Coming from parents who spent lifetimes at the same companies, it’s been a subject of conversation (arguments, really lol) in my circles for a long time, bravo on putting all this in writing! ????