What is employee loyalty?

A loyal employee believes in a company’s values and mission, feels valued and appreciated and plans to stay with a company for a long period of time. When employees have loyalty to a company, they are often invested in its success, work hard to reach goals and feel like they’re making an impact. They often aren’t looking for new job opportunities.

Without loyalty, an employee may feel disconnected from the company’s values and goals and may struggle to focus on their work or engage with other team members. These employees are more likely to actively search for a new job, making lost loyalty a common factor in increased turnover rates.

Benefits of employee loyalty

Employees who are loyal to your company can help improve workplace productivity, both in their own work and that of their peers, because their desire to produce good work can instill the same drive in their coworkers. Loyal employees can also be a great resource for hiring managers because they may identify similarly qualified candidates from inside their professional network.

Workplace loyalty can impact productivity, company culture and the overall success of a business and help attract more qualified candidates to your open roles.

A job seeker searching for a place to apply may be more inclined to select a company that has a good reputation online and in professional networks. Because loyal employees are likely to spread positive information about your company, they can help you attract and hire quality candidates (and possibly even more customers or clients).

Additionally, employee loyalty can save you time and money. Finding, hiring and training staff can take several weeks or months and may come at a significant cost to the company, depending on how many hires are made. A loyal employee is likely to remain with the same company in the long term.

When a company employs a high percentage of loyal employees, they might enjoy reduced turnover rates, leaving more time and money to spend on growing the business rather than filling vacant roles.

Factors that impact employee loyalty

There are a variety of factors that can influence an employee’s loyalty toward your company, including:

• Work environment. Hostile work environments often contribute to a higher employee turnover rate, while a positive work environment filled with passionate, loyal professionals who support one another can encourage employees to stay at a company long term.
• Feeling valued. Employees tend to be more loyal to companies that consistently acknowledge their work and its importance.
• Opportunities for internal growth. If an employee sees that their career goals align with a company’s developmental opportunities, it could encourage them to stay and strive for growth internally.
• Respectful management. A positive employer-employee relationship can increase employee satisfaction and decrease turnover. For this reason, it’s important that those in managerial roles demonstrate respect, kindness and empathy toward their employees. Check out this article for eight effective skills to help you become a better leader.
• Wellbeing and incentive programs. An employee might be more likely to stay with a company that values employee wellbeing and offers a competitive salary and unique incentives like free fitness classes, unlimited PTO or dog-friendly offices.

How to improve employee loyalty at your business

There are many ways to increase workplace loyalty. Here are eight actionable strategies you can try this week to cultivate a sense of loyalty in your employees.

1. Re-evaluate your company culture and work environment

You can help promote workplace loyalty by re-evaluating your company’s culture and the daily work environment. This can mean identifying potential factors that may contribute to loss of loyalty, such as unresolved conflict, unprofessional behavior, micromanagers or inefficient office procedures.

Assessing existing procedures can help you pinpoint barriers to your new loyalty strategies and resolve them to maximize your efforts.

2. Send an employee satisfaction survey

A great way to encourage employee loyalty is to directly ask your employees what they need and want. Do they need extra support from their manager? Do they feel connected to your company’s mission and values? Give them a chance to express their comments, opinions and suggestions before making changes to your procedures.

Consider administering an anonymous employee satisfaction survey that asks your team to rate different environmental factors and how they feel about your company. This can help you gain perspective right from the source and shows employees you’re willing to listen to their ideas.

3. Act on employee feedback

Gathering feedback from employees is an important step toward cultivating loyalty, but it’s often most effective when combined with decisive action. If you’ve administered a survey or collected suggestions from your team, make full use of the information by implementing their ideas.

For example, if your team reports a desire for more one-on-one discussions, consider conducting regular check-ins to discuss an employee’s goals and offer guidance.

While not every suggestion needs to be acted upon, each one provides an opportunity for transparent communication. Being honest about which ideas aren’t feasible and why can demonstrate your willingness to share information with the team, which can also build loyalty.

4. Make promotion opportunities accessible

Another way to encourage employee loyalty is to recruit internally for open positions and leadership roles. This allows your employees to see the number of opportunities for career advancement that are available to them and could discourage them from looking elsewhere for work.

Similarly, consider offering training and development opportunities to help employees meet their career goals without having to find a new job. Ideas include tuition reimbursement, scheduling seminars and workshops and offering job shadowing opportunities.

Investing in your employees can show how you value them, which may incentivize them to stay loyal to the company.

5. Give bonuses or pay raises without employee initiation

By being proactive and initiating conversations about pay raises and bonuses, you can show your employees that you can recognize their unique contributions.

Having these discussions regularly can show employees that fair compensation is a priority for you. With this kind of transparency, employees aren’t left to wonder what their next pay raise might look like.

6. Get to know employees on a more personal level

Although it’s important to maintain healthy boundaries between your work and personal life, taking an interest in your employee’s lives outside of the office can help create camaraderie and build trust.

By asking an employee about their hobbies, weekend plans or family life, you acknowledge them as a person, not just an employee. Making time for bonding activities can offer a fun break from the day’s work and give your team the chance to get to know each other better and to share themselves with you.

7. Offer incentives and company outings

Another way to encourage employee loyalty is by creating a fun work environment filled with incentives and out-of-office bonding opportunities.

For example, you could start a bonus program for employees with the top sales scores or organize a company lunch, work party or a day trip to reward the team’s efforts. By emphasizing a positive work ethic and achievements, employees may feel that their skills are rightfully appreciated and might be more willing to stay with your company.

8. Say thanks

Regularly providing positive feedback and saying thanks for a job well done can go a long way toward making employees feel appreciated and satisfied in their roles.

Try sending employees an appreciation letter or trying out one of these eight ways to recognize your employees. Team members who feel valued by the company can display higher levels of motivation, helping them stay connected to their tasks and leading to greater loyalty.

FAQs about employee loyalty

How do you measure employee loyalty?

Because employee loyalty does not come with a numerical value, it has to be measured in different ways. You can use key performance indicators to assess workplace loyalty by evaluating a variety of factors and combining them under a single analysis. This can paint a clearer picture of your team’s adherence to company values.

Surveys also make useful ways to gauge loyalty. Consider asking employees to rate their own sense of loyalty on a numerical scale to understand where their commitments lie.

What is the difference between employee loyalty and employee engagement?

Loyalty and engagement are both important to any successful workplace, but they are not interchangeable. Engagement essentially refers to an employee’s connection to their work and their eagerness to participate and be part of the group.

Loyalty is more concerned with a person’s attachment to the company itself and the values it stands for. Both are important parts of a healthy workforce, and improving employee engagement may even lead to a boost in loyalty.

How does communication affect employee loyalty?

Openness and honesty are vital in the pursuit of improved trust, and communication is one way to demonstrate your proficiency in them. Good communication comes in many forms, whether it’s setting clear expectations, answering questions directly or creating a safe space for employees to share their concerns.

Effective communication is also an important part of transparent management. A willingness to share information with employees demonstrates your trust in them, which can strengthen their trust in you.