Gone are those days when an employee joins an organisation and retires from there. A study conducted by the US based renowned research organisation Gallup reveals that, the millennial generation—born between 1980 to 1996—has a higher reputation for job hopping. The study shows that this particular generation is three times more likely to change jobs than the others.
Around 91 percent of the millennials do not expect to stay with their current employers for more than three years. Almost half of them strongly agree that they plan to be working at their company one year from now. That’s a significant number.
For the organisations the message is very clear -- 50 percent of these young talents do not see any future with their present employers. Although the study was conducted in the US, experts are in consensus that the situation is more or less similar elsewhere as well.
It was also evident that, 60 percent of millennials are open to a different job opportunity -- 15 percentage points higher than the percentage of non-millennial workers who say the same.
Millennials are also the most willing to act on better opportunities: 36 percent report that they will look for a job with a different organisation in the next 12 months if the job market improves, compared with 21 percent of non-millennials who say the same.
One might ask, why this generation changes job so frequently? There are, of course, several reasons. However, one point is highly noticeable, they are the least engaged employees in the workplace.
Data suggest that, only 29 percent of the millennials are engaged at work which means only one out of every three are emotionally attached to his or her job and to the company.
The most worrying part is 16 percent of millennials are actively disengaged which implies that these employees are more likely to do damage to their respective organisations.
Question would naturally be asked that how does this huge employee turnover impact an organisation? Believe it or not, according to the study, it costs the US economy $30.5 billion annually. If we extrapolate the number from a global perspective this would easily be crossing $50 billion.
This cost includes recruitment cost for the vacant positions and training and development cost for the new employees. That’s a staggering number, right? Another critical aspect of the disengaged workforce is, lack of energy and passion for the jobs.
These employees simply show up to put in their hours. No wonder, successful organisations are now seriously thinking to make sure that the talents remain with them.
To face this challenge, we need to understand the employee loyalty concept holistically. A loyal employee is the one who works for the success of the organisation. Loyalty has certain elements like devotion, faithfulness, bonds, cares and responsibility.
Loyalty is a two-way traffic meaning both the employee and the organisation are party to nurture loyalty. If an organisation wants its employees to be loyal, obviously it has to create an environment where the employees feel respected and get the opportunities to unleash their potential.
Study suggests, even the millennial generation does not necessarily want to switch job just for the sake of switching, rather they do it as their present employers often fail to provide them compelling reasons to stay.
There have been number of studies conducted across different parts of the world clearly outlining the importance of employee loyalty. Let’s now focus on how organisations get benefits out of employee loyalty:
Loyal employees are the most engaged employees and they naturally show up every day with full of energy and with a sense of purpose. It was revealed in a study that; highly engaged teams generate 21 percent more profitability.
Productivity goes up as absenteeism from work reduces by 41 percent.
It was also found that customer loyalty has positive correlation with employee loyalty. Loyal employees consider organisation’s success as their personal success; therefore, they always go extra miles to make sure customers are satisfied and remain with them. Anne M Mulcahy, the former CEO of Xerox, once commented, satisfied employees mean satisfied customers, which leads to profitability.
In case of high employee turnover disruptions naturally happen in day to day operations and as a result, customers get dissatisfied and there is a high possibility of opportunities might get lost.
As the loyal employees always go extra miles, naturally the organisations often come up with innovating ways of managing things.
Organisations which are known for employee loyalty attract more talents. So, what should be done to maximise employee loyalty? Here are few important points to be focused on:
Competitive compensation and benefits: The number one reason why the employees change their jobs is fair compensation. A competitive salary and benefits make employees more likely to stay in their jobs long term.
Career development: Research findings suggest, employees who progress in their career timely are 20 percent more likely to stay with their organisations. To ensure employee acquires required skills to move along in their career growth organisation must focus on training and development.
Engagement: Employee engagement initiatives result in positive impact on job satisfaction. When the employees feel they are an integral and essential part of the organisation they certainly feel honoured and resultantly they become more loyal.
Appreciation: A culture of appreciation in any organisation makes a healthy and happy working environment. According to a recent study, 22 percent of workers who do not feel recognised despite doing good tend to switch job.
No wonder employees are the best assets for any organisation and loyal employees are becoming scarce now-a-days.
Doug Conant, a well-known business leader, appropriately said, “to win in the market place, you must first win the workplace”. Organisations have to put in their best efforts to make their employees loyal.
Famous management guru Stephen Covey has the mantra, “always treat your employees exactly as you want them to treat your best customers”.
The writer is the chairman and managing director of BASF Bangladesh. Views expressed here are personal.