Employee loyalty is a vital quality for an organization to succeed, but it’s often underrated and underappreciated. A loyal employee will be much more likely to continue working for your organization for years, or even decades, and won’t be as negatively affected by setbacks or criticism as a non-loyal employee. The question is, what steps can you take to encourage more loyalty in your employees?
Why Employee Loyalty Is So Important
Let’s start by explaining why employee loyalty is so valuable to businesses:
- Lower turnover. The obvious benefit is lower employee turnover. Loyal employees stay with your business for many years, preventing you from needing to search for, recruit, onboard, and train new candidates. This can help your organization continue to run smoothly and facilitate better team building.
- Cost savings. It’s estimated that the cost of losing an employee is 6 to 9 months’ salary; in other words, if you have an employee making $60,000 per year, you’ll face $30,000 to $45,000 in costs to replace them.
- Higher productivity. A loyal employee is a happy employee. If they enjoy their work and are happy in their position, they’ll be more productive. If you have an entire team of productive employees, your organization will thrive.
- Trust and respect. Having loyal employees will facilitate more mutual trust and respect. This attitude will also carry to your other, less experienced team members.
- Client relationships. In many cases, having loyal employees stick with your organization can lead to healthier, longer-lasting client relationships.
How to Incentivize Employee Loyalty
So what steps can you take to incentivize employee loyalty?
1.Years of service awards.
Consider providing employees with regular “years of service” awards. A personalized plaque or similarly tangible reward to commemorate 10, 15, 20, or more years of service to your organization can make a powerful statement about how much your business values loyalty. The award itself will instantly fill the recipient with pride, allowing them to reflect on their time with the organization; it can also sit at their desk, reminding them of their history and encouraging them to continue putting in their best work. Even better, years of service awards provide a great incentive to other up-and-coming employees on your team; many newcomers will aspire to earn similar awards in their tenure with your organization (especially if there are other rewards to be enjoyed).
2.Plaques and other forms of recognition.
You don’t have to wait for a milestone work anniversary to present an employees with a plaque, trophy, or other awards. Consider distributing these types of awards on a periodic basis. Whenever someone demonstrates exceptional work, or goes above and beyond the line of duty, celebrate them with a commemorative award. Or consider giving “best of” awards at the end of the year to recognize your top team members in each of several categories.
3.Accumulating vacation days.
Many organizations also reward and incentivize employee loyalty with a system of accumulating vacation days. For example, you might have 10 vacation days per year by default, earning 1 extra vacation day each year of service after 5 years. So in year 6, your employee would have 11 vacation days. By year 15, they’d be able to enjoy 20.
4.Seniority based incentives.
You can also instate seniority-based incentives. For example, if your workplace requires employees to enter requests for days off well in advance of those days off, you might give your longest-serving employees “first dibs,” allowing them to claim their desired vacation days before anyone else. It’s a nice way to reward your longest-serving employees and an incentive for loyalty among your newer members
Some organizations choose to reward employees with a points-based program, encouraging employees to accumulate points by doing their normal jobs (and demonstrating excellence). For example, you might earn points by working extra hours on tough jobs or by never being late; then, employees can spend those points on items they want, like clothing, tech gadgets, or even incentives like extra days off.
It may seem small and inconsequential, but celebrating birthdays can go a long way in helping your employees feel closer to the organization. The person being recognized will feel special and feel appreciated, and everyone else in the office will have a nice break from the workday. This is hard to manage in larger organizations, where there’s a birthday to celebrate every day, but in smaller companies, it’s especially valuable.
Your employees work hard all year. Why not reward them and foster more loyalty with an end-of-year holiday party? Or holiday events throughout the year to keep their spirits up? If an employee is weighing the pros and cons of a career transition, they might think twice about leaving when they remember how much fun they had at the last office Christmas party.
Some companies reward employees with optional “philanthropic days.” These function much like days off, but they’re designated for volunteering at local charities and nonprofit organizations. Your employees get a chance to give back to their communities in any way they choose, and your organization may see a reputational benefit as well.
Sometimes, the easiest way to improve employee loyalty is to practice more open communication. Give feedback regularly and ask for employee feedback, too. Be transparent about how you operate – including why you make the decisions you make. And be honest and straightforward when answering questions. When employees feel trusted and respected, loyalty is a natural consequence.
10.A mentorship program.
Finally, consider starting a mentorship program within your organization. Your longest-serving employees will have a chance to share their knowledge, experience, and wisdom with some of the younger members of your team; for many, this will feel like a reward. And your youngest team members will get a chance to bond with your highest-ranking employees, making them feel closer and more indebted to your organization.
Are you interested in finding new ways to incentivize employee loyalty in your organization? Check out our vast selection of service award ideas for inspiration. Even a small gesture can go a long way in keeping employees motivated to work hard – and stay with your company for the long haul.