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Why build a loyal workforce?

We have all heard the old adage "a chain is only as strong as its weakest link". But in today's competitive, turbulent business world, it's more than just a cliché.

Recent reports reveal that businesses that outshine their competition are those dedicated to fostering a loyal workforce. As the average job tenure shrinks each year, employees become less committed to their organisation. Companies that experience the negative effects of diminishing employee loyalty, including the financial and productivity losses, are realising the value and potential of a committed workforce.

So what is it about workforce loyalty that gives a business the extra edge? For one thing, loyalty fosters employee retention, which saves companies the time and money used to recruit and train new staff. Research provides an insight on what this could be costing South African companies.

According to the Kelly Group, 1 in 5 workers in SA will voluntarily leave their jobs each year. Deloitte has calculated that the financial cost of recruiting, attracting and training new employees annually can amount to at least 50% of the new employees’ annual compensation. If we assume a monthly salary of R15 000 per employee, that equates to a cost of almost R100 000 per employee that moves on from your organisation.

“When workers feel they have a stake in the business, they tend to be more productive and go the extra mile to benefit the organisation. Loyal, enthusiastic and committed employees also promote a positive company image to customers, and this is reflected in the bottom line,” says Bill Helyar, operations director at Paragon Interiors.

Loyalty doesn't come easy in today's business world. With even executives no longer immune to retrenchments and a rapidly changing workscape, it takes a conscious, genuine effort from management to earn employee loyalty. One key element is the presence of up-close relations between management and staff. Erasing the line between manager and employee is vital if you expect people to invest their time andhard work in the company. This can be achieved by ridding the company of executive ‘perks’, such as management-reserved parking and executive-only cafeterias, and by creating projects that managers and employees can work on together.

“Another solution is to remove the physical divide between upper management and employees by moving to a more open plan office layout. Not only does this send a message that every employee matters but it also means that some of the high-end budgets assigned to executive areas can now be used to create better shared facilities such as coffee bars, quiet rooms and telephone booths to ensure comfort for all staff, “ says Jenny Seddon, partner at Paragon Interiors.

Employee loyalty also requires a strong corporate culture. Management and workers alike must actively create and maintain a company personality that staff can identify with. This might mean conducting orientation programmes to initiate newcomers, planning more company gatherings, or creating workplaces that are fun and inspiring to come to each day.

“We follow a number of international research organisations on workplace trends and culture, and conduct our own research locally with clients. What we have found is that what was previously considered a perk for some businesses is now becoming an expected minimum amongst new recruits,” says Ms Seddon.

“When people come to work they want to have access to the latest technology, they want the ability to work flexibly, including from home. They want to be able to have a great cup of coffee in a space where they can relax and connect with others. One of the main needs people want in their job is to have a sense that they are working towards a greater purpose and somehow making a positive difference in the business,” she says.

Other ways to build loyalty include:

  • Making workers part of the decision-making process
  • Promoting from within
  • Offering shares in the company
  • Recognising staff on their yearly anniversaries

“These methods give employees an incentive to identify with the overall mission of the organisation and contribute to the bigger picture,” says Ms Seddon.

“While loyalty-building strategies may vary among organisations, it is clear that no matter what business you're in, satisfied employees who feel a sense of belonging are more likely to invest their time and effort in improving the company and less likely to walk out the door when a better offer comes around. This is an invaluable asset for any business, and management must be committed to fostering workforce loyalty to truly reap its benefits.”

“As the economy improves and the business world readjusts to the idea that employees again have the power to pick andchoose jobs, rules may change, but one fact remains, a loyal, dedicated workforce is worth the time it takes to build. Dedicated employees provide businesses with an edge over the competition, making success in a rapidly changing world more tangible than ever.”

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