Saturday, 9 January 2016

Employee’s Loyalty: Can Be It Still Regarded As An Individual Significant Value?

Once upon a time there was a psychological contract, underpinned by the idea of “a job for life”, according to which employers offered their employees a sum of money in exchange for their loyalty and contribution to organizational success. The content of the psychological contract has ever since been subject to a slow but unrelenting evolution. At first, to meet individual wants, employers started to gradually replace their compensation arrangements with reward packages programmes, that is to say pay schemes based on appropriate combinations of financial and non-financial rewards; then individuals increasingly began to establish expectations about career prospects and opportunities for professional development and growth. More recently, employees have concentrated their attention on gaining additional skills and competencies, and on considerably expanding their knowledge and expertise, with the ultimate aim of increasing their marketability.

Increasing employee marketability, notwithstanding, more than favouring individual’s loyalty is likely to favour employee mobility in the labour market. It could be thus contended that whereas the original version of the psychological contract essentially aimed at fostering individual’s loyalty, it tends nowadays to ease employee transferability.

With respect to this point, employers seem to take an ambiguous position. They are aware of the circumstance that retaining employees in general and talented individuals in particular represents a daunting feat to perform. Individuals attach great importance to broadening their experience so that many employers have introduced internal and international mobility programmes within their organization, with the ultimate aim of retaining their talents. On the other hand, nonetheless, organizations constantly seek talented individuals in the relevant labour market and offer them generous reward packages and career prospects. The former activity clearly supports loyalty, whereas the latter definitely plays a detrimental role in this respect.

Whilst some individuals, especially young people, literally struggle to find a job, some others find it relatively easy to change job rather frequently. It is not thus uncommon for talent acquisition specialists coming into contact with individuals whose résumé contains an employment history clearly showing that these candidates change employer very often and sometimes even too often. Organizations, nonetheless, are usually keen and enthusiastic to recruit these individuals, sometimes with a pinch of satisfaction for the candidate acceptance of their offer, overlooking that whether an individual has easily and heartlessly left his current employer for a more attractive reward package this might do it again and again in the future. It clearly depends on how the person will fit in at his/her new company, but it regrettably also depends on the opportunities which other employers may offer to the individual. In the incoming future, the new employer might hence turn to be victim of this individual behaviour, too.

Whether the one size does hardly fit all in general, it definitely fits even less all in this instance. Individuals may leave their employer for countless reasons so that it sorely depends on the circumstances; organizations cannot be wary of candidates only because these change employer frequently. The first step to take in order to favour individual’s loyalty is never ever making promises which might be hardly kept, describe the workplace and the role differently from what these actually are and undertake unrealistic career prospects.

Individuals are increasingly keen and eager to broad their knowledge and gain valuable, useful experience. Yet, employees are growingly fascinated by the idea of working in an international environment and of being offered the chance to move abroad for short and long assignments or even permanently. The generous reward packages and the more favourable terms and conditions of employment habitually offered by the new employer, nonetheless, clearly do also play a role in individual decisions to leave or stay with an organization.

People who often change employer dramatically increase their marketability; their résumés look typically impressive and especially whether their marketability has been gained in renowned organizations, their chances to receive new employment offers grow significantly. These individuals are essentially “trapped” in somewhat of a virtuous circle: more frequently they change their job, more considerable, valuable and wider their experience and more numerous their chances to receive new job offers from different employers. More often than not, these individuals do not even need to look for a new opportunity, but just await recruiters to find them. Social networks are powerful from this point of view; many recruiters incessantly look for passive candidates, that is to say individuals who are not actively searching for a new role, but who would be sorely interested in new good employment opportunities whether offered to them.

It can be argued that, by actively looking for active and passive candidates and making these attractive employment offers, employers in many respects encourage and favour competition in the labour market to the detriment of employee’s loyalty, which may be no longer perceived by employers as an individual asset and consequently by applicants as something to be proud of. Whereas in the past job seekers tended to limit the number of employers listed in their résumés, eventually extending, according to the role filled, the length of employment with those considered most relevant to the position they were applying for, this does no longer occur nowadays. Recruiters in fact, unless of conspicuous exaggerations, tend to pay lip service to the quantitative aspect of past employment. By contrast, in some instances this seems to add value to the overall quality of the curriculum vitae in that the considerable number of records contributes to depict the candidate as a person who has gained a broad experience in different contexts and under different circumstances.

Employees aim at gaining new experience and broadening their knowledge, and relentlessly look for new employment opportunities enabling them to attain their objective. Employers on the other hand unremittingly search for people who have gained a relevant and considerable expertise under different circumstances and in diverse organizational settings, preferably in countries with different cultures. It can be hence inferred that employers are perfectly at ease with résumés rich of employment records; perhaps in that each employer labours under the illusion that things will work differently in its case.

Can be therefore contended that employee’s loyalty is no longer regarded by employers as a significant employee value? Definitely not, the costs associated with recruiting external candidates, especially talented individuals, are definitely high. Yet, the risk that after having left the organization an individual might continue to use the information gained during his/her previous employment relationship is considerable. All in all, employee’s loyalty can and should be thus still considered by employers as an individual significant and desirable trait.

Employee’s loyalty seems to be destined to stay high at the top of employers’ and HR professionals’ agenda also for the years to come. Corporate loyalty seems in fact not to be perceived as an important value by Millennials. Whereas some studies show that Generation Y represents the most loyal generation to their favourite brands, the findings of several investigations of a different type, conducted over the last years, reveal and confirm that the majority of Millennials do not regard employer loyalty as a value and let alone as a priority.

The results of the different surveys, both as regards the rate of people claiming to have plans to stay or leave their employer and the idea Millennials have about loyalty, are at times sorely conflicting. Yet, some remarkable divergences also emerge when comparing the answers provided by Millennials and HR professionals to the same questions. Notwithstanding, these studies at large suggest that these individuals are mainly interested in work/life balance, professional growth and success, career prospects and in pursuing personal interests. Millennials appear to be resolute and ruthless in the accomplishment of their purpose and seem to have no hesitation in leaving their employer whether this cannot ensure them the attainment of their objectives and the fulfilment of their aspirations.

To enhance employees’ loyalty, employers should invariably take heed of all of these individual wants, which are not exclusively typical of Millennials, but rather of all of today’s employees, and should hence constantly adapt their human capital practices so as to meet their expectations and needs. The real problem is that nurturing employee’s loyalty proves to be a daunting task to perform for every employer.

The most effectual approach to encourage and foster individual’s loyalty in the workplace is arguably that to timely plan and favour employee development and growth from within the organization. Nonetheless, not all of the professional and strategic roles within a business can be actually developed internally, whether there are no employees having the basic attributes so that this approach cannot be invariably adopted irrespective of the circumstances and roles. Moreover, regardless of the way individuals fit in their organization, these might sometimes find it objectively difficult to resist the temptation to change organization, colleagues, workplace, location and corporate culture. Whether on top of this it is also offered them an attractive reward package, it is virtually impossible for individuals do not accept a new offer of employment.

Whether employers, also by means of scenario planning methodologies, accurately plan their current and future staff needs and rigorously map the existing organizational roles in order to find out which of these are due to gain further strength and strategic significance in the future, these will be in a position to identify the internal candidates matching the organizational needs, that is, the employees who can effectually fill those roles and timely plan for their growth and development.

Offering people, who have the traits and attributes to take further responsibilities and fill strategic roles in the future, internal and international mobility opportunities and the chance to participate in local and international projects would enable employers to develop talent from within the business, whilst offering these individuals the opportunity to broad their experience in different contexts and environments.

Buying talent off the shelf clearly demands little effort, but not necessarily less resources, whereas developing and building it internally definitely takes more time and efforts. Both options essentially pose challenges and offer opportunities; nonetheless, whenever employers decide to opt for the former method these should be prepared to eventually start back the recruitment process anytime. By adopting the latter approach, by contrast, the likelihood that an employee might leave the organization should result considerably reduced. Yet, the adoption of an approach aiming at developing talent internally should help employers to retain quality individuals and to straightforwardly attract from the exogenous environment, and subsequently retain, the individuals having the skills and expertise unavailable within the business.

Employee’s loyalty at large can still continue to be regarded as an important organizational asset; nonetheless, its significance has in recent times apparently considerably weakened. The incessant changing circumstances and the organizational ever-varying wants and woes account for employers having to suddenly, quickly make decisions so as to tackle and address as early as possible the arising problems. More often than not, the adoption of this approach entails employers to acquire in the exogenous environment, that is, the external labour market the talent necessary to support the organization. The lack of a people resourcing strategy and of an accurate succession plan can clearly contribute to make matters worse.

Employee’s loyalty might no longer be universally perceived as a significant value but employers, by means of their recruiters in the first place and of their managers and HR function subsequently, should do whatever they can to ensure that a new recruit stays with the organization at great length or, if the worst comes to the worst, at least for the time enabling them to identify and develop internally the individual who fits the role the most and can ultimately perform it for the foreseeable future.

Longo, R., (2016), Employee’s Loyalty: Can Be It Still Regarded As An Individual Significant Value?; Milan: HR Professionals, [online].