It is no surprise that today companies and organisations face significant challenges in developing energised and engaged workforces. The true potential of an organisation can only be realised when the productivity level of all individuals and teams are fully aligned, committed and energised to successfully accomplish the goals of the organisation.
In the current scenario, the goal of every organisation should be to improve the desire of employees to stay in the relationship they have with the company. In other words, rather than focusing only on retention?that is, trying to retain employees who have already decided to leave, organisations should proactively recognise the benefits of managing and improving employee loyalty.
So what is employee loyalty? Employee loyalty means different things to different organisations and different people. Says Kalpana Jaishankar, vice-president, human resources, Patni, ?Loyalty is a thought that would lead to a person being committed to the organisation for what its vision and values are. Loyalty is long-lasting and even after a person leaves the organisation, he can remain loyal and be a brand ambassador because of his experience of the organisation while working with it.?
Loyalty, however, has several different meanings. Nishikant Kadam, head, human resources, CBaySystems employee, says, ?With the changing era, the definition of ?loyalty? has one added aspect which is value-addition. It simply means that the number of years of service with the company is not the only factor of loyalty. The value-addition and contribution by an employee are also equally important. An employee with reasonable years of service and who has made effective contribution to the success of the organisation is the ?most loyal employee?.?
So what happens when a loyal employee leaves the organisation? And how much does it cost companies to find, hire and retrain the talent that it loses?
?The cost of disloyalty is huge, as losing talent in today?s knowledge-based economy means losing an ?intellectual property?,? says Kadam. Replacing a trained and knowledgeable talent is time-consuming and costly, as it requires effort, time and energy. Considering the requirements of the knowledge economy and current shortage of skilled and employable manpower, hiring a replacement is a very costly affair. ?Finding a qualified person who can fit in the overall organisational environment or culture is another big challenge,? Kadam adds.
Industry players have witnessed that apart from the obvious impact in terms of hiring and training replacement candidates, there is an intangible value in the time and effort put in by the management in getting the new employees to become a part of the organisation and absorb its culture.
By the time the organisation culture and business goals are effectively passed on to the new employee, it had already impacted a high impact on the company. Says Kalpana Jaishankar, ?The cost to find, hire and retrain a new employee will be nearly five times the salary of the person who has left us.?
The most successful organisations are those that can adapt their organisational behaviour to the realities of the current work environment where success is dependent upon innovation, creativity and flexibility.
Various companies have various means of holding their valuable human resources (employees). Many companies run various loyalty programmes such as loyalty bonus after a specific time period, enhanced gratuity benefits for longer service durations, greater growth opportunities, overseas deputation, ESOPs, career enhancement, support to academic enhancement and scholarship for the children of employees.
Aditi Technologies, which is recently named amongst the top five IT workplaces in India by the ?Great Place to Work? study 2008, gives significant attention to managing and improving employee loyalty as well as to enabling individuals to enhance their skills and to performance.
?We invest a lot in the training and development of an individual, providing ample opportunities to exhibit their skills and help them in their career progression. This focus results in improved employee loyalty when they see that the organisation is very focused on helping people progress and develop their careers. And this loyalty, in turn, results in lower attrition and greater alignment to business goals,? reveals Chetan LS, vice-president, people department, Aditi Technologies.
Similarly, Patni is also focusing on various measures including training and development, skills development, role enhancement, higher employee contact and many other key human resources initiatives that include e-care?a single point of contact for employees for addressing their queries, grievances, and concerns to respective service providers, Spark?systematic pooling, analysing and researching knowledge programme?and Leap??Leadership Excellence At Patni?, which is a six-point leadership competency model for the employees.
Kalpana reveals, ?There have been instances of employees returning to Patni in the past two years and apart from that employees who have left have influenced their current organisation to do business with Patni, which explains their loyalty to the organisation greatly.?
There are a host of initiatives that organisations take into consideration, so that they can avoid the best talent from leaving the company. It is also fairly well-established that compensation is not the reason an employee leaves his present organisation. It is important that an employee feels engaged with the organisation. Managers play an important role in retaining employees, and human resources strives to sensitise them with respect to employee issues and how they need to be tackled.
Loyalty is not just from the employee?s side but it is also an obligation on the part of the organisation to recognise and reward this. ?The outcome of such mutual win-win situation is what leads to real ?loyalty?, which reflects in pride and ownership demonstrated by the organisation,? adds Chetan.