Employee loyalty takes a nasty fall

Sliding loyalty is just as common among executives as workers


Employee loyalty takes a nasty fall A new study by Ipsos Reid has found another nasty side effect of the recession: plummeting employee loyalty. Across the country, 22 per cent of Canadian employees are expressing decreased loyalty to their employer, the study found—a direct result of the economic downturn.

At companies that have frozen salaries or laid people off, plunging loyalty is even more widespread. The study reported that 31 per cent of employees feel less loyal in organizations where salaries are on ice, while 36 per cent of employees feel less loyal in organizations where the staff has been cut.

“Employees have the feeling they have to do more with less, and they expect some reciprocity,” says J.B. Aloy of Ipsos Reid. “Loyalty is really a two-way street, and right now they don’t have that impression.”
One of the study’s most surprising findings was that dropping loyalty was as common among executives and managers as among regular workers. “You expect them to be more engaged and more loyal,” Aloy explains. “But right now it’s all about recognition, and I think that many executives and managers don’t feel recognized.”

Alan Levy, associate professor of human resources and labour relations at the University of Brandon, says that part of the problem is that most organizations were quick to turn to layoffs when the recession hit. Human resources departments then compounded the problem by giving “lip service” to the idea that employees are a valuable resource, before unceremoniously cutting dozens.

Aloy says that employers should heed the negative sentiment, because employees have long memories. “It’s very important to make sure you have the right resources and you keep your key people,” he says. “Some shortterm decisions might impact the long-term capacity of the organizations to perform.”


Employee loyalty takes a nasty fall

  1. Is anyone really surprised by this? After years of companies wanting more "flexibility" to lay-off employees, more perma-temps, and more for less they are reaping what they have sown. Why would I want to be loyal to an employer that has no loyalty to me? I'll do my work for my paycheque and nothing more because I know that the sentiment is mirrored on the other side.

  2. “Some short term decisions might impact the long-term capacity of the organizations to perform.”

    This should be the phrase companies always keep in mind. And they all need a long term vision beyond the next quarter.

  3. I am totoally agree with comments no. 1 , I have been working in petroluem operating company , when prices was 135 US pb, the employer did pay my any bnous or increase my comensition , now the pricies below 33$ pb why should i care and work hard ,even the employeer does not apprciate that..

  4. “But right now it's all about recognition, and I think that many executives and managers don't feel recognized.” — Absolutely! Loyalty issues should not be a surprise. For more on the link between retention, employee engagement and recognition, read this post and the research it links to: http://globoforce.blogspot.com/2009/03/link-betwe

  5. Initially many employers thought laying off their employees was the right answer, but maybe they needed to change/adapt their businesses to better suit the needs of their customers and the changing environmnent before jumping on the "lay-off bandwagon."

  6. WOOO! Ipsos Reid! :D

  7. Employee loyalty: more than enough anger to go around. Organizations in North America are into a phase of creative disassembly where reinvention and adjustments are constant. Hundreds of thousands of jobs are being shed by GE, Esso, Hudson Bay, Royal Bank of Canada, HP, Starbucks etc. and the state, counties and cities. Even solid world class institutions like the University of California Berkeley under the leadership of Chancellor Birgeneau & Provost Breslauer are firing staff, faculty and part-time lecturers.
    Yet many employees, professionals and faculty cling to old assumptions about one of the most critical relationship of all: the implied, unwritten contract between employer and employee.
    Until recently, loyalty was the cornerstone of that relationship. Employers promised job security and a steady progress up the hierarchy in return for employees fitting in, performing in prescribed ways and sticking around. Longevity was a sign of employeer-employee relations; turnover was a sign of dysfunction. None of these assumptions apply today. Organizations can no longer guarantee employment and lifetime careers, even if they want to. continue

  8. continued
    Organizations that paralyzed themselves with an attachment to “success brings success' rather than “success brings failure' are now forced to break the implied contract with employees – a contract nurtured by management that the future can be controlled.
    Jettisoned employees are finding that the hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.
    What kind of a contract can employers and employees make with each other? The central idea is both simple and powerful: the job or position is a shared situation. Employers and employees face market and financial conditions together, and the longevity of the partnership depends on how well the for-profit or not-for-profit continues to meet the needs of customers and constituencies. Neither employer nor employee has a future obligation to the other. Organizations train people. Employees develop the kind of security they really need – skills, knowledge and capabilities that enhance future employability.
    The partnership can be dissolved without either party considering the other a traitor. Employee loyalty to management is dead. A Rx for employee loyalty reform.