The Importance of Employee Loyalty

October 14th, 2011

We all know that employee loyalty is important, but oftentimes we forget how beneficial it can be for the entire business. “Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results primarily from high-quality support services and policies that enable employees to deliver results to customers.” (Putting the Service-Profit Chain to Work, Harvard Business Review, 1994) There is a strong relationship between productivity, loyalty, employee satisfaction, customer loyalty, and profitability. So, what is the secret to fostering employee loyalty? Leadership. Leaders who genuinely care about their people, who are “plugged in” to their organizations, and listen to their employees for suggestions to improve, will develop corporate cultures that naturally support the concept of the Service-Profit Chain. By no surprise, employees who trust and respect the leadership of an organization often feel more empowered and motivated to do their best. This synergy also results in reduced employee turnover, which is a driving factor that impacts all service levels. Conversely, the costs associated with high employee turnover are not only substantial in terms of monetary value but also costly in terms of quality and service, which has a direct impact on customer retention and loyalty. Unfortunately the dynamic between many employees and employers has changed significantly with employee loyalty now at a 3-year low (MetLife, 2011). For some employees, the grind of a daily 9 to 5 job is now simply a means to an end; the end being a paycheck every two weeks or the distant possibility of retirement. As employers look to cut costs through lay-offs, wage reductions and elimination of benefits, employees are being asked to absorb heavier workloads, work longer hours and meet unrealistic expectations (American Psychological Association, 2011). Given the considerable changes between employees and employers in recent years, it’s more important than ever for leaders to embrace and implement changes that result in employee loyalty. Here at Mindshare Technologies, we’ve been very fortunate to weather the recent economic conditions with strong financial and employee growth. This has given us the flexibility to reinvest in new technologies for our clients – built on ideas generated by our employees. We’re tremendously proud to have employees who are engaged, passionate about their work, creative, and committed to providing the highest quality of internal and external service. At the heart of our company is a phenomenal leadership team that has created a culture with people who work hard, care about each other, are innovative, and fun to be around. By constantly improving from our employee feedback, captured using the Mindshare Platform, we were recently awarded the Top 50 Most Engaged Workplaces in the United States. Click here to learn more about improving employee satisfaction through capturing customer feedback.