The Loyalty Gap

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Organizations love to talk about employee morale and fret over staff turnover rates – but rarely do they mention the topic of loyalty.  There’s a few reasons for this.  One, the subject of loyalty makes them nervous because there’s an implication that they might be part of the problem (which is true.)  Two, companies have been distancing themselves from having loyal employees for decades.  No really it’s true!  Think about it for a moment.  Back in the 1960’s people worked for a single organization for their entire career.  They had pension plans that helped that bond.  The companies realized the investment hey had made in recruiting and training someone, so they worked hard to find just the right place for the employee in the organization (as opposed to pushing them out the door.)  Employees couldn’t even conceive of jumping jobs at the first change of the corporate winds.

The 1970’s-1980’s messed this like a bunch of drunken football players tearing apart a friend’s home when his parents are out of town.  Companies began embracing the concept of large-scale layoffs…which they executed poorly.  Often times the top performers bought the farm in wild axe-wielding headcount reduction efforts.  Employees came to the realization that the street called Loyalty was a one-way avenue.  Organizations were no longer loyal to their employees, but they wanted the same degree of loyalty they had always enjoyed from the staff.  Laying off a single person was sad, laying off hundreds or thousands of employees was seen as “a positive change of business strategy,” instead of the tragedy that it really is.  The market rewarded companies that “trimmed the fat,” with increased stock prices.  When you reward behavior on Wall Street, you get more of that behavior.

Companies were encouraged to let people go so much that it became the norm – a part of doing business.  Forget the fact they often let go of the wrong people, that they performed the layoffs like rank amateurs.  All that mattered was the comfort they wrapped themselves in, that they were doing the right thing.  All the while they were chipping away at a reason for employees to be loyal.  Hell, sometimes it wasn’t “chipping,” it was swinging a broad-axe.

Pensions – which helped tie you to a company, disappeared – courtesy of the US Congress and their manipulation by lobbyists for big-business that wanted to divorce themselves from mis-managing pension programs.  Overnight, employees became responsible for their own retirement in the form of 401K plans which were built to travel with you from job-to-job – encouraging mobility between companies.  And through the 1990’s to today, as organizations convulsed and went through countless waves of RIF’s (Reductions in Force) the feeling that companies were no longer loyal solidified.  Bad decisions were made.  Suddenly the thin veneer of belief that organizations were well-run, by highly intelligent people, was gone.  The reality was clear – the people in charge were no smarter than any of the middle level managers they allegedly led.  When the companies beckoned, “Follow me – I have a vision,” employees didn’t follow immediately.  In fact, they began to question their leaders and their intelligence – and justifiably so.  It is hard to have deep-seated loyalty with someone that you think is, well, a moron.  That questioning was the first deep erosion in loyalty.

The 1990’s brought about the global neutering of human resources departments.  Outsourcing of benefits further severed the connections that people had to the organizations they worked for.  The role and influence of human resources diminished.

The waves of economic downturns and bulk RIF’s (Reductions In Force) brought about even more bad behaviors in many organizations.  There was an attitude of, “we can treat the employees anyway we want, it’s not like there are other jobs out there.”  Those sick bastards.  The economy became a convenient excuse for crappy attitude on the part of not just organizations but managers was well.   In some cases if you spoke up for what was right and didn’t deliver the message well, you painted a target on your back for the next round of layoffs.  Individual bravery in corporations was smothered.  The result was that no one raised a finger when companies like Enron pilfered investors money so blatantly.  People in those corrupt companies knew what was happening but lived in a culture of fear – a fear that still permeates the cube-farms of American business today.

Employees learned that layoffs were a curse no matter whether they happened to you or your colleagues.  The people let go went off and got new jobs, made new friends, etc..  Hell, some made better money.  WTH?  The survivors got their workload tripled and reminded constantly that if they didn’t like it, there wasn’t much they could do about it.  Again, the environment of fear smothered good behavior on the part of employees and especially managers.

By 2001 organizations just stopped talking about careers and spoke of jobs.  I have long maintained (see my book Business Rules) that careers exist mostly in your own head.  Companies went out of their way to solidify that thinking.  Everything was about filling immediate short-term needs, not fostering a sense of long-term connection.  Organizations began the propaganda of “You own your own career,” while their leaders still played puppet master when it came to promotions and advancement.  The message was indirect yet clear – “We want nothing to do with your concept of a personal career.”

At the same time, through all of the economic and corporate turmoil, companies have never stopped their desire for employees to be loyal.  They nervously fretted over employee turnover rates, citing the cost to recruit and on-board new staff.  Why would you want to leave a place like this?  The loss of intellectual capital made some leaders fidgety.  Managers learned you couldn’t throw bodies at the problem – replacing one experienced person often required two or more completely inexperienced new hires (fresh meat).

Employee understandably attitudes shifted with this change.   They transitioned from “loyal soldiers” to “semi-armed mercenaries.”  It became clear that the organizations were not supporting them for the long haul; so why should they stand by their companies?  Job hopping – something that three decades earlier was seen as a negative on your resume’ became the norm.  Employees got the message loud and clear from the organizations and, in turn, stopped looking out for the company they worked for and looked out for themselves (after all, who else was going to?)

Historically mercenaries are often renowned fighters but at the end of the day, they work only to get paid.  Success is measured in dollars.  Gone is the concept of loyalty.  When the going gets tough, the employees will flee and the company will dissolve.

After all of this you have to ask, “Is loyalty really important?”  Loyalty is the mentality of the employee to the organization – the commitment to the success of the company/firm you work for.  It’s your willingness to follow and even passionately support your leaders and the organization where you are employed.   It’s not the glue that holds the organization together – it’s the gas that keeps things running.  It is the resolve to do what is right for the organization above your needs.  Yes damn it, loyalty does stand for something.

I will go so far as to predict that the pendulum is going to swing back sometime in the next two decades – that companies are going to be compelled to seek loyal employees again.  To get them and keep them, they will be forced to change their ways.

So the next time someone tells you they’re worried about morale – remember this article and tell them what they need to really worry about is loyalty.  Better yet, ask them what they have done to promote loyalty.  Trust me, the answer will be fumbled and mildly entertaining.

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