How To Measure Employee Loyalty

Philip Cleave
November 15, 2022
Boss open to ideas during staff meeting

Compared with the concepts of employee engagement and job satisfaction, employee loyalty is often one of the least appreciated and explored areas of staff employment. Yet, it shouldn’t be given its ability to positively influence productivity, company culture and staff retention rates.

That’s why we’ve decided to dedicate a blog on this subject, which will investigate factors that can affect employee loyalty, how to measure it and how to improve it.

However, before we go on to look at that, it’s useful to highlight why staff loyalty is so crucial for a business.

Why is employee loyalty so important?

Given the unpredictability of today’s economic climate, the benefits of having dedicated, hardworking staff that you can rely on is more valuable than ever. This is because in difficult times loyal employees can provide the much-needed commitment and security that a business needs in order to persevere and survive.

In addition, the more loyal employees you have the better, as their commitment and enthusiasm can be infectious, positively impacting other staff members and your wider company culture.  This can also have a hugely beneficial impact on your staff retention rates, helping you to significantly reduce turnover.

Factors that can affect employee loyalty

Having got up to speed with the importance of staff loyalty, it’s equally helpful to know what factors can harm it and cause employees to leave, so you can work on removing as many of these obstacles as you can.

While the mix of reasons will vary from one firm to another, typical factors that can reduce employee loyalty towards a company and cause staff to leave include:

  • Low pay
  • A lack of work challenges
  • Few careers advancement opportunities
  • Lack of passion for work tasks
  • Poor work-life balance
  • Poor employee-manager relationship
  • No clarity on the direction of a job role
  • No employee recognition

When it comes to identifying the biggest factors within your own workplace, ongoing employee surveys can help, but the best ways include carrying out staff exit surveys and interviews. Given that it’s unlikely to be completed face to face, the staff exit survey in particular can enable you to get a more detailed and honest picture of why staff want to leave. It can also help you to identify any patterns or correlations in employees’ reasons for leaving, making it easier to deliver the improvements you need to encourage more staff to stay.

While it’s useful to know what factors can cause disengagement and harm loyalty, it’s also valuable to be able to identify the traits of your most loyal workers.

Generally loyal employees are punctual, do their job’s well, contribute to the company’s culture and are committed to the success of your company. They are also much more aware of the broader picture of your company’s mission and keener to take advantage of professional advancement opportunities to improve their output. A dedicated employee discusses ideas and provides honest feedback on their own work experience in order to improve your business.

How to measure employee loyalty

Once you’ve identified factors that can negatively impact employee loyalty, as well traits that can help you to identify your most loyal staff, you’ll want to get a better measure of loyalty levels within your own business.

Some effective ways to measure employee loyalty include.

Company awards

Many company awards measure employee loyalty. Although you will have to come up with your own award submission, the questions can help you think about what programs and measurements you have in place to encourage, identify and reward loyalty among your own workforce.

Some awards even incorporate surveys to help you with this. For example, the Great Place to Work award conducts a trust index poll on a company’s behalf as part of the award. The survey includes 58 statements, all of which relate to the workers’ experience of their own work environment. The award also includes benchmarking, so a company can compare their own culture with other organizations. Ultimately, these surveys help provide a deeper understanding of your staff and their loyalty levels.

Staff engagement

Reviewing engagement levels within your own work force, can provide another effective indicator of how healthy staff loyalty levels are within your business. And the most effective way to do this is through running frequent employee engagement surveys.

From getting their views about their job satisfaction, relationship with their colleagues and managers, and perception about the wider company culture, to their opinions about development opportunities, recognition and company benefits. The wide range of areas and questions an engagement survey can cover off, can provide a helpful glimpse into the levels of staff loyalty within your business.

Employee Net Promoter Score (eNPS)

While the first two measures are helpful, by far and above the best way of measuring loyalty is to capture the employee net promoter (eNPS) metric. This takes a very similar approach to the popular customer-facing Net Promoter Score measurement and is captured by asking your staff the following eNPS question:

On a scale of zero to ten, how likely are you to recommend our company to others as a great place to work?

(This is based on the proviso that those closest to zero will be least likely and those closer to ten most likely to promote you)

Once your answers have been reviewed you can divide your staff into the following three groups:

  • Promoters – those who rated you a nine or a ten and are considered your promoters.
  • Passives – those who rated you a seven or an eight and are categorized as passives.
  • Detractors – those who rated you anything between zero and six and are your detractors.

To calculate your eNPS, you’ll need to subtract your percentage of detractors from your percentage of promoters. You could also use our eNPS calculator for a simpler way to work this out.

You should now be left with a score of between –100 and 100. Any positive score is considered good, while scores below zero are a warning sign that you need to do a lot more about improving loyalty levels among your work force.

How to improve employee loyalty

Having measured staff loyalty levels within your organization and got a better sense of how well your business is performing in this area, you’re now ready to explore ways to improve employee loyalty within your business.

Before you begin, it’s important to realize that employee loyalty in your company will not improve suddenly. Like a long-term connection with a donor or customer, it takes time and effort to nurture loyalty, with the definition and manifestation of employee loyalty differing from one company to another.

Loyalty can be a difficult concept to describe and quantify, but there are some steps you can do to encourage greater loyalty among your employees.

Here’s some ideas to think about.

Start a staff recognition program

According to research about 69% of employees said recognition and rewards would keep them in their current job for longer than if they didn’t receive anything.

Subsequently, if you’re to keep your staff happy and productive, you need to be recognizing them regularly, as it will help to make them more loyal.

Some tactics you could use as part of an employee recognition program could include:

  • Develop an incentive scheme to motivate individuals or teams to reach specific targets, by offering them the chance to win prizes such as a gift card or an additional day of annual leave
  • Send a handwritten message to staff members that go above and above
  • Communicate special mentions to standout employees in workplace meetings or newsletters
  • Select employees of the month and reward them with vouchers
  • Reward outstanding teams with an expenses paid dinner

However, you don’t have to spend a fortune on employee recognition, as the purpose of staff recognition is simply to help employees see how much the company values their input.

Give staff the right tools to complete tasks

When it comes to their work, nothing’s more de-motivating for employees than not having the right equipment to do their jobs.

It’s also worth noting that because they do their jobs day in, day out, your staff are usually the best qualified to know what tools will work best. So, if they recommend using Slack, Trello, or Teams in the office, to improve communication, collaboration and project management, then you might want to implement their suggestions.

Try adding a worker suggestion box to your company intranet, to show your employees that you value their suggestions for improving their work environment.

Be honest and open about staff retention

Your commitment to retaining employees does not have to be covert. In fact, being more open about telling them that you want them to stay and why might aid your retention efforts. It will certainly make your employees feel more appreciated and encourage you and your staff to discuss how you can improve your working relationships moving forward.

One to one sessions between managers and staff are great a way of uncovering issues impacting retention. This is because they offer the chance for employees to discuss what they like or dislike about their roles, development opportunities, management and wider company issues.

Besides the surveys we’ve already mentioned, the questions you ask in a staff motivation survey, especially if it’s anonymous can help you to uncover more insightful and honest feedback in this area too. And ultimately the more you find out about what encourages employees to stay or leave, the better you’ll be able to develop a plan for nurturing staff loyalty.

Show staff that you care

Staff commitment tends to increase when employees have a stronger sense of belonging to an organization and its leader.

Demonstrating to your workers that you care about them on a personal level, as well as trying to better understand any hurdles they face is a great way of developing this relationship.

If you can help them develop and care for their happiness, you’ll increase your number of loyal employees.

Treat employees with respect and dignity

During periods of high stress, which can result in frustration and confusion, it can be all too easy to overlook politeness and courtesy. However, regardless of the conditions, it’s important to remember that your team is just like any other group of people.

If you can instill a sense of respect and decency in your company’s culture, you’ll get through these rough patches a lot quicker. Even in times of adversity, your staff will not want to leave a leader, if they treat them as individuals, not “workers.”

Celebrate the wider achievement of your company

When it comes to motivating staff, acknowledging company-wide successes is just as important as recognizing employees’ accomplishments. This is because a company’s achievements are the result of the combined efforts of every team member.

It would be much harder to meet your objectives if one team member was not playing their part. Therefore, when the team achieves its objectives, it demonstrates that every worker has contributed.

Helps teams to complete their tasks

For busy managers and corporate executives spending many hours cooped up at their desks or in meetings, it can be all too easy to become too remote from their staff. However, this can undermine openness and make it more challenging for staff to take on your feedback, if they don’t think you’ve been involved enough in their day-to-day tasks.

If you’re able to help them out now and again when they urgently need extra support, they’ll feel more motivated to consistently put in their best efforts.

Offer workers greater freedom

The level of staff freedom and autonomy will tend to vary from one company to the next, but it can influence staff motivation and loyalty levels.

However, generally there tends to be more regulations among larger firms, with employees having to dress in a particular manner, or adhere to a particular code of conduct. Limits on freedom can make some employees less comfortable to be themselves with co-workers, or even make it harder for them to achieve their full potential. And what could be a minor irritant to some could be an absolute deal-breaker for others who may be considering applying to join your organization.

In contrast, smaller firms generally tend to be more relaxed about giving staff greater freedoms. This could include anything from a more informal dress code to a better work life balance through flexible work start and finish times or opportunities to work from home

So, if you want your staff to think more favorably towards your business, try to give them a reasonable level of freedom.

Deliver the experiences your employees love

Finally, and crucially think about the experiences you’re delivering for your staff

Whether it’s giving them greater work autonomy and work-life balance or putting in steps to improve your company culture and more opportunities for employee to learn and develop. Whatever, it is that your staff want to see more of, you’ll be able to deliver those experiences, if you’re regularly reaching out to your employees and acting on their feedback.

However, to get the best results you need to be collecting that feedback throughout an employee’s journey with you, from their initial recruitment and onboarding to their ongoing development, retention and final company exit. If you can do this, you should be able to achieve an uplift in workforce loyalty.

Get the tools to deliver better employee experiences

Employee experience and employee loyalty are intrinsically linked, so if you’re to boost staff loyalty numbers you need to be delivering better experiences. You’ll also need the right survey tools.

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