But as opportunities arise, employees likely to jump ship
While the recession had a negative impact on a variety of areas, there is one bright spot for organizations. The most recent economic downturn appears to have boosted employee loyalty, according to a survey by staffing firm Kelly Services.
Nearly one-third (30 per cent) of 15,000 employees surveyed worldwide said the recession has made them more loyal to their employers, found the Kelly Global Workforce Index. Just eight per cent said they are less loyal and 62 per cent said their loyalty is unchanged.
Forty-five per cent of respondents are also totally committed to their current employers, up from 32 per cent in 2006, found the survey.
However, the increase in loyalty and commitment could be short-lived if it’s only a reaction to the uncertain labour market, said Claude Balthazard, director of HR excellence and registrar at the Human Resources Professionals Association in Toronto.
The main driver of retention is not so much engagement but opportunity, he said.
“No matter what you do as an employer, when the economy gets better and there are more opportunities out there, you will have turnover,” said Balthazard.
This is also referred to as “continuous commitment,” where employees are committed to their current employer and job but only because they don’t feel like they have other options, said Catherine Connelly, an associate professor at McMaster University’s DeGroote School of Business in Hamilton.
Even the perception of the kinds of opportunities available, be it other jobs or a more robust retirement portfolio, will make employees more or less committed to their current employer, she said
“You keep on hearing how tough it is, it makes people, maybe, more grateful for what they have,” she said. “So they’re committed to staying, for now. I don’t know how they’ll feel when the market improves though.”
But there is another kind of commitment employers have more control over — affective commitment. This is the emotional connection employees feel toward their employer, said Connelly.
This connection is influenced by organizational support — how much an employee perceives his employer to value him and care about his well-being.
“Employers need to continue communicating with their employees, especially in any time of uncertainty, in terms of being fair and transparent about the business decisions that they’re making and communicating that they value employees’ contributions and care about their well-being,” said Connelly
During the worst of the recession, for example, a manufacturing company asked employees to take one day of unpaid vacation each month to help avoid layoffs during the recession, she said. It was done in a transparent and fair way and actually ended up being positive because the employees felt like the employer cared about them.
But if employers didn’t consult employees about these kinds of measures or employees felt employers were just taking advantage of a bad situation to save money, then loyalty and commitment would plummet, said Connelly.
“Depending on how it’s unrolled, it can be viewed as a very positive thing where the company is trying to help people or it can be viewed as an opportunistic thing and the company is trying to help itself,” she said.
Respondents to the Kelly Services survey who are more loyal to their employers said it was because of positive management, good company morale and pay levels that improved or remained steady during the recession.
When asked what was the one thing that would make them more committed to their jobs, 43 per cent of respondents said more interesting or challenging work, while 18 per cent said higher salary or benefits.
Going forward, employers need to ensure employees are rewarded for the extra work they do during tough times and are given the same consideration for advancement as external candidates, said Connelly.
Long-term commitment also on the rise
Since the recession, employees are also looking for an employer for life, according to Towers Watson’s Global Workforce Study 2010. Forty-three per cent of 1,019 Canadian employees surveyed want to work for a single company for their entire career and 34 per cent want to work for no more than two to three companies.
This represents a significant shift from the trend of decreasing employee commitment that began with the big layoffs in the 1980s, said Balthazard. While the shift might only be a blip in reaction to the recession, employers can take steps to convince employees to stay, he said.
Employers need to invest in employees and treat them well during good times and bad, he said. While there will be more turnover as more opportunities arise, organizations that have built those relationships will have more employees who stay longer.
One of the best ways to do this is to invest in the long-term training and development of employees, said Balthazard. Training investment implies a future commitment and a desire for an ongoing relationship, whereas pay and bonuses are for work already completed, he said.
“Employees look for signs that employers are interested in them, invest in them,” said Balthazard.
Unfortunately, only 39 per cent of employees surveyed by Towers Watson think their leaders are committed to developing employees and 49 per cent think there are no career advancement opportunities in their current roles.