Employee Loyalty: The Answer to Job-Hopping


By Stephanie Monge-Sherman

If you’re expecting to pick a new hire after 1-2 interviews and have them stay for the rest of their career, you’re likely in for a disappointment: the days of guaranteed long-term hiring are over.

Job hopping, or the act of moving between jobs every year or two, is on the rise as employees look for the right fit. Employers now have to not only attract talent, but also work to keep them if they want their business to grow and thrive. This makes earning employee loyalty crucial since it’s key to retaining talent.

Employee loyalty is built on a few important pillars: recognition, leadership, incentives, engagement, and culture. The transformational leadership model is the true answer to continual job-hopping: it involves a leadership style that encourages employees to innovate and craft change for the betterment of a company’s future.

Adopting the transformational leadership model takes more than just pep talks, though. Companies have to show employees that they are valued, important for the company’s success and that their time is respected. This article delves into exactly how to walk the talk when it comes to transformational leadership and curbing job-hopping with strategies to promote profound and lasting employee loyalty.

1. The True Cost of Employee Turnover

There’s no doubt that replacing employees is expensive, much more expensive than the effort of keeping valuable employees. It actually costs 33% of an employee’s salary to replace them (Sears, 2017).

Why so high?

Replacing an employee has so many components, from time and money spent recruiting, interviewing, training, and even overtime from other employees covering the gap.

Aside from just the financial burden of employee turnover, the burden one employee’s departure can place on co-workers and managers is also significant and can lead to a trickle-down effect. It can take weeks and months to fully replace an employee and their team has to pick up the slack in the meantime which can cause stress, burnout, and dissatisfaction from the added work.
It makes sense that companies are looking to curb job-hopping, and the point of hire is actually the best point to start nurturing employee loyalty—not years into their service. Transformational leadership should ensure a potential hire not only has the right qualifications but is also a good culture fit. Talent should also be aligned to the growth opportunities available and have the right soft skills.

If your company is simply trying to place the first available qualified candidate in the role, you’ll never solve the issue of turnover, which is only getting worse: only half of millennials strongly agree that they’ll be at the same company a year later, which suggests that the other half is already planning to leave (Gallup, 2016).

2. Focus on Leadership

Increasing employee loyalty is all about transformational leadership. It’s hard to stay in a job when you don’t respect or learn from your manager. Companies need to invest more into making good managers, both hiring them and providing ongoing training, in order to keep employees engaged and motivated.

Managers and leaders are incredibly important for employee loyalty: an astonishing 40% of employees that rate their supervisor poorly have interviewed for a new job in the last three months while of those that rate their supervisor highly, only 10% have interviewed for a new job recently (TINYpulse, 2018).

Not only is employee feedback on a manager’s performance critical for a company to understand employee engagement, but it also helps keep managers accountable. Companies should look at installing quarterly reviews, incentive plans based on quarterly feedback, and regular development plans to ensure all levels of the company are engaged and performing their best.

3. Employee Recognition is Critical

There are no ifs, ands, or buts about it: employees crave recognition. Getting regular feedback about their work and being recognized for good work is important to stop an employee from looking for a new job. Being appreciated for their work makes employees feel valued and makes them want to contribute more, which is good for business. In fact, 70% of employees feel they work harder when they’re recognized for their work, 78% feel their productivity improves, and 75% think it increases their intent to stay at a job (Globoforce, 2018).

With just a little bit of employee recognition, companies can help boost employee loyalty. Too many leaders don’t make it a priority, but it can make a difference to the overall performance of a company—especially when veteran employees start jumping ship and taking company knowledge and training dollars with them. An employee of the month program seems simple, but they work and so do company-wide employee appreciation events, rewards programs, and simple daily positive reinforcement. It doesn’t have to be complicated, but you do need to show appreciation for a job well done.

4. Importance of Work-Life Balance

In this day and age, compensation simply isn’t enough to keep people from job-hopping. They’re not constantly searching for better pay; they’re looking for a culture that fits. In fact, culture now trumps compensation, especially among the millennial crowd that is quickly taking over the workforce. Work-life balance isn’t the exception anymore, it’s the rule: 53% of employees report that they consider the work-life balance in a role very important when deciding whether or not to take a new job (Gallup, 2017).

Creating work-life balance requires a simple but powerful tenent of transformational leadership: trust. Leaders must trust employees to balance their workload. Of course, guidance is often needed and that can be given in a detailed work-home-home policy or by allowing employees time off for mid-day appointments or to come in early in order to pick their kids up after school on time. This flexibility pays. Research shows that productivity goes up 10-30% when employees have flexibility in their schedule (Pitt-Catsouphes & Marchetta, 1991).

5. Employees Want Growth

Many companies misunderstand what employees are looking for in a job, and this is one of the big reasons for job-hopping. Employees aren’t necessarily looking for constant promotions to stay at a company, but they do want to know where they are headed, and they want a plan to get there. Transformational leadership knows and recognizes this, and help employees map out a career path at the company that gets them excited and shows why they should stay.

Employees also want growth opportunities to further develop their skills and grow in a role. Companies that misunderstand this as a ploy for a title or compensation change will lose valuable employees: instead, this retention strategy benefits both employees and the company by helping them become better at their job and in a better position to succeed when they are promoted.

6. Increase Employee Engagement

One major opportunity for companies to retain employees is to learn how to engage them. It’s a fine balance between giving employees too much responsibility to the point they burn out but also not leaving them feeling disengaged, unchallenged, or bored. Employee engagement is incredibly important for your company’s success: in fact, disengaged employees are four times more likely to leave a job versus highly engaged employees and becoming highly engaged can cause a 21% increase in performance (Corporate Executive Board, 2004).

Every employee’s level of engagement is different, which is why it’s up to transformational leadership to get to know their teams and what makes them tick: giving employees challenges, side projects, and opportunities to grow their knowledge goes a long way towards halting job-hopping while also increasing company performance.

The transformational leadership model is a hugely important tool when it comes to securing employee loyalty and helping reduce frequent turnover. It lets leaders fulfill the role they’re supposed to, by leading and not micromanaging. It lets employees do what they were hired to do, which increases job satisfaction on both ends and becomes more productive for the growth of the company.

At the end of the day, it’s clear that a generational shift is happening in the workforce that companies need to pay attention to and adapt to in order to continue to succeed. Employee loyalty is harder to earn than ever, but more is being asked of employees than ever before and it’s resulting in unwanted turnover. Luckily, the solution is fairly simple and straightforward: respect your employees and they will respect your company.

Gallup. (2016). How Millennials Want to Work and Live. Retrieved from https://enviableworkplace.com/wp-content/uploads/Gallup-How-Millennials-Want-To-Work.pdf.
Sears, L. (2017) 2017 Retention Report. Retrieved from https://cdn2.hubspot.net/hubfs/478187/2017%20Retention%20Report%20Campaign/Work%20Institute%202017%20-Retention%20Report.pdf
Employee Retention Report. (2018). Retrieved from https://www.tinypulse.com/hubfs/2018%20Employee%20Retention%20Report.pdf
Globoforce Work Human Research Institute. (2016). The ROI of recognition in building a more human workplace. Retrieved from http://www.globoforce.com/resources/research-reports/roi-recognition-human-workplace/
Gallup. (2017) State of the American Workplace. Retrieved from https://cloc.umd.edu/library/research/State%20of%20the%20American%20Workplace%202017.pdf
Pitt-Catsouphes, M., & Marchetta, A. (1991). A coming of age: Telework. Boston: Center on Work and Family, Boston University.
Corporate Executive Board. Driving performance and retention through employee engagement. (2004). Washington, DC.