Employee loyalty is a variation on the idea of ‘The Gold Watch Era.’ Basically, back in the day — maybe your generation, or maybe your parents or grandparents — people tended (everyone is obviously unique in some respect) to work at companies for a longer period of time and potentially even retire at those companies, thus earning a Gold Watch. That was the model. It’s not the model anymore. Notions of employee loyalty have shifted about a dozen different times in the past 10 years alone — which has a lot of implications for how we approach job-hopping, for example.
Now, before we go too overboard on the concept of employee loyalty, let’s toss out a quick caveat. As of January 2014, an average U.S. worker lasted 4.6 years on a job. In 1983, that tenure was 3.5 years. So we’ve actually increased base employee loyalty in the United States in the past 30–35 years. And, while there are a lot of caveats between 1963 employee loyalty data and 2014 employee loyalty data, the base number is exactly the same — 4.6 years on a job. (People often tweet that it was 22.5 years on a job in 1960, which is absolutely preposterous and part of the reason you need to use a ‘trust but verify’ approach on social media.)
So, where do we stand in reality with the whole concept of employee loyalty?
Employee loyalty and the freelance movement
Here are a bunch of freelance statistics globally. You can chop freelance data up about 19,933 ways — but the fact is, it’s on the rise. By 2020, there’s a chance it might be 40% of the American workforce. That’s almost 1 in 2 people working in a freelance, self-employed capacity — instead of within the traditional career arc of ‘going at it with a corporation or small business.’
Think about those rising numbers and then stop and think why that’s happening and what that all might mean in terms of employee loyalty. There are a dozen or so possible answers you could arrive at. An average person who isn’t putting much thought into the question will shriek out “The Millennial Mindset!” Here’s the dirty little secret about ‘The Millennial Mindset,’ though: it’s not going to be that much different than the Boomer Mindset, ultimately. Millennials will have cooler phones and technology, and might want to live in cities more and drive fewer cars, but … in terms of attitudes and mindsets about work, it will be basically similar to a large extent. Some ‘futurist’ just snapped a pencil in half, so let me explain. In terms of work, people tend to want:
This is why, IMHO, you see the freelance movement growing. Companies aren’t set up to offer people respect or opportunities for growth, in reality — companies are typically about their bottom line and the perks of the executives. If you don’t believe me, that’s fine — but this stuff is backed up by research from places like Stanford, which are a lot smarter than I am.
We assign a lot of ‘necessary traits’ to companies — “They should provide us purpose!” or “They need to give us a good career!” None of those things are remotely true. Companies have legal and fiduciary responsibilities to make money for shareholders/stakeholders, and the human psychology elements of how work is set up make it so that perks for the executives (“Country Club Management”) end up mattering as well.
The rise of freelance and whatever buzzword you want to toss at it — “App Economy” or “Sharing Economy” or “Knowledge Economy” or “On-Demand Economy” or whatever the hell — is closely tied to a decline in employee loyalty, and it all comes from this notion that people are starting to understand the things they really want from work usually don’t come from corporations and how they manage things.
Employee loyalty and opportunities for growth
This is a huge one. Most people say “opportunities for growth” and mean “more money,” which is fine — although admittedly a large percentage of people have no idea why their salary is the number it is.
I’ve talked before about this idea, so I’ll say something quickly here and then let another writer flesh it out. It’s actually oftentimes bad to be a really loyal employee. In some places, it can kill your opportunities for growth. Executives are typically hard-charger, Type-A males. One of the common bonds of that group of people is that they know how to exploit others and find loopholes to benefit themselves (that’s how they rose up in a hierarchy). If you’re practicing an extreme amount of employee loyalty, here’s what happens: a lot of times, your boss looks at you and is like “I love me some Jeff, he hits targets for me.” If he tries to promote Jeff (i.e. you), he loses that target-hitter — which is a person who makes him look good. Work is essentially a complicated game of trying not to look incompetent, so no senior manager wants to lose a top lieutenant via a promotion to another role. This restricts opportunities for growth. This is all part of the ‘circles of managerial hell.’
Here’s my girl Liz Ryan with more on the ultimate demise of employee loyalty. This is her discussing an employee named Nicolas:
“I completely lost sight of the culture in my company. More and more people were getting dissatisfied and leaving. My boss said, ‘Those people are just malcontents’ and I said, ‘Yeah, those people are malcontents.’ I just bought the whole party line. I didn’t ask for a raise because supposedly the division wasn’t making money, but we actually were making money. I had the numbers at my fingertips. I rationalized. My boss said they were making investments in software and I was like ‘Yeah, they’re investing in software.’
We all know this situation. “Look Nick, I’d give you a raise, but revenues are down!” Some manager literally says that to Nick even though Nick manages the f’n numbers and knows revenues are NOT down. This is the amazing thing about managerial power. You will do something completely illogical — lie to a guy who has access to revenue data — simply to eff him over. And we wonder about the demise of employee loyalty?
Here’s Part II:
“I got laid off and when I did, about 30 of my co-workers said to me, ‘Nicolas, couldn’t you see that your department was on the chopping block for months?’ I couldn’t see it. I had blinders on. I believed everything my boss said. When he told me I was laid off, I couldn’t take in it at first. I thought he was kidding. I thought it was literally impossible that they would let me go, but they did.”
This kinda sorta happened to me at my last job — although I was pretty aware that there was a possibility I could get canned at any second. The point is: employee loyalty should, in a logical world, lead to more opportunities for growth and more job stability. In reality, it often leads to neither. So why should employees be loyal?
Employee loyalty and the Buzzword Boulevard
You see this a little bit with the terrifying rise of Donald Trump: he ‘tells it like it is,’ and people like that because they’ve been horse-fed so much bullshit for so many years.
In terms of future of work discussions, this is the real deal with employee loyalty. Executives friggin’ love to spew buzzwords like vomit. They will talk about employee engagement, but in reality they couldn’t give a shit and it’s predominantly a consultant-driven scam to prevent them from offering higher salaries (“because we have a waffle station now!”). Execs will repeatedly list a few adjectives from a ‘core values’ list, then instantly race back to a conference room to discuss revenue plays. Senior vice presidents will talk about how ‘people drive the ship’ and ‘our employees matter,’ then screech at employees that ‘the customer is always right and you fucked that up!’
Not all executives are like this. But many are.
So that’s the problem: anything to do with employee loyalty is shrouded in buzzwords left and right. People discuss it, but where’s the action? OK, so my employer keeps telling me that the company really values my contributions. Why am I making annual raises less than inflation? Why have I been a product marketing manager level II for six years? I thought I was valued. What is happening?
Everybody knows that if something matters to a business, action happens on it very quickly. “Customers aren’t responding to our lead gen program! OHHHH GAWD!!!! Get everyone in town for an All-Hands this Monday! I said NOW!” So if employee loyalty actually mattered to companies aside from a few beers on a Friday or some free donuts, wouldn’t there be more action around it? Yes. And because there often isn’t, you can typically infer that it’s not actually a priority.
My final point here — this got long — would be about the 2008 crash and any impending future crashes. If you even remotely believe in Hierarchy of Needs, the decline in employee loyalty makes sense. This is what happened:
- Executives around 2007 saw what could happen to them and their peers
- When the economy rebounded somewhat, they decided it was crucial to protect their perch until their retirement
- This infused tons of managerial and product/service decisions (“playing it safe”)
- Those people still aren’t ready to retire — especially the men, who need the workaholic culture to justify themselves — so we’re kinda creeping along at the same pace, except in maybe San Francisco and a few other places
- People who become execs and SVPs (often rightfully, sometimes not) think they got to their perch because of hard work and industry expertise, so goddamn it, they deserve the perks that come with it!
Here’s the bottom line: in 1963, the average tenure at a job for a U.S. worker was the same as in 2014. But … the life path of someone in 1963 was very different than the life path of someone in 2014. We need to consider elements such as this when we talk about employee loyalty.
What other thoughts do you have?
My name’s Ted Bauer; I blog here regularly and you can learn about hiring me for freelance and contract gigs as well. You can also subscribe to my newsletter.