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How To Set A Loyalty Trap
Secrets of creating a workplace employees will not want to leave

BY: MICHAEL STERN December 16, 2002

What secret fear costs chief executives the most sleep?

No, it’s not Mounties waving a search warrant. Despite the public’s sour perception of CEOs, most executives are honest, capable people doing their best to create value for shareholders, customers and employees.

Far from thinking of themselves as masters of the universe, Canada’s CEOs know that all their efforts can easily come undone without the right people in place. What keeps them awake at night is the fear that as the economy picks up, their best employees will be lured away.

Many companies are sitting ducks. With the economy so uncertain, many are in holding patterns, reluctant to undertake new initiatives.

Meanwhile, minimal pay raises, across-the-board salary freezes, and impossibly high bonus targets have talented senior employees champing at the bit. They are anxious to earn more money and eager to do something new.

Other employers know this. As the outlook improves, and more companies start moving forward, you can expect recruiters to start calling. If they are offering better growth opportunities, your most valued employees could be out the door faster than you can say, “Didn’t I ever tell you how important you are to this organization?”

How do you retain your best employees in the talent shortage that’s coming? You tie them to the company with bonds that are stronger than money and ambition. You show them respect and appreciation.

Yes, you should have been doing this all along. But it’s not too late to start now. Here are five tactics to get you going:

1. Don’t treat all employees equally. It’s not just that some are more valuable than others are. But companies have choices in how they reward people. Some top people, for instance, would rather have family-oriented benefits, while others might prefer membership in a prestigious club. Find out what benefits matter most to your top people and try to supply those, rather than offering everyone the same package, or assuming you know what will excite them.

2. Value your staff as people, not employees. Help them deal with work-life balance. Many employers still don’t seem to recognize there’s life outside work, so those who offer flexible hours or work-at-home options are most likely to engender loyalty.

3. Thank your employees. Give them pats on the backs, both when they need them and when they deserve them. Survey after survey shows it’s not money that motivates good employees – it’s recognition. So many employees have to wait until their farewell party to find out their work was appreciated.

4. Make sure your employees see their value to the whole enterprise. I know one CEO who never holds team meetings. He meets with subordinates one-on-one, so they never see the big picture, or understand their contribution to each other. People want to be part of a successful team, and those who don’t feel a part of things are vulnerable to outside offers.

5. Support employees’ career growth. Discuss your people’s hopes and ambitions, and let them know you will support them in seeking new challenges and opportunities. Now is a good time to encourage further education and training. Picking up the tab for a course and offering time off to complete it is a small price to pay for an upgraded, re-energized employee – and it can also breed tremendous loyalty when competitors come calling.

What companies are most at risk to lose good people as the economy turns up? Companies that have a long history of costing-cutting, poor pay raises and low morale; businesses that are not market leaders, or appear to have limited growth prospects; or those at which management seems aloof and out of touch.

Right now, most employees are reluctant to move. In a tight job market, the devil you know is better than the one you don’t. But fear and doubt don’t last. Your job as a leader is to build a corporate climate where employees stay because they want to, not because they haven’t had a better offer.

Creating that kind of environment may even help you sleep better.