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Inspiring Workforce Loyalty Through Business Leadership

Organizations are constantly examining the best ways to manage return on investment. Analytics, metrics, and predictive modeling are justifiably driving business decisions from models and processes to investments in employees and technology.

While these are certainly crucial measures, they often center around hard numbers, sales figures, repeat customers, inventories and bottom-line financial indicators like earnings per share. Increasingly, however, companies are measuring softer indicators. In a recent article, one business leader suggests the best ROI measure should be employee loyalty.

“It’s not a stretch to say that by building employee loyalty, not only do you create cohesion in an organization and reduce job-hopping, you also yield increased productivity and, in turn, profitability,” writes Paul Spiegelman, chief culture officer at Stericycle, a medical and pharmaceutical waste management company.

In explaining that business leadership must examine the financial impact of employee turnover Spiegelman points to a study by the American Society of Training and Development that calculated the average cost of training, onboarding and enabling an employee to do her job at $56,000. Attrition is costly, not just in financial terms but also when it comes to continuity, institutional memory and the time cost of advertising, selecting and hiring a new employee. So now, more than ever, it’s time to turn the corporate gaze inwards, at those who drive the cogs. Perhaps its time they were shown some much needed appreciation using companies like to offer experiential incentives rather than traditional monetary ones.

A study by the University of Pennsylvania showed that a company spending 10 percent of its revenue on capital improvements resulted in a productivity increase of 3.9 percent. Spending that same amount on developing employee capital netted a productivity return more than double at 8.5 percent.

Believing that employee loyalty results in positive financial outcomes is one thing. Measuring that impact is another. To answer the question, “How loyal are our employees?” a article recommends asking the following four questions:

  • What impact do managers’ relationship styles affect our organization’s employee loyalty?
  • Does the organization make available the needed training programs and tools that allow employees to do their jobs effectively?
  • Does the organization recognize and reward employees who are committed to serving our customers?
  • Does the company and its leadership show clearly that employee loyalty is warranted and deserved?

These questions should be supplemented by industry-specific questions. Pinpointing the few key success indicators is a crucial first step. The next is to carefully measure these indicators in a clear and objective manner for a year. These data will give you a sense of where you stand in terms of employee loyalty and what performance metrics to track. Often, according to, the top four indicators are customer loyalty, employee turnover, productivity, and revenue.

A Harvard Business Review article recommends taking the following steps for balancing employee loyalty with corporate strategy:


    • Align career growth with company goals by providing employees with leadership development skills that have long-term impact on them and clearly influence organizational priorities.
    • Design work to foster autonomy and provide variety by allowing employees to gain deeper insights into different organizational areas and allow them to make decisions.
    • Focus on relationships among supervisors and colleagues. Today, organizations are shifting away from strictly hierarchical structures and emphasizing the importance of collaborative, team-based work.
    • Make the connection between employee values and the organization’s mission. Employees need to see how their work relates to what’s important for their employer.

Employee loyalty is a commodity that takes investment, maintenance, and strategy. When done effectively, the benefits are mutual.