Employee loyalty at companies in Illinois and across the country worsened over the past year. Dissatisfied workers continued to quit in droves, with no regrets and despite recession concerns, and surveys show more are planning to exit.
Employers have reason to worry and need to be laser-focused on fixing the costly problem, experts say. Employee loyalty at Chicago companies appearing on the Tribune’s list of Top Workplaces declined between 2021 and 2022, falling the most of any sentiment measured, according to Energage, the Exton, Pennsylvania, consultancy that compiles the annual list. And employee loyalty was lower at Chicago companies this year than it was nationwide.
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While the COVID-19 pandemic is blamed for ushering in the “great resignation,” there has been a long-term decline in employee loyalty, notes economist and Northwestern University Kellogg School of Management associate professor Benjamin Friedrich.
“Some would argue the decline in employee loyalty starts as far back as the 1970s because global competition started rising, and this was the beginning of the decline of unions in the U.S.,” Friedrich said.
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Several trends over the last 30 years have accelerated the decline in loyalty. “Stagnating or decreasing real wages for middle-class workers, rising pay inequality and large gains in manager compensation,” are factors as is the shift in corporate focus to maximizing shareholder value that occurred in the late 1970s and 1980s, he said.
But the pandemic exacerbated the problem. The “psychological contract between employers and employees, kind of an implicit understanding of what each owes the other,” took a hit, said Brooke Green, Aon Plc’s head of human capital solutions for North America.
“One of the things we saw during the pandemic is when companies started slashing head count during a time when people were struggling … the working population might have seen that as a breach of that psychological contract,” she said. “The backlash of that was people not feeling as committed to their organizations maybe as they had in the past.
“If we look at turnover as a mark of loyalty, we have seen a spike in turnover.”
[ [Don’t miss] Top Workplaces 2022: See the full list and read about the companies ]
In addition, the pandemic prompted people to reconsider what they value, where work fits in and doesn’t, and shifted the balance of power.
“The pandemic led to labor shortages in many parts of the economy,” Friedrich said. “That provides workers with more leverage, more options, and people are willing to switch to achieve improvements. I think economists were expecting this to somehow fade out at this point, but it really hasn’t.”
Nearly a third of workers responding to a survey this summer by The Conference Board said they were actively looking for a new job and planning to quit. Meanwhile, a whopping 94% of those who left their jobs in the past 12 months said they didn’t regret leaving. Only 23% said they would accept a job at their previous employer if offered one.
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Generation-related factors are contributing to higher quit rates, said Rebecca Ray, executive vice president of human capital at The Conference Board.
“A lot of this is driven by millennials,” she said. “When they first entered the workplace, we were in the recession of 2008 and 2009. (Employers) got that generation on the cheap. Organizations hired them at lower (salary) levels because they could.
“They (millennials) are at a stage in the arc of their working lives where if they’re going to make a move, they’re likely to do it to advance their careers. They’ll have anywhere from a 20 to 30% bump in pay quite often. They will move more quickly.”
But as the pandemic lingered, it had an impact on how multiple generations look at work, she added.
“People started saying I don’t miss the commute, the bad boss. … I can’t see myself doing this for the next 20 years,” she said.
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Employers who think recession concerns will give them more leverage over workers should think again, she and others said. While slowing economic growth makes the decision to quit riskier, The Conference Board’s survey results showed workers continue to want more flexibility and higher pay, and will go elsewhere to get it, Ray said.
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South Holland-based Robinson Engineering Ltd., which appears on the Tribune’s list of Top Workplaces and is among the companies on the list that ranked particularly well for employee loyalty, offers generous perks and looks for opportunities to help employees advance.
The civil engineering firm employs 121 people, and the average tenure is about 18 years, said Denise St. Pierre, director of organizational development.
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Jennifer Prinz has worked at the company for 22 years. She started out as a design engineer and moved up to project manager, municipal engineer and is now director of engineering.
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“I was here slightly less than a week when I made up my mind I wanted to be director of engineering,” she said. “They put me in positions, projects and situations, where I could grow and develop, so that I could fulfill my end career goal. For employees that want to grow and develop and rise through an organization, providing a clear path, being supportive and encouraging, that is key to making people want to stay at an organization.”
CEO Aaron Fundich noted the company recently tweaked its organizational chart to provide more visible opportunities for staff to move up, and two years ago the company launched Robinson University, an internal training and development program.
To help ensure open and continuous lines of communication, the company’s managers do quarterly “stay” interviews with key employees to find out why they stay.
“We take that information and try to build on it,” St. Pierre said.
“Robinson is very big on communication, said administrative manager Claudia Ruiz-Martinez, who views that as a major plus in working at the company. By being “kept up to date on all the goings on, I feel included and part of the bigger picture and part of something good,” she said.
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The company’s benefits package and perks include education reimbursement, hybrid remote work options, and giving staff access to company-owned condominiums in Michigan, Wisconsin and Missouri. Employees need only pay the cleaning fee.
“In a business like ours, in a service industry, it really is about the people,” Fundich said. “When you treat your people well, and they are fully engaged in what they do and there’s open lines of communication between employees and their individual managers and the upper levels of corporate management. … That’s key.”
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At Chicago-based real estate company Dream Town Realty, another Top Workplace that ranked high for employee loyalty, creating a culture of collaboration and generosity helps retain staff, CEO Yuval Degani said.
“This is a highly competitive business but in our culture, agents collaborate. We (have) growth groups where 10 of them meet together for periods of time and brainstorm and all share what works for them.”
Broker George Selas has worked with Dream Town for 20 years and likes the collaborative environment. He said he shares his knowledge and has learned from others, including those who have less experience.
“We are supportive of one another” and celebrate each other’s successes, said designated managing broker Heather Hillebrand, who has been at Dream Town for 16 years.
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“It’s a give and take,” Degani said. “Everybody grows, and everybody wins.”
At Dream Town Realty, there is no hierarchy. Leaders are easily accessible, Hillebrand and Degani said.
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The company shows it values its team with perks that include a multi-session meditation course the company pays for, free massages and employee parties and events. Every year top producers are treated to a three-night trip to Mexico, where they stay in oceanside villas with a private pool and chef.
“We have to really not take for granted the fact that people are choosing to affiliate with us,” Degani said. “In our industry, people have a lot of choices, and we feel honored that they choose to be with us.”
Downers Grove-based information technology consulting services company Sentinel Technologies Inc., another company that ranks high for employee loyalty, has been able to keep top technology talent in part because of the variety of career paths it offers employees, co-President Brian Osborne said.
“We give them exposure to more environments, more training, more opportunity to expand their skills,” he said. “They can learn other tech and meet people in other areas like cloud technology, network technology, data centers. That’s very compelling to people.”
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That’s what attracted Angelo Vinceslao. He joined Sentinel three-and-a-half years ago as a support analyst and was promoted last year to infrastructure and user experience manager.
“A lot of times with organizations you get pigeonholed” or have to wear every hat, he said. “Here, there’s a lot of different segmented roles you can jump into, and if you don’t like one, there’s a lot of other places that you could potentially move into.”
Sentinel Technologies has focused on creating a workplace community where people feel connected to one another,” said Kelly Duffy, employee experience manager. It does that by showcasing employees’ accomplishments and rewarding them with quarterly prizes and superstar awards, she said. It also uses digital channels to provide updates on the company and space for fun. The company has an online music group, book group and do-it-yourself project group made up of employees.
Multiple factors have enabled the Cooperative Association for Special Education to avoid turnover, said Executive Director Mary Furbush. The Glen Ellyn-based organization provides services for students with physical, emotional, developmental and other disabilities and training and coaching to staff.
“There is a visible mission to serving students,” she said. “That’s No. 1.” There’s also strong collaboration and a commitment to their professional growth, she added.
The retention rate among workers at Captive Resources is “somewhere around 98, 99%,” said Nick Hentges, CEO of the Itasca-based insurance consultant and broker company.
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“My belief is if we take care of our colleagues and do it in a way that makes them feel fulfilled, happy, challenged and rewarded for the efforts they put out, they will take great care of our clients. That has worked really well over the last 30 years,” and it’s the right thing to do, he said.
Indeed, the company crossed $2 billion in premiums in 2017, $3 billion in 2021 and projects that will grow to $6 billion in 2026.
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The culture is one where feedback and collaboration are encouraged as is transparency, said Rose Frieri, chief human resources officer.
Captive Resources holds monthly staff meetings to make sure employees know what’s happening throughout the organization and conducts employee surveys. It gives staff flexibility through its hybrid remote work policy that was in place pre-pandemic, but that has since expanded. Before the pandemic, staff could work remotely one day a week. Now they can do so three days a week.
Key events in staff members’ personal lives are celebrated and include monogrammed blanket baby gifts for newborns, and for newlyweds a one-night hotel stay with breakfast and a gift card for dinner.
Loyalty doesn’t just happen, Frieri said. “You have to earn it.”
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Francine Knowles is a freelance writer.
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