Job interviews are an opportunity to see allegiances shift in real time. A candidate will usually refer to a prospective employer as “you” at the start of an interview (“What do you want to see from someone in this position?”). But occasionally the pronoun changes (“We should be thinking more about our approach to below-the-line marketing. Sorry, I mean ‘you’ should be”). That “we” is a tiny, time-travelling glimpse of someone imagining themselves as the employee of a new company, of a fresh identity being forged and of loyalties being transferred.
Loyalty is seen as a virtue in most situations: among friends, family and football fans. Employee loyalty, however, is more complex. It is more transactional. Friends don’t give each other performance reviews or fire each other for cost reasons. It is less reciprocal. A worker can feel attachment to a company and a company can feel precisely nothing. (Which is why people often feel more loyal to team members and individual bosses than to their organisations.) And too much of it can impose high costs.
Wage bumps and careers are built on people changing jobs. According to the Federal Reserve Bank of Atlanta, which tracks wage growth in America, in April job switchers were being paid 7.6% more than a year earlier; job stickers were being paid only 5.6% more. A little promiscuity on the part of other people can help those who choose to stay where they are. A paper by Nathan Deutscher, a Treasury official in Australia, found that higher rates of job-hopping in local Australian labour markets were associated with faster wage growth both for workers who switched jobs and for those who did not. Loyalty is nice; so is bargaining power.
Too much loyalty can harm workers in other ways. A piece of research published earlier this year by Matthew Stanley of Duke University and his co-authors tested how bosses felt about loyal workers. The researchers asked managers how willing they were to ask a fictional employee named John to work overtime for no pay. If John was described as loyal, then bosses were happier to dump more work on him. The reverse also applied: workers who did more work for no reward were more likely to be described by managers as loyal. Dogs are known for their loyalty, remember, but not for their brains.
Employers tend to be clear-eyed about what generates loyalty. Retention bonuses are an admission that the best employees might need a little nudge to stay. Actual loyalty tends to get nugatory rewards: a week’s extra holiday for 25 years of service? Netflix encourages its employees to speak to recruiters so that they know their worth in the open market and so that it can respond with counter-offers (an approach that makes more sense when you are prepared to pay top dollar and less so if you are in the non-profit sector).
Companies can nonetheless be wedded to the idea of loyalty. The group of employees who left Shockley Semiconductor Lab in the 1950s to found Fairchild Semiconductor was famously dubbed the “traitorous eight”. Some of that attitude still prevails. But unless you are a member of the mafia or a cleric, joining a competitor is neither treachery nor heresy. Indeed, boomerang hires—people who leave an employer and then come back—can offer a valuable blend of known quantity and new skills.
Society can suffer if there is a surfeit of employee loyalty. A paper on whistle-blowing, published in 2019 by James Dungan of the University of Chicago and his co-authors, found that employees were more likely to report wrongdoing if their concern was fair treatment of people outside the organisation and less likely to do so if they were more motivated by loyalty. Other research suggests that competitive situations can encourage loyal members of one group to cheat in order to best another.
Employee loyalty can be great. Companies want workers who feel committed to them, who are prepared to go the extra mile and not join a rival at a moment’s notice. Workers want to believe in and belong at a firm, confident that it warrants chunks of their finite time on Earth. It is better all around, for job satisfaction and for performance, if employees stay put because they feel invested in their organisation than because they haven’t got a better offer. But loyalty in the workplace is a self-interested decision, not a moral one. It should be contingent on being treated well, not a habit that becomes harder to break. Stay where you are because you like it, not because to leave would be immoral. ■
Read more from Bartleby, our columnist on management and work:
How to beat desk rage (Jun 1st)
Why are corporate retreats so extravagant? (May 25th)
Businesses’ bottleneck bane (May 18th)
Also: How the Bartleby column got its name
"loyalty" - Google News
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Why employee loyalty can be overrated - The Economist
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