Employee loyalty - what it is and how it differs from employee retention

Hybrid working and home office have many advantages, but they also cause a creeping process of alienation from the employer. Against this backdrop, how can we retain current and future employees and prevent resignation and a lack of a sense of belonging from leading to an exodus?

It has seldom been as easy as it is today to survey the job market and thus one's own market value. Most people don't even have to search, because the good ones are quickly found by recruiters. Highly qualified people and specialists in particular are courted and inundated with offers on an almost daily basis. If they then find themselves in an unsatisfactory work situation, feel unappreciated or lack the necessary loyalty to their employer, they are quick to jump ship.

This is where employee loyalty comes into play. This is classically described as follows:

• Voluntary, preferably lasting loyalty
• High level of commitment and enjoyment of work
• Ambition and entrepreneurship
• Identification and emotional connection
• active positive word-of-mouth advertising

This kind of loyalty comes from pull factors such as trust and attraction - not from pressure or coercion. Honest loyalty is then demonstrated by willingness to perform, fairness, reliability and sincerity just as much as openness and passion. But an employer does not get all this as a matter of course or for an indefinite period. Employee loyalty has to be earned again and again. And it pays off on both sides, because a loyal employee is satisfied and thus presents the positive image of the company to the outside world.

But what distinguishes employee retention from employee loyalty?

Employee retention, often also called retention management, is about measures that a company actively initiates in order to bind the employees it wants to keep to the company. The very word retention implies something forced and involuntary. Loyalty, on the other hand, is a relationship of trust based on ethical values.

Employee loyalty arises in many different ways. There are three main types:

• emotional
• factual
• monetary

A emotional Binding can arise in either a normative or behavioral way. In the case of behavioral commitment, external emotional aspects such as the short commute to work, flexible working hours, home office and four-day week play the greatest role. Normative commitment, on the other hand, arises from an inner obligation.

The factual connection is regulated by the employment contract, thus manifesting not voluntariness but obligation and dependence.

At the monetary bond financial interests are in the foreground. Although this can "buy" the loyalty of employees, it does not come from the heart and only exists until someone else offers more.

Employee loyalty, on the other hand, cannot be bought; it is achieved through meaningful work and an appreciative employer-employee relationship. To the factual circumstances are added the emotional values that a working relationship possesses. In the long run, this is the only constellation that allows genuine loyalty to develop.