Loyalty or what?

Evergreen · July 2005

Hello all.

I am venting mostly, but wondering what everyone's seeing for retention these days. I have lost 3 ee's in the past 2 months due to pay. I have a competitive plan, at least I think I do. I order yearly comp plans from a national organiztion and we review all positions annually.

We cannot afford 6 figure salaries, especially when comparable salary surveys say otherwise.

Am I naive, or is loyality only limited to money these days? Additionally, are companies kissing off salary standards and making exceptions for the "star players"?

As owner of my firm, I watch this site a lot. I don't have a HR staff, as our firm is too small. But, I do value all your input and see all you posters as level-headed HR professionals (most of the time, heh-heh).

Thanks,
signed...still reeling

Gillian3 · July 2005

I think that "or what" is the answer. My opinion is that there are so many competing interests and the employer is just one. Sometimes employees leave for money, but maybe that is driven by family needs, need for better insurance because of illness or a host of other things. Sometimes employees leave because they don't like their supervisor or their job. Further, I think that the old expectation that someone will work for a company for a long time and both will be loyal to each other is long gone. Employees don't expect loyalty from an employer because they see the old security gone so there is no incentive to be loyal in return. Maybe your problem is just a blip and you are getting a year's worth of quits in a short time, there won't be any more for a long time, so things will even out.

Evergreen · July 2005

Yea,I can understand if a guy was employeed for a year or two, but 5 months? I was just blown over on that one, didn't even give it time. The new job pays 65% over this.

perhaps it is a blip, it just kinda stings.

Gillian3 · July 2005

If a new job is 65% higher, there isn't much you can do to retain the person. If the 65% is the same job at another company, you may have a salary issue at your company. If it is in a different field, that reflects nothing more that some fields pay higher than others.

TN HR · July 2005

It's tough when you have to deal with attrition over $$. Are the comp surveys you are ordering realsitic for your locale? Have you though about conducting your own wage survey? I don't think you are naive in thinking that loyalty should go beyond money.

Perhaps you should take a look at your complete compensation package, both direct and indirect. What are you offering your employees that a competitor is not (or vice versa)? What else are you uncovering during your exit interviews?

Gene

Evergreen · July 2005

thx TN, exit interviews are good. But all they have pointed to is the money.

The surveys are gauged to the state, West coast, and business sizes. They seem accurate, I think it's just the blip as said earlier.

TN HR · July 2005

Potential red flags that lead me to believe you have a comp issue:

"Surveys are gauged at the state, west coast and business sizes"

You need to also look within your locality. Statewide surveys, in my case, mean nothing. I need local data. Also consider surveying your industry (if possible), not just business size.

"Exit interviews are good, but all they have pointed to is the money"

We may be on to something here.

"65% increase in salary"

Again, if the job is comparable in terms of industry, field (as G3 pointed-out), etc, then see answer above..

Gene

E Wart · July 2005

I think that if you have a good company and are being fair to your employees, sometimes it "hurts" when they up and leave.
One thing you may want to look at is to make sure you are hiring the right person for the right job. Some folks want the "large company" atmosphere, others like working for a smaller operation where they have a more personal input. Also, you might want to sit down and look at all of the benefits you offer your employees. Something good to review with employees before they are hired. May be you can't pay a higher salary, but what does your time off program look like or are you willing to provide more flexible hours than other places, or are you closer to where they live, or do you support the community and encourage employees to do the same. There are a lot of non-straight salary things that you can highlight and let employees know about.
I agree that looks as if this employee may not have given it a chance. However, they may have applied for the job they eventually took when they applied with you and nothing was available. I hope they are taking it for the work they will be doing and other items other than just straght money (even though a 65% increase might be hard to turn down, other things the same.)
Don't beat yourself up too much.
I am the type of person that has to "agree with" where I work because I am very loyal. One of my old companies changed drastically and the President/CEO told the employees if they wanted loyalty, get a dog!! It was a good thing that I had left this job because I would have started looking with this comment.
Younger folks are different than their grandparents. We have to learn to appreciate them for what they are and can give.
E Wart

Crout · July 2005

>Am I naive, or is loyality only limited to money these days? Additionally, are companies kissing off salary standards and making exceptions for the "star players"?

If by "loyalty" you mean the willingness of your employees to maintain their employment with you, I'd say that relationship definitely has its price, regardless of how they feel about you. As Michael Corleon said, "It's just business." I currently work for two of the finest people I've ever been associated with in my 25-year professional career. But if the right opportunity came along I'd leave, no question. By "right opportunity" I mean the right combination of compensation, work environment, and duties. As to your second question, I'd say that making exceptions for star players is how you keep a competitive edge. In fact, being able to accurately identify the star players is a hallmark of effective leadership.

Evergreen · July 2005

thx Crout,
Great perspective - very much appreciated.

marc · July 2005

I would look closely at the new job that is 65% higher pay than yours. If you can get ahold of the job description and compare it to the resume of the departed EE, you might find that he/she was underemployed.

Looking for and finding jobs is definitely an under developed skill for most of us. It could be that the EE in question just took your job as a temporary parking spot - needing some level of income while he/she continuted to search for better utilization of an existing skill level, or..

He/she could find out that this job pays higher for a very bad reason - lots of travel, lousy conditions, high performance expectations that take an 85 or 90 hour week to meet - things like that.

TN HR · July 2005

Crout nailed it! Expecially in the last sentence! BAM!

Pixie · July 2005

You also have to take into consideration company size. Are the employees that are leaving going to larger companies? The company that I work for is a very large company, We hire Engineers, Product Managers and so on from some of the smaller companies and our compensation is generally twice as high as the smaller firms.

LivindonSouth · July 2005

'Loyalty' to one's employer is an illusion now that in times past could have been reality. It was reality then only due to uncertainty, and general uneasiness caused by lack of transportation, lack of opportunity, limited training and the fear of repeating the depression. For at least the past 15 years loyalty has been to oneself and family, not to a building or a logo or one who doles out checks.

People in my dad's (the greatest) generation typically worked for one employer for almost 30 years. The staggering statistic I see today (although I'm not sure I believe it) is that the average worker will change jobs eleven to fifteen times. In the trucking industry, people will change jobs literally based on the color of the Freightliner tractor or for 1 cent per mile. People in the finance business will change jobs due to a looser dress code. Others will change due to a twelve minute shorter commute. Some will change if the new building is a paler shade of neutral. There is no such thing as loyalty in the context you framed it.

Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

Judith · July 2005

I agree with Marc that the ee may have been underemployed. The job market is changing on a daily/weekly basis in my area - and maybe yours. Besides reviewing your salary information as already suggested you may need to review your hiring efforts as well to be sure you are putting the right person in the right job -- if so they won't turn over in 5 months. We have an employer's association in Charlotte to help smaller businesses that don't have HR folks -- perhaps you have one in your area or you could utilize some consultant help to review the problem. Paying a consultant will be less extensive than turning over your employees every 5 months. Good luck!!

Evergreen · July 2005

Thank all of you for your input - I truly appreciate it.

Its funny how ee's cry out for loyalty from employers, but when it's them - it's a different tune. True, Don, that ee's have become very ficle when it comes to employers and can change on a whim. As a business owner, I'm not sure how business in the USA can sustain - with lawsuits, turnover, high pay, etc.

Some of my associates source work to Romania, where 100 people apply and 98 are viable and willing to work for 1/2 the pay (for a full week nontheless) and no lawsuits or grief. When they post the same job in NYC, they get 10 applicants, none are qualified and they all want top dollar and sue for discrimination.

tsk tsk - and we wonder why business is off-shoring!

lee2 · July 2005

I second Judith's comment - A decent consultant should be able to give you a good answer with 3-5 hrs work.

LivindonSouth · July 2005

Whatcha reckon is the chance you'd find a 'decent consultant' who would accept a 3-5 hour job?

Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

marc · July 2005

Where is Price when you need him?

WT · July 2005

Although I direct the Human Resources now, I have been a union president in the past. This gives me some perspective on loyalty. It is my opinion that the downsizing, right sizing and other various actions taken by companies to help their bottom line in the last 20 years have pretty well pissed away employee loyalty. Instead of defined pensions, we now have 401k. These belong to the employee and are portable. They also relieve the employer from making contributions during the retirement years. Health care in retirement is taking a huge hit now as companies stop doing it. Many companies have two tier systems with older employees having better retirement and healthcare benefits and younger employees left out. The message is clear to younger employees. They are on their own and need to look out for themselves. I see this in the market every day. Employers made money when they spent this asset (employee loyalty). Now, turnover is a cost of doing business. There is no free lunch.

LivindonSouth · July 2005

[font size="1" color="#FF0000"]LAST EDITED ON 07-26-05 AT 03:46PM (CST)[/font][br][br]And I am certain, based on your experience, that you also know that union demands for wage increases, additional and improved benefits and restricting an employer's right to move his own employees around has been the single largest contributor to jobs leaving this country and employers reducing perks and benefits where they can.

Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

Gillian3 · July 2005

Are you sure that unions are the single largest factor? In the 1950's, when the unionized work force peaked at around 35% of the US work force, employers paid for retirement benefits and health care insurance for employees and dependents. Those benefits were certainly driven by unions as well as employers who didn't want to be unionized so matched those who were. The non-government unionized work force in the US is currently somewhere around 10-12%. That small number is going to drive the continued reduction of benefits and outsourcing across the entire spectrum of employment?

LivindonSouth · July 2005

Gillian3, you are doing a bit of exaggerating. What I have read and am told by heads of businesses is that unions have been (and I assume still are) the single largest factor. Wages are where they are in this country due in large part to union efforts, regardless of whether a place is unionized. Employers go off shore to hopefully get an acceptable product for much, much cheaper wages and for reduced government demands and controls. This does not revolve around what the average union representation in the US workforce is. Their impact will always be felt regardless of those numbers. Democrats are in favor of raising minimum wage and some states, like your own, have their own minimum wage. This is another huge factor in decisions to move offshore. Our corporation is involved in the same decisions and we have many overseas and non US facilities. You think it's because of some sort of desire on the part of industry to have diversity represented through establishing a base in other countries? You might actually believe that. Government controls, unions and wages, with wages being driven by government controls and unions.

Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

WT · July 2005

I cannot really agree that union demands are the largest factor in moving work off shore. For instance, WalMart is not a union shop but their buyers pressure suppliers every month to give them products cheaper. Eventually, this becomes the road to China. Union work rules do cost money and so does union scale. However, Americans do not want to live in a hut with a dirt floor shared with goats and chickens. They are looking for a certain lifestyle and the wages have to support that lifestyle. When one wage earner could not support a family, the spouse was sent out to work. American workers do not want to take on the lifestyle of a third world country in order to compete. The vast majority of workers in this country are not represented by a union. Unions do become a convenient excuse for managers that do not want to perform discipline, confrontations and other unpleasant tasks. Just remember, companies with unions have prospered and made money and companies with no unions have gone broke. The difference is good management.

marc · July 2005

There is some truth in your perspective, but that two wage earner household does not hesitate to drive to Walmart for their purchases.

A wise old man once said, "Money may not be everything, but it's way ahead of whatever is in second place."

Obviously a narrow viewpoint, but anyone would be fooling themself to think it does not play a big role.

Unions have played an important role in our way of life.

My economics professor always compared the need/power of unions to a pendulum on a clock. It could go too far in either direction.

LivindonSouth · July 2005

All I know of your experience is that you were a union president and now work in HR. I have lived in Mississippi all my life, most of it in the Mississippi Delta. for many years I participated with government entities to recruit industrial prospects. I can tell you for a fact that this state has recruited hundreds and hundreds of industries from the north and they came for three reasons: Cheap wages, to get away from the union shops they had in their northern plants and the tax incentives offered by this state. Most all of those industries are now gone from this state. All of them that I know about left the country and either are now out of business, in Mexico or offshore. For decades and decades the unions in the north have driven industry to the south. The falacy in the thinking was that they could escape the union and live happily ever after. Often the organizing campaigns followed them South, sometimes they went broke. But, more often than not, as soon as the tax exemptions expired, they left altogether. Not a one of them moved back to the north, that's for sure.

"Just remember, companies with unions have prospered and made money and companies with no unions have gone broke." That's your comment, not mine. I have no idea what you base it on. I have worked in union shops and know of many others that went broke. I have worked in non union companies that are 8 billion dollar organizations. Unions do not equal a business of prosperity. That sounds like a good organizing slogan though.

The last time I sat at the negotiation table with the IBEW, the international rep for the union said, in his opening remarks, "Well, we sure don't want to see y'all close down and go to Mexico, but we do want a 23% increase in wages." What a comment! His demand for a 23% increase is precisely why that company will eventually go to Mexico. The owner is Chinese and he sure as hell cannot continue to manufacture television cable in this country with those demands.

Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

marc · July 2005

Competing in the world is quite a bit different than just competing in the U.S. There are lots of forum contributors who are also historians who can wax eloquently about the harsh economic realities that have forced a change in the way we do business.

I, for one, love the old work ethic that played a part in making our country great. Whatever the reasons for the change in the work ethic, it has indeed changed.

I went to a store to buy an Iron last night - Bed, Bath and Beyond. I took my 20% off coupon thinking that I could afford to pay a bit more for an American made iron - even if I was paying more for the same quality. Guess what, I did not even have the choice of an American made iron. Germany, France, China, and Taiwan were my choices. Even the Black and Decker was foreign made.

For whatever the reasons, we are getting our butts kicked at the consumer level - it's a global market out there and the Union Contract is one of the reasons we cannot compete with the $20 per day Chinese worker.

I don't say this to start an arguement, and I agree with the assessment that corporations long ago spent the loyalty coint out of circulation - but I don't believe there was another feasible choice.

JM in ATL · July 2005

I agree and disagree with a lot of the responses given.

I worked for a company that I was planning on being loyal to for the rest of my career (however long that may be). I was sorely underpaid for what I was doing, but I didn't care.

The company had a strong mission and focus, the people were phenomenal and the owner was the best boss I'd ever had. I probably would have worked for him for free (if I didn't of course actually need a paycheck).

I don't think loyalty is about money. I think it is about how an employee feels about their job, their company and their co-workers.

At my former employer I felt appreciated, acknowledged and accepted. I was held accountable for my work and was recognized by my boss for what I did - once in front of the entire company during his annual Holiday Party speech.

You can't buy that kind of job satisfaction - you can't fake that kind of environment and you definitely can't expect a multi-billion dollar enteprise to offer such a close knit group of highly cohesive workers.

If you are a small firm owner and you find people are leaving for more money, then you aren't doing enough to keep them - regardless of what you pay. It doesn't have to be in benefits or bonuses or salary. It doesn't have to be in cheezy recognition programs. You need to ACKNOWLEDGE their hard work and dedication. You need to APPRECIATE their commitment to you and your company and you need to ACCEPT them into your work environment as if they had already been there for 10 years. Nobody ever wants to feel like an outsider.

You can't grow your business without people and you can't grow people if you without acknowledging them. Start there - worry about money later.

BTW - Nobody EVER left that company for more money, even though they could have easily made it elsewhere.

System · July 2005

JM in ATL,

From any statistics I've ever seen, and from all my experiences in HR, the number one reason why people stay with a firm is because they feel Appreciated, which you reiterated so well.

Evergreen, if your staff feels appreciated, and given that their compensation is at least livable, chances are you will begin to have less turnover. You may have problems with a manager and not know it. Since your a small firm, employees may view the relationship between you and your managers as closely-knit and unapproachable. Take a look at your managers and do a few 'tag' interviews about how things are going.

The old addage is "People don't leave bad companies, they leave bad bosses."

E Wart · July 2005

I agree with this. One bad apple can ruin the entire basket. However, there is also a fine line. You can't run an operation with folks running in to "gripe" or pick at other employees all the time. However, you do need employees input and ideas. Just have to learn the difference between the two.
I have often thought about asking my hairdresser (he and his wife have a very nice shop with about 6-8 other hair dressers) if he had ever thought about teaching a class on how to treat your employees. I love to go there and just watch him work. He has the nicest manner with his employees. People must fight to work there. He has had folks for years. He compliments his employees in front of his customers, he thanks them for everything they do, he stops what he is doing to show them how to do something (but not in a critical manner), he will send someone out at different times to pick up food for everyone and pay for it himself, it goes on and on. These are the types of things that make a great leader and makes others want to work for and with you. Sometimes I don't know if they can be taught but just innate in an individuals personality.

E Wart

Balloonman1 · July 2005

I am a day late and a dollar short, but Crout's reply and JM in Atl are both dead on. Money is just one factor work environment and how you are valued are more important.

Also do you make the work environment fun? Pick up chips and salsa before your next meeting, or better for no reason at all. Make it a point to every day let at least one employee know you appreciated what they are doing...... JM is right nothing compares to that kind of recognition. BUt day in day out, to stop an employee who has been giving a little extra and say I have seen the extra effort and appreciate all the you are doing......is worth its weight in gold. Even occassionally a gift card to the movies, don't have to make it a formal program, it is the thought that counts.........

You want to create a work environment that people enjoy........

Okay stepping down off my soap box. Oh Evergreen I am not implying that you don't do any of that, just emphasizing it. I dont know how large you are company wise, but when is the last time you cooked hamburger and hotdogs for friday lunch for everyone..........did a little potluck you pay for buns & meat?

My $0.02 worth.
Balloonman...........

Loyalty or what?

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