Staff loyalty: a thing of the past?

A job used to be a long-term relationship that most of us stuck with through thick and thin. But times have changed and employers can no longer take such loyalty for granted. For small firms, the loss of a key staff member can be devastating - so what can you do to keep your staff happy and faithful?

“A couple of years ago, I took on an assistant to help with the administration and development of the business,” recalls Paul Kruzycki, owner of Ales by Mail. “She was a godsend. She took a load of weight off my shoulders and allowed me to get a lot more done.

“She became a major part of the business,” he continues. “But then she got an offer she couldn’t refuse.”

In fact, the assistant left as the three-person firm was preparing to launch a new website. The busy Christmas season was also approaching and the employee, as many do, lost interest during her notice period. “It had a major impact. I had to do a lot more work and we had to put back the launch. I felt very let down. I was quite upset,” Paul confesses.

The departure of a key employee can be devastating to a small firm, crippling the operation and damaging morale. Sadly, high turnover in the modern employment market is a fact of life, with employees more able and willing to move on quickly than in the past.

Figures show that this trend has slowed during the recession, most likely because people want to hang onto their jobs. But as the economy recovers, the merry-go-round is likely to begin again. Big companies are able to absorb losses more easily than smaller ones, besides having more resources to persuade staff to stay. But how can small firms protect themselves against damaging departures?

Coping with the impact of losing staff

As it happens, the loss of his assistant produced a silver lining for Paul, who was planning to take recession measures anyway. “It saved me from going to her and asking her to take a cut in hours,” he explains, adding that he took on a part-time employee as a replacement.

“But I tightened up our personnel procedures so that when someone leaves I know my rights and they know theirs, as well as their obligations to the company, and it makes the transition a lot easier.”

Alexandra Kelly of pre-employment screening firm Powerchex agrees that being small makes you vulnerable to losses. “It was something that was a constant worry to me, because I had a lot of key staff,” she admits.

Powerchex is now 35-strong, but the damage that can occur when a member of staff leaves is still one of Alexandra’s most pressing concerns. “Sooner or later the time comes when people want to do different things. We’ve tried to retain them at that stage, but it causes problems because word gets around to other members of staff that you can threaten to quit and get more money.”

One of her solutions has been to ensure that no member of staff is indispensable. “I always have redundancy in the roles,” she explains. “I spread responsibilities across the team, and everyone has to have someone next to them who knows everything about their job.”

Alexandra also focuses on keeping staff happy and loyal - to the business and to their colleagues. “We’ve built a sociable culture. People are friends. We have four or five company events a year outside work, such as bowling or boat trips.”

“We also have a CIPD-trained consultant who comes in once a week to talk to staff about their development. He does things like help them manage their time,” she continues, noting that her policies have been a success: “My key people, seven or eight of them, have been here since the beginning. We haven’t lost anyone.”

Communicating with staff to build loyalty

Small and medium-sized firms may not be able to offer the same kind of structured career path as a corporation or the same financial rewards. But they can give staff less of a “cog in the wheel” working experience, with a greater sense of personal investment in the success of the business.

Like Alexandra, Paul sees the value in taking a personalised approach to staff management, with an emphasis on communication: “I’ve always said ‘If there are problems, come and talk to me first’,” he points out. “It costs more in time and money to lose somebody completely than to talk to them to find out what the problem is. I think a lot of people underestimate how important staff retention is.”

Talking openly with employees is an approach that has worked well for Dorchester-based BPL solicitors where 30 staff have weathered harsh measures to survive the recession. According to director Mark Stimson, it was honesty about the firm’s financial situation and the sacrifices required to get through tough times that helped keep people on board.

“Those who survived the redundancy process have proved their continuing loyalty by sharing the pain with us and accepting suspension of benefits and a 20 per cent salary reduction,” he recalls. “Our financial options are limited, but it seems that openness is key.”

Maintaining professional relationships

Openness may be vital, but not over-familiarity. Back at Ales by Mail, Paul cautions against becoming personally attached to your staff. “You’ve got to keep a professional distance,” he advises. “It’s potentially incredibly difficult to have to sanction someone you’ve grown too friendly with.”

Alexandra agrees: “If you start showing favouritism, it will affect the morale of the company overall and it makes the person think they can do what they want. I’ve always maintained a strict separation between work and personal lives. I stay out of them. But that doesn’t mean I’ve put distance between myself and my employees professionally, during working hours.”

Is staff loyalty a thing of the past? Certainly not - but employers of all sizes can no longer take loyalty for granted. They may have to earn it by offering a personally rewarding environment if they want to keep good working relationships alive - and, when things do break down or an employee decides to move on, they should take sensible measures to protect themselves against the impact.