Once
upon a time there was a psychological contract, underpinned by the idea of “a
job for life”, according to which employers offered their employees a sum of
money in exchange for their loyalty and contribution to organizational success.
The content of the psychological contract has ever since been subject to a slow
but unrelenting evolution. At first, to meet individual wants, employers
started to gradually replace their compensation arrangements with reward
packages programmes, that is to say pay schemes based on appropriate
combinations of financial and non-financial rewards; then individuals
increasingly began to establish expectations about career prospects and opportunities
for professional development and growth. More recently, employees have concentrated
their attention on gaining additional skills and competencies, and on considerably
expanding their knowledge and expertise, with the ultimate aim of increasing
their marketability.
Increasing
employee marketability, notwithstanding, more than favouring individual’s
loyalty is likely to favour employee mobility in the labour market. It could be
thus contended that whereas the original version of the psychological contract essentially
aimed at fostering individual’s loyalty, it tends nowadays to ease employee transferability.
With
respect to this point, employers seem to take an ambiguous position. They are
aware of the circumstance that retaining employees in general and talented
individuals in particular represents a daunting feat to perform. Individuals
attach great importance to broadening their experience so that many employers
have introduced internal and international mobility programmes within their
organization, with the ultimate aim of retaining their talents. On the other
hand, nonetheless, organizations constantly seek talented individuals in the
relevant labour market and offer them generous reward packages and career
prospects. The former activity clearly supports loyalty, whereas the latter
definitely plays a detrimental role in this respect.
Whilst
some individuals, especially young people, literally struggle to find a job,
some others find it relatively easy to change job rather frequently. It is not thus
uncommon for talent acquisition specialists coming into contact with
individuals whose résumé contains an employment history clearly showing that these
candidates change employer very often and sometimes even too often. Organizations,
nonetheless, are usually keen and enthusiastic to recruit these individuals,
sometimes with a pinch of satisfaction for the candidate acceptance of their
offer, overlooking that whether an individual has easily and heartlessly left
his current employer for a more attractive reward package this might do it
again and again in the future. It clearly depends on how the person will fit in
at his/her new company, but it regrettably also depends on the opportunities
which other employers may offer to the individual. In the incoming future, the
new employer might hence turn to be victim of this individual behaviour, too.
Whether
the one size does hardly fit all in general, it definitely fits even less all in
this instance. Individuals may leave their employer for countless reasons so
that it sorely depends on the circumstances; organizations cannot be wary of candidates only because these
change employer frequently. The first step to take in order to favour individual’s
loyalty is never ever making promises which might be hardly kept, describe the
workplace and the role differently from what these actually are and undertake
unrealistic career prospects.
Individuals
are increasingly keen and eager to broad their knowledge and gain valuable, useful
experience. Yet, employees are growingly fascinated by the idea of working in an
international environment and of being offered the chance to move abroad for
short and long assignments or even permanently. The generous reward packages
and the more favourable terms and conditions of employment habitually offered
by the new employer, nonetheless, clearly do also play a role in individual
decisions to leave or stay with an organization.
People
who often change employer dramatically increase their marketability; their résumés
look typically impressive and especially whether their marketability has been
gained in renowned organizations, their chances to receive new employment offers
grow significantly. These individuals are essentially “trapped” in somewhat of a
virtuous circle: more frequently they change their job, more considerable,
valuable and wider their experience and more numerous their chances to receive new
job offers from different employers. More often than not, these individuals do
not even need to look for a new opportunity, but just await recruiters to find
them. Social networks are powerful from this point of view; many recruiters
incessantly look for passive candidates, that is to say individuals who are not
actively searching for a new role, but who would be sorely interested in new
good employment opportunities whether offered to them.
It
can be argued that, by actively looking for active and passive candidates and
making these attractive employment offers, employers in many respects encourage
and favour competition in the labour market to the detriment of employee’s
loyalty, which may be no longer perceived by employers as an individual asset and
consequently by applicants as something to be proud of. Whereas in the past job
seekers tended to limit the number of employers listed in their résumés,
eventually extending, according to the role filled, the length of employment
with those considered most relevant to the position they were applying for,
this does no longer occur nowadays. Recruiters in fact, unless of conspicuous
exaggerations, tend to pay lip service to the quantitative aspect of past employment.
By contrast, in some instances this seems to add value to the overall quality
of the curriculum vitae in that the considerable number of records contributes
to depict the candidate as a person who has gained a broad experience in
different contexts and under different circumstances.
Employees
aim at gaining new experience and broadening their knowledge, and relentlessly
look for new employment opportunities enabling them to attain their objective.
Employers on the other hand unremittingly search for people who have gained a
relevant and considerable expertise under different circumstances and in
diverse organizational settings, preferably in countries with different
cultures. It can be hence inferred that employers are perfectly at ease with
résumés rich of employment records; perhaps in that each employer labours under
the illusion that things will work differently in its case.
Can
be therefore contended that employee’s loyalty is no longer regarded by
employers as a significant employee value? Definitely not, the costs associated
with recruiting external candidates, especially talented individuals, are definitely
high. Yet, the risk that after having left the organization an individual might
continue to use the information gained during his/her previous employment
relationship is considerable. All in all, employee’s loyalty can and should be thus
still considered by employers as an individual significant and desirable trait.
Employee’s
loyalty seems to be destined to stay high at the top of employers’ and HR
professionals’ agenda also for the years to come. Corporate loyalty seems in
fact not to be perceived as an important value by Millennials. Whereas some studies
show that Generation Y represents the most loyal generation to their favourite
brands, the findings of several investigations of a different type, conducted
over the last years, reveal and confirm that the majority of Millennials do not regard employer loyalty
as a value and let alone as a priority.
The results of the different surveys, both as
regards the rate of people claiming to have plans to stay or leave their
employer and the idea Millennials have about loyalty, are at times sorely
conflicting. Yet, some remarkable divergences also emerge when comparing the
answers provided by Millennials and HR professionals to the same questions. Notwithstanding,
these studies at large suggest that these individuals are mainly interested in
work/life balance, professional growth and success, career prospects and in pursuing
personal interests. Millennials appear to be resolute and ruthless in the accomplishment
of their purpose and seem to have no hesitation in leaving their employer
whether this cannot ensure them the attainment of their objectives and the fulfilment
of their aspirations.
To enhance employees’ loyalty, employers
should invariably take heed of all of these individual wants, which are not
exclusively typical of Millennials, but rather of all of today’s employees, and
should hence constantly adapt their human capital practices so as to meet their
expectations and needs. The real problem is that nurturing employee’s
loyalty proves to be a daunting task to perform for every employer.
The
most effectual approach to encourage and foster individual’s loyalty in the
workplace is arguably that to timely plan and favour employee development and
growth from within the organization. Nonetheless, not all of the professional
and strategic roles within a business can be actually developed internally,
whether there are no employees having the basic attributes so that this
approach cannot be invariably adopted irrespective of the circumstances and
roles. Moreover, regardless of the way individuals fit in their organization,
these might sometimes find it objectively difficult to resist the temptation to
change organization, colleagues, workplace, location and corporate culture.
Whether on top of this it is also offered them an attractive reward package, it
is virtually impossible for individuals do not accept a new offer of employment.
Whether
employers, also by means of scenario planning methodologies, accurately plan
their current and future staff needs and rigorously map the existing organizational
roles in order to find out which of these are due to gain further strength and
strategic significance in the future, these will be in a position to identify
the internal candidates matching the organizational needs, that is, the
employees who can effectually fill those roles and timely plan for their growth
and development.
Offering
people, who have the traits and attributes to take further responsibilities and
fill strategic roles in the future, internal and international mobility opportunities
and the chance to participate in local and international projects would enable
employers to develop talent from within the business, whilst offering these individuals
the opportunity to broad their experience in different contexts and environments.
Buying
talent off the shelf clearly demands little effort, but not necessarily less
resources, whereas developing and building it internally definitely takes more
time and efforts. Both options essentially pose challenges and offer
opportunities; nonetheless, whenever employers decide to opt for the former method
these should be prepared to eventually start back the recruitment process anytime.
By adopting the latter approach, by contrast, the likelihood that an employee
might leave the organization should result considerably reduced. Yet, the
adoption of an approach aiming at developing talent internally should help
employers to retain quality individuals and to straightforwardly attract from
the exogenous environment, and subsequently retain, the individuals having the
skills and expertise unavailable within the business.
Employee’s
loyalty at large can still continue to be regarded as an important
organizational asset; nonetheless, its significance has in recent times apparently
considerably weakened. The incessant changing circumstances and the
organizational ever-varying wants and woes account for employers having to suddenly,
quickly make decisions so as to tackle and address as early as possible the
arising problems. More often than not, the adoption of this approach entails
employers to acquire in the exogenous environment, that is, the external labour
market the talent necessary to support the organization. The lack of a people resourcing
strategy and of an accurate succession plan can clearly contribute to make
matters worse.
Employee’s
loyalty might no longer be universally perceived as a significant value but
employers, by means of their recruiters in the first place and of their
managers and HR function subsequently, should do whatever they can to ensure
that a new recruit stays with the organization at great length or, if the worst
comes to the worst, at least for the time enabling them to identify and develop
internally the individual who fits the role the most and can ultimately perform
it for the foreseeable future.
