Turnover. Absenteeism. Quiet resignation. Does this sound familiar ?
Then consider investing in an employee loyalty program.
Employee retention is a winning HR strategy and a profitable investment that has positive repercussions on numerous fonctions:
• the turnover rate;
• job satisfaction and performance;
• absenteeism and sick leave;
• professional development;
• recruitment by becoming a competitive advantage as employer of choice.
The advantages of a loyalty program are numerous and can be measured by various HR performance indicators such as the employee turnover rate and an employee satisfaction survey.
Emilie Pelletier, Partner at Humance and co-author of the book « How to attract and retain employees » indicates that when implementing a loyalty plan, “an essential condition for its success is to create consistency with the employer positioning” . This consistency must be put in place by organizing workshops and meetings with all managers and senior management to determine employer positioning; this step is very important and crucial to its success.
A loyalty plan is established over a period of 3 to 5 years confirms Emilie Pelletier. Why is this period necessary ? To ensure the success of a loyalty plan, this period is required since management behaviors must be changed.
Luc Hanna, director, talent management at Willis Towers Watson, confirms that HR teams are overwhelmed at the moment. He specifies that « candidates and employees are very demanding now and are asking, among other things, conditions regarding teleworking and the flexibility to work when they want and where they want. » Add to this the challenge that “the new generation is very impatient in their career plans” .
Since the pandemic, HR teams have been in high demand. Add to this, the labor shortage, rampant inflation followed by increasing wages. There is no shortage of challenges !
So why invest in an employee loyalty program ?
The lack of time and resources can easily serve as valid arguments for neglecting this HR strategy, but “employee loyalty still remains an important issue in 2024,” explains Luc Hanna.
A surprising study form G&A Partners estimates that the average cost associated with turnover rate between 30% and 150% of the employee’s annual salary. For senior management positions, this can represent up to 200% of annual salary. The cost is important!
— A surprising study form G&A Partners estimates that the average cost associated with turnover rate between 30% and 150% of the employee’s annual salary. —
A high turnover rate also has other negative repercussions such as :
→ reduced motivation and performance of team members;
→ time and resources to train, ensure the transfer of knowledge and integrate a new employee;
→ the learning curve of the new recruit who must also develop his credibility with his team, stakeholders and senior management;
→ the HR team which must create payroll and new files.
In the book “How to attract and retain employees”, the condition for the success of a loyalty plan is directly linked to employee experience and is influenced by 3 teams:
1. Senior management
2. The human resources team
3. Team managers (the most important!)
Without this symbiosis and collaboration between these 3 teams, the efforts will be diluted and the message will not be transmitted to the employees. (1)
Luc Hanna indicates that the implementation of an employee experience program covers several areas:
- – Career development
- – Remuneration
- – The employee’s decision-making power and contribution
- – Working conditions
« A recent Gallup study revealed that 2/3 of employees were in “quiet quitting” mode since the pandemic », explains Luc Hanna. This statistic is very alarming !
Companies that have understood the importance of focusing on and investing in employee loyalty know that it is more profitable to opt for this strategy rather than managing a high turnover rate, a lack of employee engagement and other negative effects which generate significant financial costs and damage the employer brand.
« Companies that have understood the importance of focusing on and investing in employee loyalty know that it is more profitable to opt for this strategy rather than managing a high turnover rate. »
Emilie Pelletier affirms that the central point of employee experience is the employer positioning thus stating: « what do I want my employees to experience ? » She adds with certainty « your employees are your best allies! »
| Stefanie Rochford, CHRP, CRHA, President, Rochford Executive Search
(1) Pelletier, Émilie; Dubois, Didier; Morin Denis « Comment attirer et fidéliser des employés » 2022.