Staff loyalty: a thing of the past?

Woman leaving office - 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."

Whilst being small can make you more vulnerable to losses, there are steps you can take to minimise the impact. Try to ensure that no member of staff is indispensable by spreading responsibilities across the team. Train staff so that everyone has someone next to them who knows everything about their job. Keeping staff happy can also make staff more loyal - to the business and to their colleagues - making it less likely that staff will want to move on.

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. Communication is crucial. Talking to staff about their development, giving them the opportunity to raise concerns and contribute to the development of the business can help resolve niggles before they become a problem and provides a greater sense of personal investment in the success of the business.

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."

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.