Loyalty management refers to employee loyalty through certain measures. The term comes from English and means something like maintenance or conservation. It’s about retaining employees in a company in times of skilled labor shortages and high fluctuations.
The main goal is to prevent high-potential employees from turning to competitors due to dissatisfaction. That’s why the most important factor in managing loyalty is employee satisfaction. Dissatisfied employees play with the idea of quitting long before finally taking the step, and in this way their dissatisfaction can have a demoralizing effect on other colleagues too.
Loyalty management is closely linked to employer branding. While employer branding primarily aims to attract new talent to the company, retention management aims to keep employees in the company.
What measures can small and medium-sized businesses take advantage of?
When it comes to employee retention, a distinction is made between emotional, calculative and qualification-oriented retention. As previously explained, the goal is to increase employee satisfaction. But every employee functions differently, so it’s not enough to focus on just one of these measures.
Emotional measures
Emotional connection is about increasing the employee’s emotional satisfaction. There are several ways to deal with this problem. One would be awards and prizes given to long-serving employees. This way you will show appreciation for the long-standing collaboration and give your employees a sense of recognition. However, this measure only has a very short-term effect.
In the long term, you can build loyalty among your employees by giving them a feeling of trust. This can be done, for example, through open freedom of action and increased accountability. Opportunities to help shape and make decisions also promote employee satisfaction on an emotional level. But the most important factor is company culture. This includes the company, the work and the team atmosphere.
Calculation measures
Young people in particular are looking for the opportunity to combine private life and work in the company without one having a negative impact on the other. This is why incentives such as a sabbatical, but also general offers in the area of work-life balance are effective for this group of employees.
In general, the calculation measures include above-average job opportunities. This includes holidays, fair wages, special guarantees in terms of job security and other fringe benefits that make the job more attractive for the employee.
Qualification-oriented measures
The qualification-oriented measures are aimed primarily at particularly determined and career-oriented employees. It’s about creating opportunities to further develop your skills and qualifications. The best-known measures in this context are young talent and support programmes. But it also includes career advice, continuing education opportunities and exclusive career offers to take advantage of your development opportunities and prospects within of the company to increase employee loyalty.
These measures cannot be implemented only by large companies. Small and medium-sized businesses can also use them to bring about positive changes in their corporate culture, especially in labor markets with a severe shortage of skilled workers and in management and key positions, as these can have a direct impact on employee turnover.
What challenges can arise when implementing loyalty management?
For employee retention to be successful, you should also address the possible challenges. We will show you the classic obstacles and how to overcome them:
1. Individual needs and expectations
Employees have different needs and expectations, you shouldn’t forget that. It can therefore be difficult to develop an employee retention system tailored to different personalities, life stages and career stages.
We therefore recommend that you take an overview of the various measures listed above and think carefully about which of these measures can really be suitable for your company and your employees. An important step is to connect with employees and listen to their point of view.
2. Flexibility and adaptability
The needs of companies and employees change over time. Effective loyalty management requires flexibility and the ability to adapt to changing circumstances. So it is not possible to simply introduce agile working cultures and stick to them for the next few years. Agile working also means that as an employer you always have your company in mind and are ready to change processes if they have a negative impact on employee satisfaction.
Here too, close contact with your team is important. Keep an eye on your company and talk to your employees to find out what could further boost their motivation.
3. Evaluation of the measurement
One factor we always struggle with in this area is measurability. You may not notice the changes at first, let alone be able to measure them. You may have to wait a year or two after introducing retention measures to notice that you have had to hire significantly fewer new employees. So give the process time.
Strategies for managing loyalty: relying on digitalisation
One measure that we have not yet covered is that of not making the daily work of employees more difficult. Piles of paperwork and complex bureaucratic processes tend to have a negative impact on employee satisfaction and therefore employee loyalty. You can easily get rid of these problems with digital solutions.
You can use the clocking in app to make processes such as time recording, vacation planning or sick leave interesting and easy for your employees. With one click they clock in in the morning and can use the “my area” of the app to send vacation requests and call in sick for the day without much effort. Mobile time recording allows you to work independently from any location.
Use clockin not only as a first step towards digitalization, but as a tool to communicate with your employees. Make topics such as attendance recording transparent and make your company more modern and attractive while keeping up with the times.