Employee Retention Vs. Company Loyalty: Three Ways to Know Why They Differ

By Moon Harper

Jun 17, 2024 08:37 AM EDT

Employee Engagament — (Photo : Pexels: Photo by fauxels)

While employees are showing a growing tendency to stay longer in their current roles due to the stability offered by employers, business leaders may mistakenly interpret nesting as loyalty and perceive it as effective retention when, in reality, it could indicate something different.

According to Forbes, statistics indicate that up to 51% of workers report actively monitoring or seeking new job opportunities, 79% feel compelled to perform out of fear of appearing unproductive, and many are actively looking for new employment.

Kristen McGill, chief people officer at ZayZoon, emphasized the importance for employers to stay vigilant about retention rates and monitor emerging trends without becoming overly preoccupied with them.

Here are the three specific actions McGill recommended that leaders can implement:

1. Employers Have to Build The Right Culture

McGill suggests that employers should concentrate on cultivating the right culture and internal programs to leverage the lower turnover associated with nesting. When nesting reduces the need for recruitment efforts, employers can redirect their focus to other areas, such as strengthening their core benefits and perks, while expanding development opportunities to build trust with employees who value stability in their current roles.

McGill asserts that financial wellness tools, such as childcare support or enhanced work flexibility, signal a commitment to meeting employees' needs and providing greater job security amidst market fluctuations. This investment not only aids in retaining employees but also enhances engagement, fostering a positive culture and increasing productivity among employees staying longer or nesting in their roles.

Leaders are ultimately responsible for empowering team members to voice their opinions and showing a willingness to acknowledge feedback and take decisive actions based on it, even for employees not actively seeking career advancement.

2. Employers Have to Look for The Signs

Signs of employee nesting in the workplace can vary, but significant shifts in behavior should be seen as a signal that something may be wrong. Stronger connections enable managers to recognize signs of employees nesting more effectively and respond in ways that meet their individual needs, where employees may consistently perform satisfactorily, meeting the expectations set for their roles without exceeding or falling short.

Rather than focusing solely on spotting the nesting trend, McGill advises employers to cultivate a culture that prevents it from arising. She argues that fostering a high-performance culture and clear expectations compel every team member to consistently contribute and earn their place within the team, regardless of role or level.

3. Employers Have to Differentiate Nesting and Loyalty

According to McGill, nesting employees are satisfied with their current situation, including their pay, job responsibilities, and the stability provided by their organization. These employees tend to shy away from conversations about advancing their careers or discussing their next steps, leading to a sense of detachment and a barrier between them and their employers.

Loyal employees tend to do the contrary. Tools such as engagement surveys enable employers to distinguish engaged employees who derive purpose from their work, comprehend their significance within their team or company and are unlikely to settle into complacency. A leader's role is to connect these dots for the employee.

Mistaking nesting for loyalty can jeopardize the retention of the 51% of workers actively considering new roles. Instead, this is the time to focus on creating a better culture and implementing programs that prevent employees from getting too comfortable.