High-risk employees outnumber the truly loyal, according to Walker’s latest study of employee loyalty in the U.S.

Loyalty among Indiana workers lags behind national average

Loyalty dichotomy emerges among Generation Y workers; study reveals insightful links between employee loyalty, behavior

FOR IMMEDIATE RELEASE
September 3, 2007

INDIANAPOLIS - High-risk employees in the American workplace outnumber those who are truly loyal, according to Walker Information’s most recent national study of employee loyalty.  Although the percentage of truly loyal employees – 34 percent – is unchanged from two years ago, the percentage of employees categorized as high risk now exceeds those who are loyal, creating a widening gap for employers struggling to improve retention.  The Walker Loyalty Report for Loyalty in the Workplace, examining trends in both employee loyalty and business ethics, reveals 36 percent of employees are high risk – a spike of five percentage points from 2005.  Based on Walker’s proprietary loyalty model, high-risk employees, unlike their truly loyal counterparts, are not committed to the organization and are likely to leave within two years.

“Employers are faced with a situation where the number of employees causing a negative drain on the organization outweighs those who are working to positively support it,” said Chris Woolard, senior consultant for Walker Information.  “With more than a third of employees classified as high risk, the results of our study signal concern as to how the negative attitudes often characteristic of this group will affect organizations – and their ability to compete successfully – down the road.”

Loyalty among Indiana workers lower than national average
As part of this year’s Walker Loyalty Report for Loyalty in the Workplace, Walker captured feedback from more than 500 employees in Indiana.  This state-specific research indicates loyalty among Indiana workers – registering just 29 percent – falls below the national average of 34 percent.  And although slightly higher, the percentage of high-risk employees in the Hoosier state tracks closely with the national results, 39 percent versus 36 percent, as is the number of trapped employees – 27 percent in Indiana and 23 percent nationwide. 

Loyalty affects employee behavior
This year’s study results indicate loyalty has significant impact on how employees behave and perform on the job day-to-day.  For example, 81 percent of employees deemed loyal (those in the truly loyal and accessible categories) are likely to execute the company’s strategy in their daily work, while just 38 percent of those who are not loyal (high-risk and trapped categories) say they will do the same.  Similarly, 92 percent of loyal employees indicate they work to make the company successful, compared to just 49 percent of disloyal employees.  When it comes to helping colleagues with heavy workloads, 89 percent of loyal employees say they are willing to provide assistance, while just 60 percent of their counterparts will agree to pitch in when needed.

Harder to win loyalty with new employees
According to the study, employee loyalty during the first 10 years on the job generally increases as employee tenure rises, but a large number are high risk.  Employees with a company for less than one year were the least loyal at just 26 percent, while loyalty was highest (45 percent) for those with six to nine years on the job.  After a decade on the job, however, loyalty diminishes.  Just more than a third (36 percent) of workers with between 10-19 years of tenure are categorized as truly loyal with the percentage dropping to a mere 30 percent for employees with 20 or more years under their belts.  Interestingly, the two most-tenured categories (10-19 years and 20 years or more) register the highest percentages of trapped employees with 33 percent and 36 percent, respectively.

Employers show some improvement in factors driving loyalty
The news, however, isn’t all bad for employers, who made some strides, according to the study’s findings, in the experience areas most predominantly tied to loyalty.  Fifty-eight percent of those surveyed said their employers show care and concern for them – one of the leading drivers of loyalty – compared to just 54 percent in 2005.  Within this category, 55 percent agreed their employers were working to develop employees for the long term, up from 50 percent two years ago.  In all, the top experience-based drivers of loyalty in ranking order are fairness at work, care and concern, trust in employees – emerging for the first time as a loyalty driver – feelings of accomplishment, and satisfaction day-to-day.

Loyalty among Generation Y workers shows dichotomous trend
While Walker’s study reveals workers in their 20s – commonly referred to as “Generation Y” – as most loyal with 38 percent, as a group they are more dichotomous with 78 percent classified as either truly loyal or high risk.   As the generation closest to retirement, “Baby Boomers” ranked lower in loyalty – with just 32 percent truly loyal – and followed Gen Y in the number of high-risk employees with 37 percent. 

“With the lowest number of trapped employees and the highest percentage of those deemed high risk, the implication is Generation Y workers are confident better opportunities exist,” Woolard said.  “Although there are any number of social and economic reasons for the loyalty dichotomy we see in this generation’s results, one possible explanation is their view that the imminent exit of the Baby Boomers will spell better positions for them, ultimately making employee loyalty less relevant.”

Employees want to have a role in company strategy
A series of questions in the 2007 employee loyalty survey points to employees’ overall willingness to be involved in company strategy.  Having employees involved in strategy development is a key factor in employees embracing it, but only 44 percent indicated they were involved in the strategy.  More than 60 percent (62 percent) agreed they are important to the company’s strategy which reinforces the need for employee’s opinions to be heard regarding the strategy.  Senior leaders play a key role in the success of the strategy but only 50 percent of the employees felt senior leaders communicated the strategy well and make good decisions.  Only four out of ten of the employees felt the senior leaders inspired them. 

Employees’ view of company ethics levels off
While Walker’s past studies of business ethics have noted an upward trend in employee perception of company ethics, this year’s results remain virtually unchanged from 2005.  Sixty-three percent of employees agree their company is highly ethical, and 57 percent believe their senior leaders are ethical.  The study also shows a clear link between employees’ perceptions of company ethics and employee loyalty.  Ninety-one percent of truly loyal employees believe their organization is highly ethical, compared to just 35 percent of employees in the high-risk category.  Similarly, 89 percent of loyal employees feel their senior leaders have personal integrity, while just 31 percent of high-risk employees feel the same.

About The Walker Loyalty Report in the Workplace
Data for The Walker Loyalty Report for Loyalty in the Workplace was received in July, 2007 from 2,950 people, 18 years and older, working in companies with at least 50 employees.  Completing an on-line survey, the respondents were full- and part-time employees representing business, non-profit, and government organizations.  The loyalty report results were weighted according to the June 2007 release from the U.S. Bureau of Labor Statistics. 

About Walker Information
Walker Information specializes in employee and customer loyalty and related strategies, including innovative approaches to segmenting, retaining, and serving employees and customers..  A privately owned, Indianapolis-based company with offices in the United States and Canada, Walker Information’s diverse team of consultants provide tailored, comprehensive solutions to help companies achieve their business objectives.  For more information about Walker Information, visit www.walkerinfo.com.