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Companies aim to buck trend of declining employee loyalty

Rochester Business Journal
June 6, 2014

President and CEO James Hammer says open communication helps sustain loyalty at Hammer Packaging Inc.(Photo by Kimberly McKinzie)

Kindling employee loyalty means encouraging open communication throughout an organization, local employers say. Without it, valued workers eventually head for the door, leaving turnover costs in their wake.

A paycheck alone does not guarantee that talent will stick around, human resources experts add.

“Long gone are the days in terms of when employees’ loyalty was assumed and that you may work for a company for life,” says George Cook, executive professor of business administration at the University of Rochester’s Simon Business School. “Those were the days (when) we thought that … compensation, seniority and benefits were king or queen in terms of assisting and fostering employee commitment and loyalty, but that certainly isn’t the case today.”

Even employees who are steadily moving up the ladder may exit if they rarely get to hold the reins.

“When you (champion) empowerment, employees … have sort of a newborn feeling of freedom and flexibility,” Cook says.

Sustaining job satisfaction has become a pressing issue for employers now that the economy has rebounded from the recession and more workers are testing their marketability. According to a 2013 survey by Jobvite, a referral and recruitment software developer in San Mateo, Calif., 51 percent of employed workers reported they were open to new jobs or actively seeking them.

Online technology has fueled job hopping, the Jobvite survey concludes. Personal connections still bear the most fruit, but 21 percent of survey respondents learned about job openings from social networks such as Facebook, LinkedIn and Twitter. Unvarnished reviews of employers on glassdoor.com and other websites also have helped job seekers refine their searches.

Though experts contend that employee loyalty has eroded nationwide in recent years, local employers are hoping to buck the trend.

At Hammer Packaging Inc. in Henrietta, open communication helps sustain loyalty and is “absolutely mandated when working together as a team,” President and CEO James Hammer says. The company would have trouble making progress without it, he adds.

“We support company-paid training to all associates with the understanding that advancement in the organization will come from within first as we continue to grow the company,” he says.

Established in 1912, Hammer Packaging has 450 employees locally and added 13,000 square feet to its headquarters on Lucius Gordon Drive in 2012. Its areas of expertise include horticultural seed packets, foam labels for microwavable foods, and shrink-sleeve labels for household cleaners and beverages.

Recognition also plays a key role in promoting commitment, Hammer says. One way the company rewards employee excellence is through Hammer Bucks, which co-workers give to each other and can be redeemed for time off or company apparel.

Wellness programs, company-paid lunches and events also remind employees they are valued, Hammer says.

“Companies who do not recognize individuals for their efforts over and above salary and benefits have a declining loyalty rating,” he says.

Adds Hammer: “I think that company loyalty is based on the culture of the organization. The right people are the most important asset that Hammer has, and we treat everyone with that respect.”

At Fibertech Networks LLC in Brighton, employee surveys help gauge employee satisfaction.

“So we can celebrate the things that employees feel we’re doing well, and we can look to improve things,” says Jackie Sax, director of human resources at the fiber-optic broadband provider. Survey feedback prompted the company to ramp up its professional development opportunities.

Fibertech operates metro fiber-optic networks across the Northeast and recently

completed an Ohio expansion project covering more than 1,000 new route miles in Akron, Cincinnati, Cleveland, Columbus, Dayton and Toledo. Earlier this year, the company activated an outdoor metro small-cell site for a wireless carrier handling commercial traffic that is believed to be the first of its kind in the nation.

The company, which has 160 employees locally, also offers wellness initiatives to boost loyalty. Those efforts range from having an on-site nurse for 20 hours a week to programming seminars on nutrition.

“If employees are healthy and happy and you’re getting their feedback, that’s really what it comes down to, and that really builds your culture,” Sax says.

Fibertech has a peer-led recognition committee, but praising workers informally also is part of the company’s culture.

“Our executive team is always walking around and talking to employees,” she says.

Fibertech’s voluntary turnover in 2013 was 5 percent, says Sax, who conducts 10 interviews a week with job applicants, on average.

“People are loyal to a company that treats them well,” she says.

Reputation also can make a profound difference for loyalty, says Michael Gee, head of school at Allendale Columbia School in Brighton, where the average tenure is 18 years. Forty-two percent of the 89 faculty members, staffers and administrators currently working at the private, independent, co-ed day school have been there for more than a decade. Two faculty members who had retired now teach at the school part-time.

Not being restrained by the Common Core has helped keep teachers at the school, Gee says. Financial support to pursue advanced degrees or travel “to bring back the best thinking in education so that we can provide that for our students” also keeps satisfaction levels high.

Tuition remission is another way the school helps employees find balance.

“I think we try to make the school the center of the community, too, so it’s not just where you go to work but it’s where oftentimes your family comes to socialize,” Gee says.

Given that the average American worker now has numerous jobs in a lifetime, businesses and organizations should be dogged about making sure employees feel valued and respected, Cook says. Not doing so has far-reaching effects.

“I think as employee loyalty dwindles, commitment also dwindles, obviously,” he says. “And people just won’t take that long step or that extended march to get something done … and do it right because they don’t feel like that return is going to be there.”

Downsizing and mergers and acquisitions that occurred in the Rochester area and elsewhere during and since the recession likely took their toll on employee loyalty, but “I think it’s still important and still relevant,” Cook says. “It’s just that it’s a very tough thing to earn today, I think, because of all the outside things that are banging away at it.

“I’ve always said, if you have happy employees, you have happy customers, and that’s what business is all about. But, again, in terms of how you address this thing called employee loyalty, there’s no one-size-fits-all.”

Sheila Livadas is a Rochester-area freelance writer.

6/6/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.



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