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Employee loyalty: an effective solution for labour shortage

Written by : ADP Canada
2006-06-06
Finding qualified employees in the retail trade industry is currently a daunting challenge for many employers. And this challenge is becoming increasingly difficult to handle. In addition to establishing good recruiting methods, it will also be necessary to build on effective employee loyalty procedures if you hope to keep your best resources.

Over the last few years, many companies have expressed their fears of a possible skilled labour shortage in Quebec, largely caused by demographic development. The effects of this problem are now truly being felt.
This shortage will affect many industries such as aerospace, health and forestry. The retail trade industry will not go unscathed and employers will have to quickly adapt to this new reality.

According to the data in the latest report from the Comité sectoriel de main-d’œuvre du commerce de détail (CSMOCD) (retail trade labour sector committee), 91% of retailers must replace a certain percentage of their sales staff every year as a result of resignations; 100% of retailers must do so for their product management staff. For executive employees, this percentage is close to 60%.

Although they have long been accustomed to managing high turnover rates for specific job classes, in particular because of the hiring of student labour, many employers believe that, in spite of everything, turnover is a problem. And, over the next few years, they will be faced with a situation that is even more difficult.

Already, some companies have implemented innovative solutions to make up for the lack of labour, for example by adapting their work schedule or accepting older employees who are looking to start a second career. New training programs have also been developed and ventures organized to attract candidates interested in the retail trade industry.

These measures will most likely increase the skilled labour pool and assist recruitment. But then you have to keep the good employees! In an industry where the differentiation is more and more conditional upon the quality of client service offered by the employees, implementing suitable employee loyalty measures will have a significant impact on your company’s performance.

How to establish employee loyalty?

Employee loyalty consists of creating a work environment that will retain the employees’ commitment on a long-term basis. But, be careful: establishing employee loyalty does not mean retaining employees come what may! Employee loyalty efforts must be directed towards employees who show a genuine interest in the company.

In fact, to be effective, an employee loyalty program must be primarily based on values common to both the company and the employees: pleasure, personal investment and skills development are a few examples.

An employee loyalty program may consist of several elements. The primary employee loyalty element used by employers is obviously compensation. According to the CSMOCD data, 32% of employees in the retail trade industry state that their salary is the least satisfying element of their working conditions. This implies that compensation remains a very effective element in employee loyalty.

However, employee loyalty is not simply a question of financial and material benefits. Indeed, wage and salary policies have the disadvantage of not setting employers apart. In anticipation of a labour shortage, compensation will continue to play a major role in employee loyalty but should be supported by other elements.

To set yourself apart, you should focus your energy on the true objective: creating a work environment that is interesting, stimulating and attractive for your employees.

Job satisfaction and employee commitment are some of the other elements that are essential to an employee loyalty program. And there’s still a lot of work to be done in this area, as 15% of retail trade employees consider the atmosphere, stress and few employee benefits as the least satisfying elements of their working conditions.

One of the ways to improve your employees’ job satisfaction and promote their commitment is to develop a strong sense of belonging. As the employee loyalty approach must be based on values that are common to both the company and the employees, clearly communicating these values, as well as the company’s objectives and those expected from the employee, is critical in developing a strong sense of belonging.

Other means may be considered to create a strong sense of belonging, such as enabling employees to climb the company’s corporate ladder, offering professional development sessions or even providing an on-site daycare service. Which means you use will depend on your company’s values and objectives.

A systematic and regular performance review is also an excellent way to increase the job satisfaction of good employees, as it gives you the opportunity to acknowledge their efforts and listen to what they have to say. Exclusive acknowledgement programs or days may also have the same effect. When possible, consulting with your employees and involving them in decision making will often result in a significant increase in their sense of belonging.

One last element to be considered in an employee loyalty perspective is the development of a sense of loyalty. With a high level of commitment, a mutual sense of loyalty between the company and its employees will make it possible to strengthen the approach. For an employer, loyalty translates into transparency in regards to global strategies, organizational changes or even special events. As for the faithful employee, s/he will be honest to the company and may even defend it against his/her colleagues or in a public forum.

BouClair: a tightly woven employee loyalty program!

Some companies have already grasped that implementing measures to establish employee loyalty is essential. BouClair, an ADP client since 1987, is one of these companies. At BouClair, the institution of HR management practices has already had a positive impact on employee loyalty and mobilization.

To ensure that positive results are attained, several elements of the employee loyalty program have been adapted to the specific needs created by the distinctive context of the labour market and by the values characteristic of the company.

“Traditionally, retail trade employment has never been valued and few people intend to make a career out of it, which we have to take into consideration in our approach,” stated Richard Blain, vice-president of human resources at BouClair. “When recruiting new employees, it was essential to target a certain profile that would meet our needs. At BouClair, one of the most important selection criteria is the willingness to provide top-quality client service.”

During the first few months of employment, BouClair provides a structured integration approach whose purpose is to align the values of new employees with those of the company at an early stage. This is a crucial period for employee loyalty, as the company has noticed that most resignations occur during the first year of employment.

“Coached” by a training and performance review program, employees have the opportunity to assimilate the values and understand the company’s expectations. BouClair also encourages its managers, who often play the role of “coach,” to establish open lines of communication with employees. On this level, managers play an important role in employee integration and loyalty.

Lastly, BouClair banks on promotion, apprenticeship and development opportunities within the company to foster the loyalty of its best employees on a long-term basis.

“This spring, BouClair will be opening five new stores devoted to home décor, and it’s only the beginning of a major expansion,” added Blain. “Our recruitment process always gives priority to internal employees, but it is obvious that major growth requires the contribution of many external resources. That’s why we are very aware of the quality of recruited human resources and their long-term loyalty.”

Employee Loyalty: the focus of Birks and Mayors’ strategies

An ADP client, Birks and Mayors, is another company that relies on employee loyalty as a business development tool. In fact, employee loyalty is the focus of all of its business strategies.

“Our objective is, and always has been, to become an internationally-recognized luxury trademark,” explained Hélène Messier, senior vice-president of Human Resources at Birks and Mayors. “To do so, we have to recruit talented individuals who share our vision and thoroughly support our culture.”

Aware of the prime importance of skilled labour in order to ensure the company’s growth, Birks and Mayors have deployed considerable efforts to establish employee loyalty.

“We’ve developed training programs that enable employees to become the best in their field,” clarified Messier. “Incidentally, our new employees, who’ve never experienced anything like this in the past, regularly speak highly of our company.”

The company’s training programs, offered by Birks and Mayors University, enable new employees to acquire in-depth knowledge and receive a certificate that confirms their skills.

According to Messier, the impact of these training programs has been evaluated and the results are very good, on both a turnover rate and an increased sales level. “This approach is beneficial to everyone from the employees and the company to the shareholders and, of course, the clients, who enjoy an incredible trademark experience in a warm and welcoming environment.”

Creating a winning combination

There is no magic formula for implementing an effective employee loyalty program. One thing is for sure, consistent employee loyalty procedures, along with your employees’ commitment factors, should be privileged. To that end, consulting with your key employees before undertaking any specific measures may prove to be very useful in understanding why they do or do not feel a sense of belonging in the company.

By taking a moment to reflect on your own values and objectives, you will then be able to undertake employee loyalty measures that are tailored to your internal culture.

For example, at ADP Canada, a combination of various elements has contributed to the loyalty of our associates. Our “winning combination” includes a performance-based compensation policy, regular reviews, acknowledgement programs and the maintenance of a loyalty culture.

Over and above compensation, we acknowledge the value of conscientious employees, who demonstrate considerable flexibility and respect for confidentiality. These are the characteristics that fit perfectly in our company’s culture and also meet our clients’ expectations. The associates that we recruit, and who develop the strongest sense of belonging, share our basic values. They enable us to provide excellent client service and reach our objectives.

A profitable undertaking

An effective employee loyalty program has many positive effects for both the employees and the company: decreased turnover rate, less absenteeism, improved employee productivity and an acceptance of corporate changes and decisions, just to name a few. Furthermore, employee loyalty is often synonymous with client loyalty. In short, it’s a profitable undertaking.

Creating a work environment that encourages employee commitment may prove to be rather easy. However, it must be rigorously organized. The key is to accurately identify the specific elements that are meaningful to your employees and use them in the best matter. Do not bother trying to establish employee loyalty after several successive resignations; it’s already too late!
In the retail trade industry, the skilled labour shortage will be the cause of many headaches for HR department heads and corporate executives. But those who remedy the problem now using structured employee loyalty measures will have a head start that could make all the difference in the race to find good employees.

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