As a marketing executive and a strategy, management, and operations consultant for two decades, I’ve heard and read a lot about employee loyalty. The blame seems to always fall on the (perceived) fickle and selfish nature of millennials and Gen Z, thought to be self-centered and loyal only to themselves.
And that’s how it would appear — if you hadn’t been in the corporate world for decades prior and saw firsthand how the initial social contract that created loyalty was broken by the employers, not employees.
I got an early impression of what company loyalty was supposed to be
After college graduation at age 22, I got my first job at an advertising agency. At the orientation, sitting with mostly entry- or low-level employees, an HR rep went over a lot of confusing information — stuff about common stock, benefits, and a pension plan.
I thought to myself, “Well, I’m going to work here forever and I’ll just figure it out later and retire at 65, maybe before that!”
After all, this was what I’d been told by my grandfather right before I left for college. He’d retired after working at the same bank branch for 45 years, working his way from sweeping the floors to branch president.
I’ll always remember his words that day at the kitchen table: “In my day, when you got a job, you did that job, whether it’s what you wanted or not, until you retired. And you didn’t worry about jumping around for money; if you took care of the company, they’d take care of you and your family.”
He told me that his pension and healthcare were what kept him comfortable and allowed him to pay considerable medical bills for my grandmother.
Then I watched my company’s loyalty perks dry up
About three years into my tenure at that job, a memo informed us that the company was discontinuing its pension program; we could either be paid out or migrate the balance into a 401(k), the new retirement provision for employees.
My colleagues were outraged. There was suddenly talk of “bailing out” by people older than me, but I didn’t really get it at the time.
A year later, they announced an IPO and that all common stock would be liquidated and paid out at about $5 per share. The IPO price was $25.
“This used to be a great place to work,” was all I kept hearing, though I don’t ever recall anything significant that made that company such a great place to spend your career — except for the generous pension and common stock benefit, that is. These were the things that the company used to do to reward loyalty and make you want to stay, and they were gone.
I eventually left, as did many mid- and upper-level employees. I’d realized that since my former company wasn’t going to take care of me, I had to do for myself what I could to work towards security and retirement in my future.
The older I get, the more I understand what’s been broken
A few years later, I was working at a renowned global advertising agency and found myself in an all-hands client crisis meeting for a Fortune 500 company that was discontinuing its pension program.
My manager explained the magnitude of the situation: People had essentially sought employment at this tech company, perceived as a dinosaur among the dot.coms, specifically for the long-term security it offered.
Worse, many employees who had been there for many years were not “grandfathered” into keeping their pensions, forced to migrate to a 401(k). A unique benefit used as a powerful recruitment and retention tool had been erased.
It took me a while to see the gravity of that moment. Now, as I start to think toward retirement at age 52, I really get it. I have an uncle who’d worked for this same tech company who retired with his pension at a decent age and now spends his summers on his boat teaching sailing near Nantucket and his winters working ski patrol in Vermont.
He gave them 40+ years of his life, and in return they took great care of him. It seems like those days are gone now — or only reserved for the fabulously wealthy.
As I’ve gotten older, I’m sometimes jealous of friends who took jobs in public education or government. They haven’t lived lavishly over the years, but with 30 years’ experience can retire at full salary in perpetuity and sleep comfortably without the plague of questions like Will my 401(k) be enough to retire at 60? 70? Will the government move retirement from 65 to 70 and I’ll have to work for nearly 20 more years?
I also wonder how much I may have missed along the way because I’ve had to be so focused on my future, instead of the present.
The broken loyalty contract between employers and workers can be repaired
Is loyalty a dated and dead concept? My answer, despite what I’ve seen, is an emphatic “No.” In fact, the shift in values from Gen-X to millennials and Gen-Z creates a great opportunity to ignite loyalty.
It’ll require companies to understand that there’s a massive misalignment between what companies think will create loyalty versus what makes employees feel like they work for a great company and want to stay.
Though some startups and next-gen businesses are exceptions, most companies still focus on very linear, financially-based hooks for loyalty: salary, 401(k) match, stock options; maybe work-from-home flexibility.
But as a marketer who has conducted years of research and cultural reconnaissance on Gen Z, millennials, Gen X, and baby boomers, I know that what seems to most drive young people today is the freedom to pursue their passions. They care less about money and are financially driven as a means to an end, pursuing things like side hustles, immersive travel to unusual places, music festivals, costly fitness classes, and mental health investments like therapy and life coaches.
That’s why I’ve strongly encouraged the companies I work with to create sabbatical programs, such as five years of service matched with three months of paid leave to travel or pursue personal interests (with parameters that keep them from quitting on their first day back); to establish corporate partnerships that help employees pursue physical and mental wellness; and to create programs where employees are permitted and encouraged to dedicate a percentage of their paid time pursuing passions or work for non-profits.
A company that matches this demand with benefits, rather than just higher salary, can win loyalty.
Steven Piluso is a marketing operations and strategy consultant and a proud husband and father to two young children.
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