Loyalty is a rare word these days.  In a culture where employees are unhappy and post negative comments about the company on social media or leak vital and confidential information to competitors or where employers adopt a strategy of exploitation and demand more and more for less, it is hard to see how loyalty can be profitable.  So is it?

In organizations such as Zappos where employees are loyal to the customer, the brand and the company it is obvious that it makes a competitive difference.  But how does it affect the bottom line?  Below are some areas that affect the ROI of loyalty:

  1.  The cost of replacing a key employee or a top performer is greater than 1.5 times their yearly salary.
  2.  The legal costs of defending a complaint against the employer is $20,000+ per case.
  3.  The organizational knowledge that is lost during massive layoff or during high turnover amounts to 50%.

These actions are costly, so how can you create a culture of loyalty even during turbulent times?