Aon Study Spells Out Where Employee Loyalty Lags

Aon Consulting has released new information on employee loyalty in America that provides insight into the types of workers showing the greatest decline in loyalty to their employers. Dr. David Stum, president of Aon Consulting's Loyalty Institute, released the findings in a presentation at ``Workforce 2020,'' a conference sponsored by the Hudson Institute, the U.S. Chamber of Commerce and the Society for Human Resource Management.

Aon Consulting announced earlier this year that its national measurement of workforce commitment, the Workforce Commitment Index (WCI), declined by 2.2 points in 1998, to 97.8. Today, Aon Consulting released further analysis breaking down the decline in employee loyalty by demographics, industry groups, and company size. Among the most significant declines:

High-tech workers

Among industry groups, the largest decline occurred in the high-tech sector. According to Stum, ``It may be that the high-tech boom has leveled off, or that there is increased pressure for advanced productivity and innovation compared to other industry groups. This could be a cause for declining loyalty.''

Large companies

Large organizations, no longer the leaders in workforce commitment, suffered a significant drop in WCI score. They now fall to second place behind mid-sized organizations. According to Stum, ``Mid-sized organizations are somewhat less prone to merger-mania, reengineering and downsizing. Consequently, they may now provide more stability and security than larger organizations.''

Customer service employees

Among job classifications, the commitment of customer service employees has dropped substantially. They now occupy the bottom rung on the commitment ladder, taking over the position from operations and hourly employees. ``This is certainly bad news for organizations that are counting on front-line customer service employees to represent them,'' said Stum.

Young workers

Younger workers (Generation Xers and late Boomers) are less committed than they were in 1997, which Aon Consulting says may reflect changes in job preferences for these groups. With the economy in good shape and jobs plentiful, these workers are increasingly looking for employment alternatives. ``Gen Xers are moving from job to job, starting their own businesses, becoming contract workers, and so on,'' said Stum. ``Also, younger workers with fewer years of service are often the first to go in company consolidations and downsizings, which may also lead to lower loyalty.''

False commitment

The study also found that while the number of workers who say they intend to stay with their company for the next several years has actually gone up, other critical components of employee loyalty went down. Fewer workers say they would recommend their company as a good place to work; fewer say they would recommend their company's services and products; and fewer believe that their coworkers make personal sacrifices when required to help the company succeed.

According to Aon Consulting, this finding could be an indication that intention to stay with a company may be based, in part, on the respondent's perception that another job will not be available in the foreseeable future. ``Many workers are expressing what might be called `false commitment,''' said Stum. ``They say they will stay with the company, but they are not highly motivated employees and are likely to leave at the first opportunity.''

Increasing employee loyalty

Aon Consulting's study found 17 factors that correlate significantly to workforce commitment. The most important five factors for increasing employee loyalty, in order, were:

• Management's recognition of the importance of the need to balance personal and family time
• Direction the organization is heading
• Opportunities for personal growth
• Ability to challenge the way things are done
• Satisfaction from everyday work.

Aon Consulting developed the Workforce Commitment Index by conducting focus groups with more than 600 American workers to create a definition of workforce commitment that could be measured and tracked over time. Using those results, Aon Consulting researchers surveyed more than 1,700 workers to create a first-ever benchmark of workforce commitment in 1997. The initial baseline for the WCI was established at 100, using the model of other national measures such as the Consumer Price Index. This year Aon Consulting interviewed another 1,800 workers to produce the second annual WCI. The result is the first look at how workforce commitment is changing.

To request a copy of the Workforce Commitment Index report, call 1-800-438-6487.