Article: Loyalty is not always the best policy

Employee Engagement

Loyalty is not always the best policy

The corporate world is waking up to a trend where the longer the employee works with the same company, the slower his chances of his growth

An employee was stick to his company for five years, hoping his loyalty would earn him wealthy rewards in terms of salary and leadership, but it didnt take long for his carefully cultivated dream to crash.

His company replaced him with someone who was earlier in the same company, and at the same level. He had returned to home turf after working with two other companies in the meantime, securing hefty salary rises at each change.

In those five years, the old or loyal employee had moved up by just one level, and his pay is barely one-and-a-half times his starting salary and not only is his replacement three levels higher, but he also earns four times his starting salary.

The corporate world is waking up to a trend where the longer the employee works with the same company, the slower his chances of his growth. This can be seen at the junior and mid-senior levels where 70% of the workforce lies, and when an individual leaves for another organization, he can negotiate a typically 25-40% higher salary, but within an organization, the increments are much lower.

In FMCG, telecom, insurance and software industries, there is a great pressure on getting customers and roping in retailers before the competitor does. In such cases, it does not matter whether you have jumped jobs frequently or not. What matters is how fast you can deliver, whether you have jumped five companies in five years.

But sticking around is not too bad. Some companies are going a long way to ensure their employees dont stray. LG, which is known for employees staying on for decades, has initiated a five-year capability development plan for its employees, based on the expectations of both the company and employees from each other.
 

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Topics: Employee Engagement, Employee Relations

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