On Saturday mornings I usually play tennis with my friend, Paul.  Prior to our match recently we got into a discussion regarding corporate relocations.  Paul mentioned that a colleague of his was being relocated within their organization.  We talked briefly about the challenges that people face when they are compelled to relocate to another community at the behest of their company or organization.   

We both expressed the view that this practice of relocating with an employer was dying out as many companies today struggle with the challenges of hiring and training new employees.  As we were about to start our game Paul made the comment that staying with an employer for a long period of time just to get a retirement gift like a gold watch was outdated.  Then he made the timeless observation: “Thanks, but I’ll buy my own watch”.

Corporate Loyalty:  Alive, Dormant or Dead?

When I was growing up corporate relocations were the norm.  Employees were expected to move multiple occasions during the course of their career in order to gain broader experience.  Often, the amount of notice provided was not much more than a few days.  Spouses and family were expected to comply.  The brave few who dared question or challenge this demand either found themselves terminated or their careers suddenly dead-ended.

Twice during my professional career I was responsible for managing the corporate relocation program for my employer.  In the case of one company I coordinated and managed the relocations of over thirty staff in less than a year and a half.  Sometimes these moves were within the province, whereas other times they were across the country.  Every relocation was unique, and the number of things to factor in when relocating families was almost limitless.

Relocations aren’t the norm anymore.  That in itself is indicative of a significant shift in the labour market, particularly as it relates to employer loyalty.  Something has happened in the last ten to fifteen years to alter this practice, and it isn’t all about costs or family circumstances.  That sense of corporate loyalty that once compelled people to accept a move without question has changed.  No longer can companies automatically expect employees to relocate at their behest.  In fact, many employers are struggling just to get employees back into their offices once a week.  HR professionals bemoan the fact that younger employees don’t stay with them for long periods anymore.

All of this begs the question:  whatever happened to corporate loyalty?

The gold watch is symbolic of the reward that awaits loyal, long-service employees at the end of their career. However, is it still relevant in today's workplace? (Picture courtesy of Antony Trivet and Pixels)

The gold watch is symbolic of the reward that awaits loyal, long-service employees at the end of their career. However, is it still relevant in today’s workplace? (Picture courtesy of Antony Trivet and Pixels)

Numerous reasons. Pick one.

The factors that have led to the demise of corporate loyalty are several in number.  Here, I submit, are a few of them:

1) Frequent Recourses to Downsizing.  Over the course of my working career I’ve lived through four periods of substantive economic downturn.  The first was the 1981 – 1983 Recession which, in Canada, was exacerbated by the federal government’s National Energy Program.  The second was the aftermath of the Free Trade agreement in 1990 to 1993.  The third was the meltdown in the late 1990’s.  The fourth was the worldwide recession in 2008-09.  Each one resulted in layoffs, terminations and downsizing.

A young person growing up during any of these periods, and who may have experienced a parent or family members in their household losing their job, couldn’t help but be affected by this experience.  The experience of watching family members who gave their time and effort to support an employer, only to be downsized later, doesn’t do a lot to inspire commitment to an organization.

2) The Expiration of Pension Plans.  For years, the prospect of hanging on till 65 in order to receive a generous pension plan at retirement was enough to command loyalty.  However, as pension plans became more costly, and the rules around administration more complex, many companies opted to divest themselves of this part of their benefit plan.  Defined benefit pension plans today are rare unless you happen to work in the public sector.  If you’re lucky, you have an employer who may match your RRSP contribution annually.

3) A Millennial Workforce.  Never in history have we had four markedly different generations working at one time.  Each has very different attitudes towards work and career.  The notions of unfettered loyalty which was instilled by the Great Generation of the Second World War, and then passed down to Baby Boomers, was eroded under Generations X and Y, and is now considered an anachronism by Millennials.  Talk to a young person today and their focus is upon making a difference, learning new skills, acquiring feedback on their performance, and growing both personally and professionally.  Most have no interest in working for the same company for twenty or thirty years.  Work life balance is all important.

4) Lack of Internal Promotional Opportunities.  Companies like to extol the advantages of their job posting systems.  Many enjoy telling prospective hires about their commitment to “promoting from within”.  Unfortunately, more often than not, that is a myth and not a reality.

With the advent of Applicant Tracking Systems and online recruitment companies now post jobs externally at the same time they post internally.  An internal applicant may have the advantage of knowing their employer and its culture, but employers are focused on hiring the person they consider the best applicant.  

I am continually astounded by the number of clients who tell me stories about their experiences applying within their companies.  So many managers and supervisors have no idea of the qualifications, interests and ambitions of the people they supervise.  In an environment where there is no commitment from promoting from within it’s no wonder so many opt to apply outside to advance their careers.

A Final Thought…

My parents immigrated to Canada in 1951 from England.  They landed in New York City with $5 borrowed from a Polish couple they met on the Queen Mary steamship liner, and who were emigrating to Providence, Rhode Island.  They arrived on a Saturday, and started work on a Monday.

Living in a small-town during the 1950’s meant employment opportunities were limited.  My father had multiple jobs over the course of seventeen years, and there were several periods of prolonged unemployment. Fortunately for our family my mother worked and became the principal breadwinner.  Not surprisingly it caused a lot of strain in their marriage.  It wasn’t until my father landed a job at a refinery in 1968 that our family finances significantly improved with the greater stability that comes from regular employment.

My father loved his job.  He worked shifts, and he worked lots of overtime.  He would frequently be called in on his days off, and went without hesitation or question.  In the twenty-one years he worked there prior to his retirement I never once heard him complain.  Had he not been compelled to retire in 1989 I daresay he would have carried on longer.  When he retired his employer, as a token of their appreciation, gave him a beautiful engraved watch.  I still have it, and wear it when I go to church.

That type of loyalty was predicated on reciprocity.  Employees gave their loyalty to an employer who, in return, ensured steady employment and showed concern for their people.  Sadly, it has all but disappeared today.  Whether it is a good thing, or a bad thing, depends a lot on your perspective.  What I do know is that the bond that was once forged between dedicated employees and their employers looks increasingly frayed if not torn asunder, and I’m not sure it will ever return. More disturbingly, I’m not sure its demise is serving anyone’s interests particularly well.