Wednesday, October 22, 2014

I'm A Long-term Employee, But Will You Love Me Tomorrow?

Building relationships with employees so they stay with the firm for a long time was consistently listed as a key longevity success factor by 100-year-old companies. They clearly believe it is a differentiating factor. It may be important, but it does not appear to be statistically significant when compared to philosophies reported by younger companies. 

In our theoretical model of corporate longevity built from a number of case studies of old companies in both the U.S. and Japan, developing and retaining employees for the long term was one of the key factors.  This importance was confirmed in surveys of old companies in both countries through answers to items dealing with efforts to retain employees and investments in training and developing employees.  However, when testing the longevity model with young companies, they also indicated these things were important - though to a lesser extent than old companies, it was not a statistically significant difference.  The only statistically significant item was the effort old companies take to teach employees about company history and traditions (likely because younger companies don't yet have much history or many traditions).

Possible explanations for the lack of significant difference in old and young companies self-reported behavior toward employees is that young companies realize retaining well-trained employees will be of great benefit to their business. Another possibility is that younger companies report intending to operate this way, but have not yet been tested as to whether they will actually keep employees on the payroll during tough times the way the older companies have actually done.  Either way, it is clear that companies surviving for over 100 years believe long-term relationships with employees is a very important factor in their success.

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