Every workplace has one, the long-serving employee who’s ‘been there since the beginning.’ They know the history, the clients, the systems (and all their quirks). They’ve helped build the business from the ground up and have a level of loyalty that feels irreplaceable.

But what happens when that loyalty starts costing more than it contributes?

Lately, we’ve worked with several businesses facing this exact challenge where a once valued team member has become disengaged, resistant to change, and difficult for others to work with. They question every decision, clash with their manager, and seem to hold the business emotionally hostage with their years of service.

It’s an incredibly uncomfortable position for business owners. On one hand, there’s deep gratitude for the employee’s history and contribution. On the other, there’s a growing recognition that things are no longer working and that continuing to look the other way is taking a toll on morale, productivity, and ultimately, profitability.

The ‘loyalty lens’ trap

Many owners fall into what I call the loyalty lens viewing behaviour through a history of contribution rather than its current impact. It sounds like:

“They’ve been with me since the early days.”
“They helped us through tough times.”
“They just care deeply, that’s why they’re like this.”

The problem is, when loyalty becomes a reason to excuse poor behaviour, the rest of the team sees it. And what they see is inconsistency. They see that tenure equals immunity and that’s a fast track to disengagement across the board.

The cost of avoidance

When long-term employees become difficult to manage, leaders often tiptoe around them, trying to keep the peace. But that avoidance has a real business cost. It can look like:

  • Managers spending hours managing tension instead of driving performance.
  • Talented newer staff leaving because they’re tired of the drama.
  • Productivity slipping because people are distracted or demotivated.

One client recently realised their ‘loyal’ employee, who had openly refused to follow new systems, had quietly stalled an entire project. The business had lost both time and team trust, all in the name of loyalty.

How to tackle it constructively

If this scenario sounds familiar, it doesn’t mean you have to jump straight to termination. It means you have to start managing again. Here’s how.

1. Acknowledge the history, but address the present
Start by recognising their past contribution, then clearly outline how expectations have shifted. “I value what you’ve brought to the business, but I need to be honest about what’s happening now.”

2. Document the impact
Be clear on what behaviours or actions are causing concern. Use examples. It’s not about personality, it’s about conduct and outcomes.

3. Give a structured opportunity to improve
Set clear goals, timeframes, and support. If they’re open to feedback, this can be a turning point.

4. Recognise when change isn’t coming
If they can’t (or won’t) adapt, you may need to make a difficult decision. The wellbeing of your team and the health of your business can’t hinge on one person’s unwillingness to evolve.

Loyalty still matters … but not at any cost

Loyalty is valuable, but it doesn’t excuse disengagement, disrespect, or disruption. True loyalty is reciprocal; it benefits both the person and the organisation. When that balance is lost, the most respectful thing you can do, for the employee and everyone else, is to address it honestly. The hardest decisions in leadership are often the most necessary ones. And managing long-term employees with compassion and clarity is one of those defining moments.

If you’re navigating a long-term employee issue or unsure how to balance loyalty with accountability, HR Cornerstone can help you design a practical and fair approach that protects your team and your business. Want more details? Get in touch with our team today.

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