Your loyalty grade represents how loyal you've been during your coaching career at the various schools you've coached. Coaches are graded from A+ (best) to F (worst). For each season you remain at the same school, your loyalty will improve.
Every time you make a career change, your loyalty takes a hit. The hit is based on the prestige of the school you are moving to relative to the prestige of your current school, as well as your prior length of stay at that school.
While your loyalty won't hurt your recruiting efforts, it may certainly keep you from making another job change as Athletic Directors are going to want a coach who will stay and build their program instead of using it as a stepping-stone. Please note that applying for other jobs does not impact your loyalty rating.
NOTE: All new coaches begin with a loyalty rating of B-.