The Truth About Millennial Turnover

The Truth About Millennial Turnover

You’ve probably seen at least one article or social post about the Simon Sinek interview “Millennials in the Workplace.” The interview recorded in December 2016 quickly became viral across the web to explain why Millennials are a challenge for employers. Managers, HR professionals and business leaders are scrambling to find answers to their questions about the generation that has taken over as the largest percentage of the workforce.

There’s been much ado about Millennials. They’ve been called lazy, narcissistic, and entitled. Yet, data shows they value connectedness, diversity and openness to change (PEW Research). To address the needs and desires of this new generation of workers, companies are adjusting benefits, work schedules, and recruiting programs.

A recent article by Gallup labeled Millennials as “The Job Hopping Generation,” citing data from their research that 60 percent of Millennials are open to a new job and that 21 percent of Millennials have changed jobs within the past year. Gallup estimates that Millennial turnover costs the U.S. economy $30.5 billion annually. Yikes.

So it should come as no surprise that a quick Google search for “how to handle Millennial turnover” provides hundreds of articles addressing how to manage and retain Millennials (or whether you should bother trying). Gallup found that Millennials are less engaged at work compared to their non-Millennial peers. Sinek attributed their unhappiness at work to four main factors: “1) Parenting, 2) Technology, 3) Impatience, and 4) Environment.” As employers continue to analyze, survey and assess Millennial’s employment wants and workplace needs, it begs the questions—are Millennials really so different than other generations?

Data over the past thirty years, from the Bureau of Labor Statistics, tells a different story than we’ve been reading in the news. Perhaps, this newest generation of workers is more similar to other generations of new workers…at least when it comes to job hopping.

From 1983 to 2016, U.S. workers from ages 25-34 years consistently show the shortest tenure with a high of 3.2 years in 2012 and a low of 2.6 in 2000. It’s worth noting that the low in job tenure is relatively consistent across all age groups with a low in the early 2000's. In fact, of all age groups, it is the youngest generation of the workforce that has kept most consistent in median tenure, hovering around a median of three years. The median tenure of the workforce’s most senior workers declined from 1983 to 2006 and has slowly increased through 2016, though not regaining the tenure of the 80’s and 90’s.

The data doesn’t tell us why people leave, but it certainly shows us that younger people do leave at a faster rate than their older colleagues. Why then do our youngest workers leave at a strikingly higher rate?

Experience & Learning

Millennials are on track to become the most educated working demographic in U.S. history (PEW Social Trends). For recent college graduates used to changing courses every semester, a year or more of the same job can feel monotonous.

Beyond the desire for change, the benefits of “job hopping” can offer a diversity of experience. In some industries, such as technology, diversity of platforms, programming languages, and technology can be an asset. Similarly, the ability to become a generalist with broad knowledge can be seen as a critical way to avoid future career limitations or becoming pigeon-holed into a speciality.

The fact that many employees desire an opportunity to learn and grow is not news. Large corporations married this realization with the need for workforce planning in the 1950’s, building some of the early rotational development programs that are still popular today and have trickled down for use in mid-market businesses. These formal programs offer employees short (often 6-18 month) rotations in a particular role or area before moving to a new rotation. This provides the employee with an opportunity to experience a diversity of roles and broad learning opportunities while improving retention and building a stronger talent pipeline for companies.

Growth & Opportunity

The disappointing reality is that not everyone gets promoted. In fact from the mid-1980’s to the mid-2000’s the number of direct reports to a CEO doubled from an average of five to ten (HBR). According to the 2015 National Occupational Employment and Wage Estimates in the United States (Bureau of Labor Statistics) there were 6,936,990 managers and 137,896,660 total employees. That means there was a ratio of nearly 19 employees to every manager on a national scale. So if roughly 1 in 19 employees has a chance to be promoted when that next management position becomes available, what happens to the other 18 workers?

When employees feel their opportunity for professional and monetary advancement is limited, they are likely to seek alternative paths both inside and outside their employer organization.

And as the job market heats up and unemployment hovers around full employment, employers’ willingness to pay for skilled talent will increase and that means the easiest way to get a raise could be for employees to quit their current jobs for a new one. Many employers have set raise schedules that limit pay increases from year to year or within the same role, but don’t have the same restrictions when recruiting externally. As one worker stated, “The calculation is simple: It comes down to staying and getting a 1 percent raise, or leaving and receiving a 10 percent boost” according to an interview with CNN Money. Considering the additional cost to recruit (some reports estimate replacing a Millennial is $24,000), wouldn’t a small extra bump in salary be worth the retention?

Loyalty & Security

Relationships and trust are generally built and strengthened over time. As employees increase tenure at their company they build credibility, internal connections, and a reputation that’s worth something. Personal and professional relationships are valuable and enable people to get their job done. Starting over takes effort and time. According to Marcie Pitt-Catsouphes, Director of The Sloan Center on Aging & Work in a recent Forbes article, “The 50+ workers surveyed said the most important element for a quality job wasn’t pay and benefits (that ranked third). It was ‘promotion of constructive relationships at the workplace’.”

Plus with the effects of the Great Recession and the eradication of pensions over the past several decades, older workers feel less financially secure about their future and possible retirement. But, several studies show it’s not just about the money, older generations stay in the their roles and in their companies because they value the relationships and the work, itself. And with 60 percent of Millennials in the Deloitte Millennials Survey saying “a sense of purpose” is one of the reasons they chose their current employer, the importance of the work is something that employees across the generations can agree on.

In the end, regardless of age, maybe we all have more in common, after all. Because the data seems to show that today’s Boomers are yesterday’s Millennials and so on. Because if, on average, the best tenure we can expect from our youngest workers is 18 months, then perhaps our best course of actions is to plan for the best and prepare for the worst. That means building programs and workplaces that provide our youngest working generations the means and an environment to achieve their employment goals and succeed long-term with our organizations. All this while preparing actively for a recruitment strategy that supports the fact that the majority will ultimately move on.

For more detailed information based by occupation, industry, educational attainment, and more, visit the Bureau of Labor Statistics website.

Disclaimer: The author of this post is a Millennial, according to the generation as defined by the date range attributed by Neil Howe and William Strauss in 2004.

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