Is Millennial Retention Your Worst HR Nightmare?
Retaining talent, particularly among younger employees, is even more critical during Covid-19
Millennials change jobs more frequently than other generations
Work from anywhere provides more job opportunities
There are things you can do to minimize turnover during the crisis and beyond
No Question About It: Millennials Aren’t Sticking Around
Millennials—Gallup dubbed them the job-hopping generation —are known as being quick to switch jobs for a better opportunity elsewhere… at a cost of $30.5 billion annually.
Data from our employee engagement research supports the generalization. Comparing Millennials (22 to 39 years of age) with non-Millennials (40 years old and over), Millennials are:
55 percent more likely to be looking for a new job currently, 14 percent versus 9 percent
More likely to look for a new job in the coming year, 19 percent versus 12 percent, and
Less likely to stay with their organization for the long term, 32 percent versus 46 percent
But how much of the difference is real – and how much is hype?
Younger Workers—Of Any Generation—Rarely Stay Put at a Given Job
In reality, Millennials aren’t switching jobs any more frequently than previous generations. According to the U.S. Bureau of Labor Statistics, median job tenure across all age groups changed little between 1996 and 2012 except for employees 65 and over … whose tenure increased.
The Bureau’s data for 2008 to 2018 show a similar pattern. Job tenure increases with age but remains fairly consistent within age groups from one year to the next. The fact is that turnover is a challenge for organizations with lots of younger workers … and always has been.
As a rule, workers’ priorities change over time. Those just starting out focus on exploring their interests as they try to answer the question “what do I really want to do?” Soon after, the main concern becomes acquiring additional skills and capabilities to advance in their chosen career. For a variety of valid reasons (think student loans, buying their first home, etc.), young workers are highly-motivated by external rewards. In this new work from anywhere environment, employees have far more options for finding an employer who can offer what they’re looking for. Together, this set of priorities makes job-hopping – with its promises of higher pay and new experiences – appealing, and easier
The good news is that there are things you can do that will help you minimize the impact and retain younger workers – which means that taking the right steps now can help you increase retention not only of your Millennial employees, but also Gen Z workers and those that come after.
Three Ways to Improve Your Retention Rates
1. Diversify Your Workforce
Diversify your work environment. If most of your workers are right out of school, significant churn is inevitable. It might mean you can offer lower salaries but consider overall employment costs – which include onboarding replacements – and the impact on organizational stability. Hiring workers of all ages (not to mention other dimensions of diversity) helps mitigate the problem and offers the added benefits that come from having a more diverse workforce. And having a more diverse workforce will lead to more engagement among millennials, which leads us to the next strategy.
2. Build a Culture of Engagement
Not only are highly engaged employees happier and more productive, they also stick around. According to Gallup, high-turnover businesses (i.e., more than 40 percent annualized turnover) in the top quartile of engagement experience 24 percent lower turnover than those in the bottom quartile. Low turnover organizations in the top quartile perform even better, achieving 59 percent lower turnover.
3. Help Employees Grow and Develop
Find ways to help young workers feel they are growing their skills and advancing their careers within your organization. Nearly 9 out of 10 Millennials rate professional growth and development opportunities as important to them in a job. Take the time to discuss their career goals openly, accepting that they may not stay with your organization forever. Are their certifications or skills they need? Is there any way you can help them attain them?
Maybe your organization isn’t large enough to have many promotion opportunities, but can you enable your employees to grow within their role? For instance, can your sales associates become “senior sales associates” by achieving a certain sales milestone and skill level? Earning a new title – along with the pay increase you were going to give them anyway – can increase job satisfaction, even if their job remains essentially the same.
Focus on Retention Strategies Now
The challenge of reducing turnover among young workers isn’t going away – not with this generation or any of those that follow. The best retention strategy is to take steps now that make your organization more appealing to employees who are early in their careers: embrace diversity, create an engaging culture and help them develop skills for professional development. To learn more on how leaders in your organisation can unlock a culture of high performing and engaged team members, download our white paper: Transforming Attitudes and Actions