The employee turnover rate continues to grow each year for workers under age 25. According to the Q3 2016 ADP Research Institute® Workforce Vitality Report (WVR), the yearly turnover rate for employees under age 25 has accelerated by 2.6 percent from Q3 2015 to Q3 2016. Even though turnover has steadily increased for workers of all ages, the data shows that younger workers are more prone to job hopping than their older counterparts.
Here are possible reasons why:
Millennial Engagement Is Lower
According to Gallup, only 29 percent of millennials are engaged at work, and 60 percent are open to a new job opportunity. This lack of engagement could be seen as a response to the disconnect between workers and managers. Many employers expect engaged employees but do not necessarily incentivize that engagement, and millennial dissatisfaction with their current position may be the effect of management.
Job Hopping Leads to Wage Growth
According to the WVR, younger full-time job switchers have consistently experienced the strongest wage growth of any age group. They have the highest turnover and highest wage growth, so it pays to switch jobs. Wages accelerated by 2.3 percent from 2014 to 2016 for full-time job switchers under age 25, according to the WVR, while workers under 25 staying in full-time positions only saw wage growth of 0.3 percent.
Young Workers Work in High Turnover Jobs
For younger workers, employment tends to be in low-skill, low-paying jobs that have little to no room for advancement. According to the Bureau of Labor Statistics, younger workers make up approximately 20 percent of the hourly workforce but are half of all minimum wage earners. These young workers are likely in industries like food and hospitality, which can be stressful and exhausting but are in plentiful supply. They're jobs that are easiest to get and easy to quit.
Degrees Lead to Burgeoning Careers
For another segment of those under 25, turnover is driven not as much by an aversion to low-skill jobs but by burgeoning careers where workers are more likely to be recent college graduates poised to get their first jobs. For graduates who worked during college, the part-time job gets left behind in favor of the benefits from full-time work. And even though that first post-college job is likely more lucrative than the previous job, it's not necessarily their only stop on the way to long-term, meaningful employment. Young workers tend to switch jobs to increase their salaries and find the positions in which they can develop a long career.
Young Workers Are Searching for Meaning
Beyond salary, businesses looking to hire recent college graduates should keep in mind that this younger generation wants meaningful work. Accenture suggests that employers who provide meaningful work with a flexible, project-based structure will have more success retaining recent college graduates. And according to the ADP Research Institute® report, The Evolution of Work: The Changing Nature of the Global Workforce, 81 percent of employees feel positively about work that impacts society and 78 percent like the idea of defining their own work schedule.
Whether it's an overall lack of faith in employers, the consistent dissatisfaction with low-wage work or just the need to shake out kinks at the beginning of their careers, young workers have higher turnover. Their circumstances predispose them toward job switching, and even if it is a concern for employers, turnover can be healthy for a company, according to Gallup. Retaining these workers requires a company to make them feel secure, valued and like they contribute to a broader purpose.
For more insights on wage growth trends, download the ADP Research Institute® report: Workforce Vitality Index.
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