A Mass Exodus of Millennials?
New research finds millennials leaving jobs more frequently and in greater numbers than their older co-workers. Employers and HR must put special emphasis on flexible work environments, advancement opportunities, and coaching to improve retention rates among this growing employee population, experts say.
By Mark McGraw
It may seem that, just as you're getting used to working with the millennials in your organization, they're already leaving.
And they're moving on in large numbers, according to a recent survey. A poll of 233 human resource professionals from various industries, conducted by Millennial Branding and Beyond.com, found 30 percent of respondents saying their organizations had lost 15 percent or more of their millennial employees in the past year.
These figures come on the heels of recent Millennial Branding statistics showing 45 percent of companies experiencing high turnover among employees identified as millennials -- by a 2:1 margin compared to their older co-workers.
This particular cohort -- workers ages 18 to 30 -- approaches work in a way that many organizations have not prepared for, says Dan Schawbel, founder and managing partner of Boston-based Millennial Branding.
"[Employers] are not used to a generation of job-hoppers. They're used to generations of workers who get a job and stay there for life," says Schawbel.
"[Generation Y employees] view work differently," he says. "While older generations are looking for salary and benefits, millennials are looking for meaningful and flexible work. What they want from their jobs is different, and that's why they leave in a couple years."
Viewed in an historical context, the trend of high turnover among millennial-age employees isn't particularly surprising, and is somewhat inevitable, says Sayed Sadjady, a principal with New York-based PwC's people and change practice.
"Millennials have only recently entered the workforce and are at the very early stages of their careers," says Sadjady. "In the earlier stages, employees traditionally switch jobs at a higher frequency than more experienced workers, and the frequency of change will continue for a period, as they try out different roles and organizations until they find the right one for them."
However, this "normal phenomena" has accelerated throughout the latest recession, he says.
"Whenever unemployment rates increase in the labor market, the entire career cycle slows down, which impacts entry and exits into the labor market at all levels. This in turn can cause new entrants to the workforce to accept positions they intend to change as soon as the 'right roles' become more readily available again."
And, millennials weigh much more than the work itself when pursuing the "right roles" with other organizations. The majority of HR professionals surveyed said they see Gen Y workers leaving in search of a "good cultural fit." Respondents also cited "better offers from another company (30 percent)," professional goals "aren't aligned with the company (27 percent)" and "a lack of career opportunities (13 percent)" as common reasons why millennial employees are leaving.
What's this mass exodus costing employers? According to the Millennial Branding and Beyond.com survey, 87 percent of companies said losing and replacing a millennial employee costs between $15,000 and $25,000.
Companies pay the price in terms of morale and productivity as well, the study finds. For example, 71 percent of companies reported that losing millennial employees increases the workload and stress of current employees, and 56 percent said it takes between three weeks and seven weeks to hire a millennial and get him or her up to speed in a new role.
As more millennials join the workforce and begin to move up the ranks, these costs only figure to get steeper for employers, says Schawbel, noting millennials' desire for flexible work arrangements as a key to retaining not only talented Gen Y workers, but employees in other age groups as well.
"HR people will have to recognize that creating a flexible environment benefits all workers. If [employers] don't create that environment now, it's going to cost them a lot more."
Schawbel notes that nearly half (48 percent) of respondents to the Millennial Branding and Beyond.com survey said their companies offer flexible work environments.
But, "it should be all of them, honestly," he adds. "All generations in the workforce have shown they want workplace flexibility, but millennials think they need to have it."
Some companies, however, are making strides toward creating the type of environment that attracts and retains this growing employee population. In addition to providing flexible work schedules, for instance, 40 percent said they have implemented mentoring programs and 37 percent indicated they offer internal hiring opportunities.
Employers would be wise to advertise opportunities available within the organization -- even short-term projects -- that allow millennials to experience various facets of the business and expand their knowledge base, says Schawbel.
Training and coaching will prove to be especially critical components of Generation Y's professional development, adds Tacy Byham, senior vice president of leadership solutions with Pittsburgh-based Development Dimensions International Inc.
Byham points to DDI's most recent Global Leadership Forecast, a survey of 1,987 HR professionals and 12,423 business leaders of various ages, which found the Gen Y leaders surveyed placing a greater emphasis on their personal development plans than leaders from other generational groups.
"This report shows definitively that millennials crave more coaching than any other generation, which is something that older generations could absolutely provide to them," says Byham.
"The problem is not that millennials are self-absorbed and don't want coaching. The issue is that boomers aren't necessarily feeling confident in their skills to be a good coach. The younger generation isn't learning because the older generation isn't passing down wisdom. What our research showed is that millennials are asking for it."
Indeed, the importance of charting a career path and outlining for employees what they must do to keep advancing may be the greatest for millennials, says Schawbel.
"If they don't see a path up," he says, "they see a path out."