Millennials make up 35% of the workforce, making them the biggest and most significant generation in the UK economy.[1] Their Gen Z successors are also rapidly swelling the ranks. These groups have acquired a reputation for fickleness: few stay with their employers for the long term. But with the right role and company, Gen Y and Gen Z retention can be completely transformed.
DO millennials really move more often?
Deloitte undertook a global survey of over 10,000 millennials (born between 1983 and 1994) to look at how long they intended to stay in their current roles. They found that 43% of millennials plan to leave their jobs within the next two years, and that only 28% planned to stay beyond five years.[2] Millennials will change jobs 20 times in their career on average, twice as much as baby boomers.[3]
US labor data backs this up. It shows that the median tenure for employees aged 25-34 is 3.2 years, while the median tenure for employees aged 65 or over is 10.3 years. For Gen Z the problem is even worse, with median tenure for 20-24 year olds at a mere 1.2 years.[4] It seems that younger generations really do move around a lot more.
What are millennials looking for?
But this isn’t without fair cause. Millennials are, more than the generations that came before them, looking for roles that fit their lifestyle. In exchange for opportunities to learn and advance, for having a good manager, and having interesting work, they deprioritise compensation.[5]
But as well as lifestyle, millennials are seeking purpose in their work. Only 30% of millennials who state that they don’t know what their organisation stands for and what makes it different from competitors say they plan to stay with their employer for at least a year. Yet, amongst those who feel they do understand their company’s purpose, that figure is 71%. That’s a huge difference, and of course, many of those will plan to stay well beyond a year. [6]
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Why does it matter?
We know how important retention is, and how much poor retention can cost a business. Low turnover rates can easily be the difference between profitability and business failure. Yet the financial benefits to improving engagement through a sense of purpose go beyond retention alone. Businesses who have been able to double the ratio of employees (from an average baseline of 33%) who agree with the statement “The mission or purpose of my organization makes me feel my job is important” have been able to realise a 34% reduction in absenteeism, a 42% fall in accidents, and a 19% improvement in quality of work.[7]
What does this mean?
The evidence is clear: companies that communicate values and purpose to their people, and the importance of their roles within the mission, simply don’t experience the problem of poor millennial retention.
[1] https://home.kpmg/content/dam/kpmg/uk/pdf/2017/04/Meet-the-Millennials-Secured.pdf; https://www.theactuary.com/news/2017/01/2017-a-tipping-point-for-the-uk-as-non-working-population-rises-faster-than-workforce/
[2] https://www.independent.co.uk/life-style/millennials-jobs-career-work-salary-quit-young-people-study-a8361936.html
[3] https://www.eab.com/research-and-insights/continuing-and-online-education-forum/studies/2015/designing-programs-for-the-millennial-workforce
[4] https://www.bls.gov/news.release/tenure.nr0.htm
[5] Jim Clifton and Jim Harter, It’s the Manager, New York: Gallup Press, p. 40
[6] Jim Clifton and Jim Harter, It’s the Manager, New York: Gallup Press, p. 31
[7] Jim Clifton and Jim Harter, It’s the Manager, New York: Gallup Press, p. 32
