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Why is there more turnover than ever?
Millennials seek security by learning new skills and delivering the most value.
How to approach candidates with a history of short tenures
How to Retain Millennials longer than average
And in the past few years, millennials have grown into the largest percentage of the U.S. labor force. Due to this increase, the average tenure of all employees has decreased by almost 8 months since 2014. On average, Millennial employees (25-35) have a tenure of 2.8 years. In the past, many hiring managers and recruiters viewed this “job hopping” as a negative, with 65% of employers reportedly opting out of interviewing candidates with short-lived positions at previous companies. But if we look closer at the reasons for the shorter tenure, we’ll see there are plenty of explanations, and that overall, this is actually good news for recruiters!
On average, Millennial employees (25-35) have a tenure of 2.8 years.
Ultimately, more individuals looking for jobs means more business. Recruiters also serve as thought leaders in the employment industry and can guide hiring managers in differentiating the “good” job-hopping from the “bad”. The short tenure trend is also a great reminder for hiring managers to check in with their organization’s recruitment and management processes to ensure they’re optimized for retention.
There are a number of reasons for the high turnover rates we are seeing. Gen Y came of age while the world of work was changing drastically and it impacts the way they view their careers. Take, for example, the rise of unicorns and Silicon Valley. Young professionals want the opportunity to work on the ground floor of exciting, revolutionary companies that have the potential for meteoric rises. Despite the impressive perks offered, however, even these tech giants have trouble retaining talent (Facebook: 2.5 yrs ; Uber: 1.8 yrs ; Tesla: 2.1 yrs ; AirBnB: 2.6 yrs (Data from 2018)).
Another significant event for Millennials was the Great Recession (2007-2009) which reconfigured how they think about job security. The massive layoffs and rising unemployment rate proved that tenure doesn’t always give you job security. Instead, Millennials seek security by learning new skills and delivering the most value. And Millennials’ perspective on work and life is different from older generations, too. While older generations viewed their jobs as simply a way to pay the bills, Millennials want jobs they are passionate about and will hop around in order to find that.
The private sector’s shift from traditional pensions to 401(k)s is another trend impacting employee tenure. Companies have made this transition since defined-contribution plans (401(k)s) are easier to manage and less expensive. With pension plans, employees would put 20-30 years into one job and then receive a steady stream of checks from their former employer once they retire. As of 2018, only 17% of private companies offered pensions. Employee loyalty has mirrored the pension plan’s decline. With the traditional long-term retention strategy of out of play, job-hopping becomes less of a monetary risk, leading to a whopping 60% of Millennials stating they are open to new job opportunities.
As a recruiter, knowing about this “three year itch” is hugely beneficial when it comes to sourcing both active and passive candidates. For passive candidates, odds are, if you search for individuals hitting that 2.5-3 year mark within their organization and reach out to them to see if they’re interested in a new opportunity, you’ll see high interested response rates. And active candidates can be dome of the most qualified and engaged!
So, what do you do when a candidate has the right skills but you see a history of short job stints? First, make sure to ask the right questions. Why did the candidate switch jobs? Did their last position offer an opportunity to learn and grow? If not, did they proactively ask for more responsibilities before choosing to seek new opportunities? These types of questions can help determine if the candidate is passionate about learning new skills and simply didn’t want to stay in a position where they felt stagnant. If they chose to leave their past employer because of a poor culture fit, take note of what questions they’re asking. Are they asking questions about your company’s culture to try to determine if this will be a better fit? Are they doing the right due diligence to avoid making the same mistake again? When explaining why they’re looking for a new opportunity, notice if they are badmouthing their current or past employer. This is a sign of immaturity and simply bad interview practice.
Second, look for positive and negative resume trends. Notice if a prospect took any courses or joined any employee development groups to supplement a position that wasn’t offering much in terms of career growth. Also consider how many times they’ve changed jobs in the last five years. More than 3 or 4 times could be an indication that they’re not sure what they want to do, don’t know how to take initiative, or are impatient.
And while job-hopping is a long-term trend, we also know that for growth and cost-savings, businesses strive to retain their talent. Gallup estimates that high Millennial turnover rates cost the U.S. economy $30.5B annually. So how can companies increase retention from both a recruitment and management perspective?
Recruiting for retention comes down to clear communication and expectation setting. Make sure to clearly communicate your company’s culture and values in your recruitment outreach and in the interview. Use structured objective interviews to screen candidates, clearly convey what will be expected of them in the position, and make sure they have the right skills to do the job. A take-home test project or paid trial is a great way to ensure your prospect is actually up for the job.
When it comes to managing and retaining Millennials, it’s important that leaders recognize this generation wants different things out of work than older generations. As a manager, you must...
Have regular conversations about your employees’ career aspirations.
Provide continuous feedback and recognize employees’ achievements and career milestones.
Prioritize work-life balance to avoid “Millennial Burnout”.
Check your compensation and benefits plan. Make sure they’re meeting industry standards.
Implementing the above guidelines will increase the average tenure of your Millennial employees, but also make sure to learn what you can from employees who choose to leave. Always conduct exit interviews to pinpoint why someone is choosing to leave and adjust accordingly if they offer valuable insight.
All in all, Millennials aren’t just looking for a job. They’re looking for a career and a place where they can learn and grow. They want positions where they can create meaningful impact. If an organization isn’t offering them these opportunities, they won’t hesitate to leave. Recruiters have the invaluable task of placing people in these fulfilling positions. Recruiters can also revise their strategy and, together with management, improve employee engagement and retention. This job-hopping trend likely isn’t going anywhere so, as a recruiter, your plate might be more full than ever! Tools like Fetcher can help save you time and help you filter our candidates who are switching jobs for the wrong reasons.
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