How to Keep Younger Workers from Jumping Ship
More than a third of millennial and Gen Z workers are planning to quit their jobs this year. Here’s what’s driving them out the door.
By Susan Ladika, Financial Times
More than one-third of young employees may already be eyeing the exits, making it imperative for insurers to figure out how to keep them from heading for the door.
"The name of the game is about attracting and retaining younger employees," said Monica Martin, senior director and global total rewards leader at WTW.
In a recent Resume Builder survey, 37% of 18-to-24-year-olds said they are highly or somewhat likely to quit their jobs this year, while 35% of 25-to-34-year-olds said they planned to leave in 2024.
In many cases, these young employees are "trying to figure out what their careers should be," said Stacie Haller, Resume Builder's chief career adviser. "They're not weighed down by kids or mortgage.
At the same time," the stigma of changing jobs often has waned over the past few years," Haller said, and employees "have more choices because of remote work."
For many companies, "the employer-employee bond is broken," said Jeff Hyman, chief executive officer at Recruit Rockstars.
The Covid-19 pandemic "really accelerated many of the changes I think were already happening," Hyman added.
Rather than sticking with a company for 20 years, as their parents or grandparents might have done, the average member of Gen Z lasts just 27 months at a job, a study by CareerBuilder.com found. Millennials don't stay much longer, with an average tenure of33 months.
That can be a particularly important issue in the insurance industry, where the unemployment rate was just 1.9% in July, according to the U.S. Bureau of Labor Statistics, compared with an overall rate of 4.3%. And the industry is also grappling with an aging workforce. The median age of insurance industry employees is 44, according to the BLS, and more than 700,000 employees are age 55 or older.
Reasons for leaving
In many cases, the top reason employees give for leaving a company is better pay.
"Pay has always been the No. 1 driver," Martin said. But now "pay is more important than ever before," due to inflation and economic uncertainty, and yet those same pressures can also make it challenging for carriers to increase salaries as a retention tool. "Employers don't have money falling from the sky," she said.
A WTW survey found that employees who are motivated by higher pay would want to earn 10% more before considering switching jobs.
In many cases, the quickest way for a young employee to get a "meaningful" raise and title is to switch jobs, especially as the number of mid-level managers in many companies has been reduced, creating fewer opportunities for promotions. Hyman said.
But constant job hopping can come back to harm employees, he said.
"As a recruiter I can't evaluate their experience or track record," Hyman said. "They haven't stuck around anywhere long enough to make an impact."
That means companies might not want to take a risk in hiring them. "You're kind of radioactive," Hyman said.
On the other hand, job hopping "might not be as much of a concern if the various positions have prepared the candidate for the new role," Michelle Reisdorf, district president at Robert Half, said in an email.
How to keep younger workers
In addition to better pay, another key reason cited for looking for a new position is learning and development opportunities, said Maria Amato, senior client partner at Korn Ferry. On the other hand, three-quarters of 25-to-34-year-olds also said they would stay in a job they didn't like if it offered strong opportunities for learning and development, she said.
The Catch-22, however, is that because many younger workers don't stick around for very long, companies often invest less in their career development, Hyman said.
If employees only stay for two years, organizations "can only afford to invest so much," and that decision may push employees to look for work elsewhere, he said.
By providing opportunities for internal career growth, "employees tend to feel more genuinely supported and often find more value in their workplace," Reisdorf said.
She also recommended managers maintain open lines of communication and hold regular check-ins with employees to address any workplace issues that arise.
Often younger employees are "looking for places where they can grow their career," Martin said. And they want in-office work experiences "to be positive, fun and engaging."
Having workplace flexibility also is crucial, Reisdorf said. "This doesn't necessarily meanadhering strictly to only remote or only in-office policies, but instead offering flexibility that enhances work-life integration while still meeting business needs."
A company's culture is also a consideration, Amato said. "Culture is not a reason for people to join a company, but it is a reason they leave."
