Economy

Why Millennials Change Jobs

May 6th 2015

By:
Laura Donovan

Young people are often seen as uncommitted workers always looking for a new, better job, but a new Wall Street Journal story reveals that if companies want to improve retention rates of Millennial employees, they can start by looking at the salaries and benefits packages offered to young workers.

Using 2014 Bureau of Labor Statistics (BLS) statistics, the report found the average worker between 25 and 34 stays at a job for three years, which is way below the 5.2-year average for workers ages 35 to 44. The discrepancy might not look so good to members of the Baby Boomer generation, though, as a 2014 PayScale and Millennial Branding survey found that Baby Boomers think people should remain at a job for at least five years before transitioning into something else. 

Melissa Murray Bailey of consulting and research company Universum told The Washington Post last year that the workforce operated quite differently for Baby Boomers when they entered.

“In the Baby Boomer generation, everybody had pensions, and that really facilitated lifelong commitments to a company," Murray Bailey said. “As companies have done less and less of that, there really is less of a mutual expectation that people will make that commitment.”

As pointed out by FiveThirtyEight, people in their 20s are often new to the workforce anyway and still figuring out what they want to do with their lives. They might change careers to avoid being professionally unsatisfied until retirement, which is happening later for many Americans following the 2007-2008 financial crisis.  

Young people also earn less money than their 1980 counterparts did at the same age. They also finished college during or after the Great Recession when there were few available jobs, giving employers leverage to offer lower paying jobs to graduates with little to no work experience. Even though job prospects have gotten better over the last few years, entering the workforce during tough economic times can limit workers' income for the rest of their careers, according to Yale University Economist Lisa Kahn. Kahn observed that even 15 years after graduation, workers face a 2.5 percent loss in earnings, and those who start working when the economy is bad are less likely to achieve big career milestones like landing a promotion.

"Especially in this economy, things that demonstrated loyalty from an employer to an employee are disappearing," Lydia Frank, director of editorial and marketing at PayScale, told Fast Company last year. "There’s just not this sense in the job market that your employer is necessarily going to take care of you. If I don’t like what I’m doing; if I’m not being paid well for my skill set; if I’m not in a job that’s utilizing my training and education, why would I stay? I think that’s a fair question."

Some respond to mediocre treatment and compensation from higher-ups by leaving their current job for a better paying role elsewhere. Though there are plenty of risks associated with switching jobs --- getting a horrible new boss, not fitting in with the culture, having to prove oneself as the new person --- young people want and need to make more money to build up their savings. This is especially important if they happen to be parents as well. As ATTN: reported last week, a new study by youth empowerment nonprofit Young Invincibles found that one in five Millennial parents is living in poverty. Though we've also reported that fewer young people are having kids, those who do become parents have a lot at stake if they don't earn high paychecks, so job hopping might be the only way for them to provide for their families and be in an environment that honors parental needs. 

Young people also have massive student debt to worry about, so if their current job isn't helping them pay off their loans quickly enough, they may move to a company that will better accommodate this need. 

“The economy has forced Millennials to focus more on money than things they used to prioritize, like work flexibility," Dan Schawbel, founder of the research and consulting firm Millennial Branding, told WaPo in 2014. 

Companies also have to be flexible, particularly if they're new and unestablished like the workers they tend to attract. Randy Duax, managing director of recruiting firm The Howard-Sloan-Koller Group, told Business Insider in 2012 that tech companies should be especially understanding of workers who move on quickly, as technology itself is constantly changing.

"Instagram was acquired after less than two years, you know?" Duax said to the publication. "How many companies exist solely because of the iPhone, which is only five years old? Companies and people need to adapt more than ever, and I think the durations people stay somewhere can be a byproduct of this. If the reasons someone made a move makes sense, then it’s not that much of an issue. Better opportunity, better company, more responsibility."

With student debt, smaller paychecks than previous generations earned at the same age, underwhelming treatment from bosses, and the fear that they could be let go or laid off at any moment without severance or ample notice, young people don't feel like companies deserve loyalty anymore. That said, too much job hopping can put off prospective employers.

"You don’t want to burn bridges," Lydia Frank told Fast Company last year. ‘If your last three jobs have all been six months long, your next employer might have some questions about that."

For some managers, job hopping is less of a red flag if the person is merely searching for his or her dream job and not simply all about money and power.

"If you're going to go for another opportunity, do it for the right reasons and don't do it too often," Richard Dukas, CEO of Dukas Public Relations, told Business Insider. "Do it because you're still looking for the right career for yourself, your calling, your niche, but don't do it because you're trying to climb the corporate ladder."