Reducing the high millennial turnover rate
We are rapidly reaching a point in the U.S. workforce composition at which company leaders must decide how they are going to approach and manage their multigenerational constituency. Employers must focus on recruitment and management strategies that keep millennials engaged and turnover down as baby boomers leave the workforce and Gen Y moves into their place.
Millennials, or Gen Y, are those who are in their early 20s to late 30s. Three key factors are important for understanding the millennial workforce. First, they have more career choices than the generations preceding them. Second, this array of choices has led to high turnover rates. Finally, the characteristics and needs of millennials are different from their predecessors and this difference leads to the disengagement that results in high turnover.
Today’s employees are working in a strong economy with a 3.6% unemployment rate, so they have more job choices than did previous generations. Seventy-five thousand jobs were created in May 2019 alone. Millennials are leaving because they can.
In the next 15 years, 77.5 million people will retire. As the boomers retire, millennials will dominate the workforce. Long-term employment relationships are becoming an outdated idea.
Today’s workers thrive on short-term rewards and incentives and this mindset is contributing to increased turnover among this age group.
The cost of turnover will reach $680 billion by 2020. According to the Work Institute, one in three employees leave their place of employment every year.
Turnover can be measured in terms of productivity as well. Employees looking elsewhere experience decreased productivity as they focus their energy on moving on. A study by PeopleSpark found that 65% of the workforce is disengaged and this disengagement can decrease operating income up to 33%. Job hunting employees also affect the productivity of others through poor attitude and lack of interest.
With the threat of boomers retiring and millennials leaving in such vast numbers, today’s managers must be ambidextrous in focusing on the art and science of people. Managers who maximize generational competencies will experience the most growth and a clear understanding of Gen Y will make the transition into the future easier.
Millennials had a very different upbringing than the generations before them as their Boomer parents built their self-esteem and taught them that they deserve success. Boomers as parents are highly involved as the “fix your kids’ lives” generation. This involvement, known as helicopter parenting, has impeded millennials’ sense of independence and fostered the feelings of impatience that lead to turnover in this work force segment.
When millennials leave, they leave quickly. Nearly half of all turnover occurs with those in their first year of employment. Gen Yers seek opportunities to enhance skills and when organizations do not create a learning environment, they seek other opportunities. Though reasons for voluntarily leaving vary from organization to organization, the top three reasons millennials leave their jobs include the desire for professional growth, the need for work/life balance, and to escape negative managerial behavior.
The millennial Generation has an insatiable need for feedback that allows them to grow professionally. In many workplaces, millennials are looking for the type of performance review that many of us are accustomed to getting on an annual level. Monthly or even weekly feedback sessions will let millennials know you care about their growth. Support them with training and allow them to think for themselves and make mistakes.
Problematic interpersonal relationships also account for a great deal of turnover among millennials. People do not leave organizations. They leave bosses. “Problematic coworkers were the top work environment-related reason employees quit last year and 36% of employees cited this as the most important reason for leaving” indicates the Work Institute. Encourage managers to continue to develop their conflict management skills and be transparent in their dealings with millennials.
The necessity of allowing flexible scheduling options also cannot be stressed enough and employee will seek positions in which adaptable scheduling is offered in addition to working from home. Boomers and Gen Xers also like the idea of scheduling flexibility but for Gen Y flexibility is a deal breaker. Many Millennials say they would take pay cuts in exchange for work flexibility.
The foundational issue of employee turnover is a top priority in today’s organizations. Greater knowledge of how to best engage Millennials allows leaders to better navigate the unique mindset and needs of this age group.
Contact Constance Reece at (570) 484-2148 or CReece@lockhaven.edu for more information on this topic.
Constance Reece, professor of communication, Lock Haven University
Fred Coon, CEO of Stewart, Cooper and Coon
Kathy Gamboa, senior operations and strategy executive.