Millennials are predicted to have exhausted four different jobs by the time they are 31. This characteristic is crucial for business owners, especially when they consider the fact that millennials are expected to comprise up to 75 percent of the workforce in just seven short years from now. Contributor Victoria Willis Marketing Executive – AWH Legal.
Changing jobs and career paths is a part of life now more than ever before. These days, the average Briton switches employer every five years and the average employee turnover rate for UK businesses stands as high as 15 percent.
Although the reason for the rise in job-hopping is not always clear, the attitudes of society are. General attitudes towards those who change jobs have softened, and over the past decades the focus has been slowly shifting to the positive results of the job-hopping culture instead of the negative.
In the 60s and 70s, it was a common public opinion that people who changed jobs only did so as a result of company liquidation or being fired; a foreign concept to the younger generation nowadays, who are much more likely to seek new job opportunities on their own accord.
Industry specific employee turnover
Every organisation has its own rate of employee turnover and it tends to vary drastically depending on the industry. Take for example the retail industry, where the turnover rate is said to be as high as 25 percent; a whole 10 percent higher than the national average. Then compare this rate to an industry where the turnover rates have remained very low, such as the academic sector, where turnover rates stand at just 7.9 percent.
One of the most obvious negative effects of having high employee turnover is the significant costs a business will incur. The process of recruiting someone, particularly through a specialist agency, is expensive – made only more expensive when you consider the equipment and induction period they will require.
Depending on the employee’s experience, it’s likely they won’t perform at a high standard from the second they join the company. Most workers need time to adapt to their new environment and receive essential training before they are actually generating profits for the business.
So, what happens when you dedicate all of this time and money to welcoming a new employee, only for them to hand their notice in six months later? The money and time you spent was all in vain and you’re left with an empty vacancy once again.
Low workplace morale
The second most obvious consequence is incredibly low workplace morale. Employees will not feel motivated to help a company achieve success when their colleagues and co-workers are constantly leaving or changing, especially when they are frequently exposed to negative opinions and discussions about their workplace.
Low morale often leads to poor performance, with employees being expected to take up the duties of those who have resigned whilst continuing to manage their own. In addition to the accumulating workloads, poor performance can be further exacerbated by a generally glum and unnerved work environment as a result of the exiting employees. All of these issues make a company less productive and therefore less likely to make profits; a difficult cycle to get out of.
Why do employees leave?
Sometimes employees leave a company for reasons unrelated to their employer or job; however, the majority of resignations are still caused by factors relating to work conditions and can be influenced by the employer. CIPD’s 2017 ‘Employee Outlook survey’ revealed that 21 percent of UK employees are currently looking for new jobs elsewhere. Even though this rate has gone down 2 percent in the last couple of years nearly a quarter of the UK workforce seems to remain unsatisfied within their current role.
The latest research from Bupa confirms that 53 percent of employees identify trust as being a major factor in whether or not they stay with a company. In fact, almost a quarter of all UK workers admitted they have left a company in the past because of trust issues. The study further concluded that a reliable workplace has better rates of productivity, engagement, morale and turnover.
Other issues that employees listed as significant reasons to leave were:
Lack of progression and recognition; Poor workplace relationships; High workloads Exit interviews are an effective way to monitor why employees quit, as it gives displeased workers the chance to have their say about the company. However, do keep in mind that exit interviews only give you part of the picture. Also listening to the employees who are staying will help give you a more honest picture of how employees feel in general.
The easiest way to calculate your employee turnover
You will need employee data for a period of 12 months to get this accurate. Take the number of employees that left your company over the past 12 months and divide this by the average number of your employees your company has had over this period and times this by 100.
It’s that simple! You can compare your rate to national averages and depending on the available information also to your competitors and your industry in specific. How can you make employees stay? When asked this question, most employers will list employee benefits and perks as an effective retention strategy – and rightfully so!
You will undoubtedly have heard of the luxurious and admittedly over-the-top perks offered by high profile companies such as Twitter where employees are provided with on-site acupuncture and three catered meals a day. But what about more humble companies who can’t afford such perks?
Benefits for different generations
According to a survey by the Employee Research Benefit Institute, employees might not actually be as tempted by gimmicky company benefits as previously thought – particularly within the younger generation.
Baby boomers agreed that the perks they found to be the most desirable were comprehensive dental, health and optical insurance. 67 percent of older respondents cited they would give a job some consideration if they offered this perk, compared to 60 percent of millennial respondents. Alternatively, 12 percent of millennials said they would consider taking a role if additional paid leave was offered, something which only 6 percent of the baby boomer generation cited as important.
What do millennials look for in employers?
Adzuna recently collected important research which gives a detailed insight into what jobs millennials are most attracted to. Unsurprisingly, due to ever-increasing knowledge and experience with technology, millennials strongly favour the digital services over others.
Data collected from the ValueMyCV tool found that one in ten millennials had the word “digital” on their CV, while only 6 baby boomers had mentioned digital experience and skills. In addition, only 3 baby boomers listed social media as a skill, in comparison to the 1,297 millennials highlighting their experience and know-how within social networking. Maybe this explains why the majority of the world’s biggest social media sites and apps were founded by the younger generation. Facebook, Spotify, Tumblr, Quora, Lyft, Airbnb and Pinterest were all created by tech-savvy and ambitious millennials.
(2,919 millennials out of 22,982 CVs in total)