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Leaving already? How millennials' higher turnover rate impacts companies' hiring and the bottom line

Instability, flexibility tug equally on employers
Leaving already? How millennials' higher turnover rate impacts companies' hiring and the bottom line
Posted at 12:00 PM, Dec 26, 2016
and last updated 2016-12-27 08:34:07-05

CINCINNATI -- Not that long ago, a resume that showed four jobs in the last eight years might set off alarm bells for anyone who’s doing the hiring for job No. 5.

“Some recruiters may see this and think: 'Not loyal. Can’t commit. Doesn’t know what she wants in life,'” Dan Harris said of a hypothetical “late 20-something millennial” woman who was seeking a job. “Why bother hiring if she’ll just leave here in two years, costing us the time and money of training and other resources?”

But other job recruiters might view that resume from an entirely different perspective, said Harris, who described himself as a workplace insights analyst for Quantum Workplace, which develops “employee engagement software” in Omaha, Nebraska.  

"Other recruiters might see the same resume and think: “Flexible. Adaptable. Exploring different possibilities. May offer new and unique insights by having such a diverse background,” Harris said in an email response to questions about millennials in the workplace.

Gallup Inc., the company behind the Gallup polls, borrowed a term that’s usually reserved for armed robbery suspects when it said earlier this year that: “For most companies, millennials are a ‘flight risk.' "

“Overall, I’d suggest that as more millennials (born between 1980-1996) make up the workforce and as more baby boomers (1946-64) retire, there will probably be a shift toward a greater acceptance of job-hopping,” Harris said.

From the perspective of Mike McCullough, owner and president of the TRAK Group, a recruiting firm in Mt. Adams that interviews about 80 job-seekers each week, that shift, which can be costly to employers, has already occurred.

“Go back four years ago. The definition of stability has changed. Before, if you had a job for under four years, question marks were raised,” McCullough said.

“Now, (stability is) two years,” said McCullough, whose company shares space with the Cincinnati office of Management Recruiters International, which is headed by his father, Joe McCullough, who founded TRAK.

Recent data from CareerBuilder, which specializes in human resources software, finds that 45 percent of all employees plan to be in a job less than two years and that many millennials plan to have between 15 and 20 jobs during their lifetimes, McCullough said.

Other studies have similar findings.

The generation typically spends two years on the job before moving on to another position, according to Jeff Fromm, a Forbes magazine columnist and the president of FutureCast, a marketing firm that specializes in millennial trends. By comparison, the generation that preceded them, Generation X, routinely invests about five years with a job before making a change while Baby Boomers averaged seven-year tenures, Fromm reported.

Jobvite, which creates software for workforce recruiting from offices in London and San Mateo, California, said a survey it conducted early this year found that 42 percent of all millennials are likely to job-hop every one to three years. That percentage balloons to 55 percent for millennial women.

Millennials in the workplace are getting more and more attention because in 2015 their generation became the largest in the U.S. labor force, according to the Pew Research Center, a well-respected research organization in Washington, D.C., that analyzed U.S. Census Bureau data. There are now 53.5 million millennials in the labor force, roughly 800,000 more than Generation X, which now ranks second, Pew Research said.

Gallup estimated earlier this year that millennial turnover costs the U.S. economy $30.5 billion each year.

“Oh, that’s a no-brainer. It costs money to hire someone, to train someone with benefits that are supposed to be increasing 33 percent. It’s expensive to employ someone -- (and it’s) more than just salary,” McCullough said.

He used a simple example of how someone in the accounting department might be pulled away from their regular job for three weeks to train a new employee. If the person doing the training makes $2,000 a week, the company, in effect, would be losing $6,000 worth of time while the training is under way, McCullough said.

Chris Janson, the regional vice president who oversees three offices in Greater Cincinnati for California-based Robert Half, a specialized staffing firm that has 340 offices around the world, agreed with McCullough about the substantial costs that are linked to hiring a new employee.

“You have other people giving up their time to bring them along” and train them for the new job, Janson said.

He also pointed out that the low unemployment rate now means that fewer people are hunting for jobs, which pressures employers to sweeten their offers to attract qualified employees. The Bureau of Labor Statistics said the U.S. unemployment rate was 4.6 percent last month, the lowest that number has been for about 10 years, Janson pointed out.

McCullough, who is 33, and Janson both said they would want to know why someone changed jobs so frequently before they made any judgment about whether that person was a good candidate to hire.

“You have to look at why they left there … why are they leaving positions?” asked McCullough. “Are they being terminated? Are they changing industries? Were they recruited for this role?”

Katie Meyer, a 32-year-old who heads the nonprofit organization Renaissance Covington, pointed out that there is a theory that staying with one employer too long can be just as damaging to a resume as job-hopping might be.

“After seven or eight years it begins to look like stagnation and some people have said that they needed to make a move to continue to stay relevant,” said Meyer, executive director of an organization created to help revitalize downtown Covington.

“I’ve seen it happen where if you stay too long at one job you won’t look as exciting to a new employer,” she said.

Meyer stressed that she shouldn’t be considered a spokesperson for the millennial generation and that her employment history might be somewhat atypical.

After earning an undergraduate degree at the University of Kentucky and a master’s in urban policy from the New School in New York, Meyer went to work for the Kentucky Housing Corporation in Frankfort, where she worked for two years as an analyst.

She then returned to her hometown to go to work for Renaissance Covington, where she has worked for six years.