Your employees are more loyal than you think
The narrative is familiar by now: Job-hopping is increasingly common in the United States, while long-term employment relationships are hard to establish. But new research shows that the story is much more complicated; in fact, business leaders of a generation ago would have envied the low job-switching rates that U.S. companies enjoy today.
Given these stats, why is the perception of increased job-hopping so widespread? The first reason is that one highly visible cohort — male employees — do in fact stay with their employer for shorter periods of time. The second reason is the generational narrative, branding millennials as the job-hopping generation. A number of recent studies and surveys refute this view, but perception can take a long time to change. The third reason has been the strong U.S. labor market.
So, while job-hopping may not be as common as many people think, the trends suggest employers should prepare for a future where job-hopping does become the new normal, at least for a while.
How should business leaders prepare? First, they should take a fresh look at their recruiting models to ensure that they are attractive to female employees, as women have become significantly more likely to stick with their employer in recent decades.
A second trend employers can capitalize on is that Americans are moving at historically low rates. In 2019, for the first time since tracking of mobility started some 70 years ago, less than 10% of the population moved.
Third, employers can review their compensation bands. Don’t simply pay according to traditional norms in the industry. Instead, pay how much the position is worth to you, making sure to adapt your pay and benefits to local labor-market conditions.
Finally, don’t buy into the narrative of the inevitable rise of the job-hopping millennial, and don’t give up on fixing your retention challenges after a few small setbacks. Remind yourself that 95% of all Fortune 500 companies have operated during times with lower overall retention rates, so you can probably do it too.