Job-Hopping: Why is it on the rise?

Why are so many millennials job hopping and what are they seeking?

The term “job-hopping” has made its way to the main-stage in the past decade. It seems that the only thing more intense than the actual topic are the opinions associated with it. While the opinions entertain a spectrum of critiques, one fact is irrefutable about job-hopping- it is on the rise. Good, bad, or indifferent- it’s here. 

In modern times it’s common to see people do stints with multiple companies in a 3-year period; 8 months, 18 months, or 3 years are all respectable time frames for professionals to be in role. 

Millennials + Job Hopping

Critics have been particularly hard on millennials as the biggest culprits of this new trend, resulting in a whole generation taking the brunt for this employment tactic. As if millennials invented it in 1995 as a way to spite all former generations. Older generations have historically seen job hopping as a career killer. Studies have shown that the millennial generation is the most apt to change, possibly resulting in a higher comfortability with moving from job to job or company to company.

Millennials or no millennials- the question is, “Why is it on the rise?” If the stats were to confirm the theory that it is truly millennials who job hop more than others, what are they seeking? What are they missing that they need to go from company to company so quickly? 

There is a long list of possible answers: different experience, better boss, more appropriate culture, higher pay, and the list could go on. 

It may be all those things… or none of them. My theory resides elsewhere. 

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My theory is that individuals are looking for hope.

My aspiration in writing this article was to help explore the psyche of the individual; to shed light for hiring managers on the reality some individuals face in today’s ever-changing climate. Part 2 of this article will dive into different ways leaders can help retain top talent in a difficult market.

At the end of 2018, millennial debt reached over a trillion dollars. Student loan debt for millennials is 300% over the next leading generation. This rise in student loan debt could equate to a $1,200 monthly bill for a 22-year-old fresh out of college. To put that into perspective, in the 1950’s my grandparent’s mortgage was $165 per month. That is less than 1/7th of a $1,200 student loan payment. That $1,200 is JUST their student loan payment, not factoring in other living costs.

To further put this in perspective, college grads earn on average ~$50,000 per year. Not including taxes, health insurance, or any other payments, that is $1,923.07 per paycheck. BEFORE taxes, that same $1,200 student loan payment is equivalent to roughly 31% of their take home pay.

While salaries have surely increased since the golden years of a $165 mortgage, it doesn’t outweigh the rising cost of bills, expenses, and inflation. Millennials are the worst positioned generation for their future compared to any other group of individuals. The constant fight to stay above water is taxing on an individual, which leads to searching for means to constantly combat the monetary challenge.

Financial woes are obviously not exclusive to millennials. However, with the rising debt crisis for student loans mostly in individuals 35 and under, an increasingly expensive housing market, combined with salary averages of individuals in the millennial age bracket- millennials become an interesting market to look at from this perspective.

Hypothetically, let’s say millennials are the culprits of the job-hopping craze. What does that tell us?

It means that, like all generations, millennials are forced to look at their finances and face the doom of their current state and even greater doom of their future state. The same dreams that were relevant 30 years ago, are still relevant today; buying a house, vacations, retirement, having children… living the American dream. But how is one to look at those goals when you’re staring at your finances being in the red month after month? Those dreams are now faced with greater hurdles than ever before.

That’s where hope comes in.

Reasoning

When a 29-year-old has racked up 4 jobs in the past 6 years, I imagine hope has played a large role in their decision making. Hope that the new role will give them the experiences necessary to succeed. Hope that maybe with this new role they can make more money and have a cushion month to month. Hope that this company will align more with their values and allow them to flourish and have a longer runway. Hope that somehow, someway, this job will be better for their future.  Hope to live a better, more financially free life.

A common critique I hear about millennials and job hopping is that millennials “don’t like the hard work…so they move on.” I’ve found that statement couldn’t be farther from the truth.

I don’t believe millennials take the decision lightly to leave a company and move on. It comes with a lot of fear: Will you be accepted in the new culture? Did you truly get a sense for the core values of the company? Will it be everything you hoped for? There is excitement and anxiety in that leap but hope is what makes that leap doable.

As finances become a major headache in millennial’s life, a new job with more money is incredibly exhilarating. It’s more about survival than being “irresponsible, flighty, not sure of what they want, or not loyal.” 

While companies try and evolve their compensation practices, employees know that their earning potential can be stunted: promotion increases can only go so high, merit increases have a maximum to them, and ad hoc increases are fewer and farther between in some organizations. The likelihood that your salary will increase substantially to cover the long list of increasing bills becomes small and that’s when employees look to feel hopeful from other sources.

Most companies don’t have a strong reputation for compensating internal talent better than they do external talent. Not keeping up with market trends for internal candidates further perpetuates the cycle of “the grass is greener,” because guess what? It sometimes is greener.

If my hypothesis stands true, Maslow’s Hierarchy of Needs plays a critical role in the prioritization of said needs. Individuals need to take care of their basic needs (rent, food, water, safety) first before worrying about self-actualization and cognitive needs. Unfortunately, the only thing that rent, food, water, and safety have in common is that they all cost money.

The Advice

My advice to the critics- don’t cast a metaphorical blanket on an entire generation. Everyone has a story. Everyone has a reason. Everyone’s journey looks different.

My advice to hiring managers- short tenure is not something that should be ignored; ask the right questions, be curious, and make good assessments. However, don’t let it be a make or break factor in your hiring process. You may be giving up someone great.

In Part 2 we will explore how leaders can make compensation a factor in the engagement equation, and not the entire equation itself.