Your grandfather probably had a linear career path. He got a job straight out of school, gradually moved up the corporate ladder, gained more pristine job titles and earned a bigger paycheck. He knew he had made it, when he reached the corner office – perhaps even one in the executive suite. He stayed at his company until he retired, having only had one employer his entire career.
It’s a very different world we live in today. Today, people change jobs like babies change diapers. Career paths are often non-linear and play out across functions, jobs, and even industries.
Young workers, while no less driven by professional development, now prioritize flexibility, leadership training, and hunting down work that they find meaningful. As a result, increasing employee turnover has become an inevitable byproduct of the modern career path.
A look at the way we work today
Adam Kingl, a professor at London Business School, has found that number of jobs increase exponentially per generation. Our grandparents had 1-2 jobs, our parents had 2-4 jobs, Gen X will have 7-8 jobs, and Millennials are expected to have 8-16 jobs. You do the math and tell me how many jobs Gen Zs will have… If your guess was 32, you guessed right.
This number might seem absurdly high to you, but consider the fact that skills requirements are changing faster than ever, and employees now have to continuously improve, adapt, and acquire new skills in order to keep up.
According to World Economic Forum, some studies suggest that 65% of children entering primary school today will have jobs that do not even exist – and for which their education will fail to prepare them.
In practical terms, this requires people have to think of acquiring skills as a lifelong pursuit to remain relevant.
This sentiment is more prevalent among young employees. The average tenure of an employee below the age of 36 is 3.2 years. Bersin by Deloitte found that once an employee start feeling like he is no longer acquiring new skills in his current role, he’s likely to begin looking for the next job. This increases employee turnover rates vastly.
Historically, job hopping weakened resumes by questioning employee loyalty, but today, job hopping is accelerating career advancement. Workers who stay with a company for more than two years are said to be paid 50% less. Job hoppers, on the other hand, get a steeper learning curve, are higher performers, and are more loyal to their company, because they want to make a good impression for the while being.
Patty McCord, former chief talent officer for Netflix (and the leader of Netflix’s current innovative work culture), shared in a FastCompany article that employees: “build skills faster when changing companies because of the learning curve.” Her advice to companies: “view employees as smart contributors from the beginning.”
In other words, if both new hires and employers acknowledge that the clock is ticking from day one, perhaps both will treat the two years with greater urgency. Paradoxically, scarce time may drive abundant results.
Leading companies are adapting to the increasing employee turnover
Business leaders and HR professionals have a visceral drive to retain great employees when they find them, as shown in a recent LinkedIn Global Recruiting Trends. Retainment has long been viewed as critical to maintaining a competitive advantage.
However, due to the reasons explained above, long-term employee retention increasingly seems like an impossible task. Companies that fail to develop strategies that specifically address the higher employee turnover rates risk limiting their access to critically needed skills.
The Human Capital Institute says it bluntly: “Retention is an overrated strategy that jeopardizes a company’s success, longevity and competitive advantage in the workforce.”
Instead of focusing on retention to limit employee turnover rates, companies should focus on creating strategies and a culture that embraces a hybrid workforce consisting of a mix of full-time employees and external workers like freelancers and consultants.
Fostering a hybrid workforce gives companies to access the critical skills they need to pursue their goals.
PwC finds that 76% of CEOs are concerned about the availability of critically needed skills in their workforces. However, only 26% find that it’s easy to attract such skills. The vast majority of companies surveyed respond to these challenges by enforcing strategies that allow them to access more of the new talent economy. Notably, nearly 4/5 are embracing remote work.
Why employee turnover should be leveraged
There’s great reasons for doing so.
According to the 2017 Workforce Productivity Report, freelancers and external workers bring greater efficiencies, are able to deliver specialised skills, and can seize new opportunities faster.
On the contrary, research from Harvard Business Review found that long-tenured employees are the least likely to be a source of innovation. They simply grow so accustomed to the company mentality of “how we do things around here” that they lose the ability to think innovatively.
As a final remark, consider this interesting insight: Researchers examined how both roofers and skaters examine the problem of carpenter’s reluctance to wear safety gear. Skaters envisioned solutions much more novel than those adopted by carpenters.
In corporate settings, business professionals should consider hiring the potential “skaters” and harness the benefits of shorter tenures as a competitive advantage.
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