The proverbial retirement-after-40-years-with-a-gold-watch-and-pension are as passé as, well, a gold watch — or any watch, really, that doesn’t track your vitals and read your texts. Another relic? The very idea of lifelong employment at one organization.
Instead, today there is an overriding belief that if you stay too long at one company, people will wonder what’s wrong with your skills or ambition. And this is not just a millennial phenomenon.
I’ve written before about why old-school rules about retention don’t apply to millennials. But I still see headlines bemoaning millennial retention everywhere I look. Why are companies using millennial retention rates as a golden measure of success? Lately I’ve been wondering if retaining entry-level employees is even a worthy goal anymore.
Job hopping is an “everyone” thing, not a millennial thing
Flipping jobs is one of those things that’s easy for to pin on those “entitled millennials.” After all, research from Deloitte found that two-thirds of millennials intended to leave their current organizations by 2020.
But this phenomenon might not be specific to millennials. The Bureau of Labor Statistics found that three million Americans quit their job in December 2015, the highest number since 2006, which tells me that all generations looking for greener grass.
Loyalty is a two-way street
And to be fair, sometimes it’s not the worker quitting on the company, but the company quitting on the worker. Loyalty is a two-way street, and one of millennials’ first impressions of the business world was watching major corporations implode during the financial crisis. All generations clearly found out what happens when the chips are down, and seeing huge swaths of laid-off workers has majorly impacted everyone’s perception of loyalty.
Furthermore, many companies don’t stick around long enough to hit middle age. The average lifespan of an S&P company dropped from 67 years in the 1920s to 15 years now, according to research conducted by Richard Foster, a lecturer at Yale University.
Millennial retention is not reality
When you consider the forces weighing on longevity from both sides, it’s easier to grasp why I no longer recommend that retention in and of itself should be a company’s top goal. Savvy companies acknowledge that, while also realizing they are not necessarily in a place to commit to an employee for 40 years, either.
Some companies are instead embracing the concept of a “tour of duty” (from the must-read book The Alliance), where the employer and employee jointly agree on a specific “mission” that is beneficial to both employer and employee, who are “allies.”
In many ways, turnover can be good for everyone since the exodus is fluid: Employees may be leaving you, but others are flowing in, and bringing along fresh ideas, new perspectives and a renewed enthusiasm. In fact, right this minute, someone else is grooming your next superstar.
Is retention right for you?
Some companies, of course, take pride in their impressive ability to retain employees. One great example is Location Labs, a Silicon Valley-based company that boasts a 95 percent retention rate and has never laid off an employee. Make no mistake, though, they have to work at it.
If you want to emulate that model, be prepared to offer a ton of advancement and training opportunities, a unique culture, assignment variety, internal mobility, an aggressive compensation package and the other goodies and opportunities that people look for in their new posts.
The world is changing, and many companies are changing with it. I hope more organizations will realize that it’s not the tenure of the employee but their contributions that really matter.
What about your company? Are you aiming for high retention or have you embraced the “tours of duty” concept? I’d love to hear your stories in the comments.
Lindsey Pollak is the leading voice on millennials in the workplace, trusted by global companies, universities, the world’s top media outlets — and, most importantly, by millennials themselves. A New York Times bestselling author, Lindsey began her career as a dorm RA in college and has been mentoring millennials — and explaining them to other generations — ever since. Her keynote speeches have audiences so engaged that, in the words of one attendee, “I didn’t check my phone once!” Contact Lindsey to discuss a speaking engagement for your organization.