Employee turnover is a significant issue facing organizations today. When employees leave, it can be costly for companies in terms of recruitment, training, and loss of organizational knowledge. Understanding which generations are most likely to quit can help employers develop better retention strategies. In this article, we will examine the data on quit rates by generation and explore some of the potential reasons behind the trends.
Overview of Generations in the Workforce
First, let’s define the major generations currently employed:
Baby Boomers: Born 1946-1964. The oldest Boomers are now in their mid-70s and many have retired, but some continue working past traditional retirement age. Known for their strong work ethic and loyalty to employers.
Generation X: Born 1965-1980. Gen Xers are currently ages 45-60. The first generation to grow up with both parents working outside the home. Known for their independence and entrepreneurial spirit.
Millennials: Born 1981-1996. Currently ages 28-43. The first generation to come of age in the digital era. Known for a desire for meaningful work and work-life balance.
Generation Z: Born 1997-2012. Currently ages 12-26. The first true digital natives, born into a fully tech-integrated world. Known for social consciousness and desire for security and stability.
Quit Rates Over Time
The Bureau of Labor Statistics tracks quit rates as part of its Job Openings and Labor Turnover Survey (JOLTS). The quit rate calculates the number of quits during the month as a percent of total employment.
Looking at the overall national monthly quit rate over the past 20+ years, some interesting trends emerge:
| Year | Monthly Quit Rate |
|---|---|
| 2000 | 2.4% |
| 2005 | 2.1% |
| 2010 | 1.6% |
| 2015 | 1.9% |
| 2019 | 2.3% |
| 2022 | 2.8% |
A few things stand out from this historical data:
– The monthly quit rate was over 2.4% back in 2000 during the dotcom boom. It declined after the 2001 recession and hit a low of 1.6% in 2010 in the aftermath of the Great Recession.
– The rate started increasing in 2015 as the economy recovered and has continued trending upwards, hitting a 20-year high of 2.8% in 2022.
– Economists consider a rising quit rate to be a sign of a strong economy. Workers are more confident in their ability to find new jobs, leading to increased voluntary resignations.
Quit Rates by Generation
More recently, we can look at BLS data on quit rates by age group to get a sense of differences across generations:
| Age Group | Quit Rate (2022) |
|---|---|
| 16-24 years | 5.9% |
| 25-34 years | 4.1% |
| 35-44 years | 3.1% |
| 45-54 years | 2.8% |
| 55-64 years | 2.5% |
| 65+ years | 1.7% |
This data shows a clear downward trend in quit rates as age increases. A few key takeaways:
– Generation Z (ages 16-24) has by far the highest quit rate at 5.9%. This is more than 3X the rate for workers 65+.
– Millennials (ages 25-44) also quit at relatively high rates of 4.1% and 3.1%.
– Baby Boomers (ages 55-64) and the Silent Generation (65+) have the lowest quit rates.
Why Do Younger Generations Quit More?
There are likely several reasons why Gen Z and Millennials switch jobs more frequently:
– Lack of loyalty: Younger workers are less likely to feel loyalty toward employers and see changing jobs as a natural career progression. Older generations tended to view frequent job changes more negatively.
– Career growth: Young workers today are focused on rapid skill-building early in their careers. Switching employers can provide greater opportunities for advancement and higher compensation.
– Entrepreneurial tendencies: Millennials and Gen Zers are more likely to view themselves as “free agents” and value independence over job security. Many start their own businesses or side-hustles.
– Work-life balance: Younger generations put a high priority on work-life integration. If a job becomes too demanding, they will be quick to find a better opportunity.
– Higher expectations: Younger workers have grown up being told they can “follow their dreams.” If a job does not meet expectations, they are more willing to quit and find one that does.
Industry Variations
While younger workers quit at higher overall rates, there are also significant differences by industry and job type.
For example, in 2022 the quit rate in the hospitality industry was nearly 6% compared to under 2% for federal government workers. Jobs requiring less education and training tend to have much higher turnover.
Looking just at Millennials, here are a few industries with particularly high quit rates:
| Industry | Millennial Quit Rate |
|---|---|
| Retail | 5.3% |
| Food and Accommodation | 5.8% |
| Transportation | 4.2% |
| Healthcare | 3.5% |
| Finance | 2.3% |
Jobs in healthcare, tech, and finance tend to have lower turnover among Millennial workers, likely due to higher compensation, engagement, and advancement potential.
Turnover Costs
While some employee turnover is inevitable and potentially beneficial, excessive quit rates can impose major costs on employers. Costs to replace an employee are estimated to be anywhere from 50-200% of the former employee’s salary.
For customer-facing roles, the costs of turnover extend beyond just recruitment and training. Lost productivity, lack of continuity for customers, and decline in service quality all take a toll on the bottom line.
Reducing turnover has become a pressing need for employers. Retaining top talent and keeping employees engaged are key priorities, especially as unemployment remains low and competition for workers is fierce.
Improving Retention Strategies
To reduce turnover, particularly among younger employees, companies should focus on:
Providing Development Opportunities
– Offer formal training programs, mentorships, and stretch assignments
– Provide clarity on advancement paths and career trajectories
– Invest in developing managers’ coaching and feedback skills
Building an Engaging Culture
– Encourage open communication, collaboration, and autonomy
– Recognize contributions and celebrate wins of all sizes
– Promote diversity, inclusion, and social consciousness
Offering Competitive Compensation
– Benchmark pay and ensure wages match market rates
– Consider student loan and tuition assistance benefits
– Offer flexibility like remote work options when possible
Supporting Work-Life Balance
– Provide generous vacation time and encourage employees to use it
– Offer flexible scheduling around demands outside work
– Discourage excessive overtime and unsustainable workloads
Conclusion
In today’s labor market, Generation Z and Millennial workers have much higher quit rates compared to older generations. Their relative lack of loyalty, focus on rapid career growth, entrepreneurial tendencies, and work-life priorities make them more willing to leave jobs that are not meeting their expectations.
While some turnover will always occur, excessive quit rates can impose heavy costs on employers. Organizations that invest in engaging, developing, and supporting younger workers will be better positioned to attract and retain top talent within these generations. With the right retention strategies, companies can build a thriving multi-generational workforce for the future.
