Tuesday, August 27, 2019

Are Millennials More Prone to Job Hopping than Previous Generations?

While on vacation, my father (a baby boomer) was lamenting about how millennials are so much more “flaky” as employees, constantly jumping from one job to another. This was the classic “millennials are job hoppers” myth that has become widespread. But is it true? Are millennials likely to job hop more frequently than previous generations? For some clarification, the Pew Research Center defines generations based on the below following age groupings. The oldest Millennials are on the door step of 40.

Perhaps the stereotype comes from comparing millennials today to older generations today. In other words, comparing the job stability of 22 to 34 year olds versus those in their 40s and 50s. Looking at the current Oregon snapshot from 2018 we see that the employment churn rate for millennials, younger workers from their mid-20s to late 30s, is higher than among older workers. And, the youngest cohort of workers, Gen Z (or I Gen), posted an even higher rate of churn than millennials. Millennials’ churn rate was roughly 11 percent in 2018. This means that roughly 10 percent to 15 percent of stable jobs held by millennials end in a given quarter. The employment churn rate is around 8 percent for Gen X and even slightly lower for most boomers.

We would expect these more established workers to have a much lower churn rate regardless of any generational differences. Inversely, we would expect young workers, those beginning a career, working part-time while attending school, or starting a family, to have a higher rate of employment churn. A more fair, apples-to-apples, comparison would be to compare the churn rate of current millennials to the churn rate of Gen X and Boomer workers when they were the same age.
It turns out that if we compare Boomers and Gen X workers when they were in their late 20s and 30s to the current crop (i.e., today’s millennials) we see that the churn rate is nearly identical. Millennials are not leaving stable jobs at a faster pace than their parents when they were at the same age. In fact, for several years the older millennials posted notably lower churn rates than previous generations. This was likely the impact of the most recent recession. Typically, churn rates accelerate during economic expansions when labor demand is high and the supply is relatively low. The most recent recession was so severe that younger workers did not have the luxury of job hopping since there were relatively few jobs to hop into.Next time a Gen Xer or Boomer complains about millennials being discontent and constantly jumping from one job to another, remind them that they likely did the same thing when they were younger.

Read Regional Economist Damon Runberg's full article here

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