By: Kerry Hannon
Quitting was long in vogue before the Great Resignation. It wasn’t just the pandemic that led workers to switch.
In the last decade between 2012 and 2022, the median job tenure has dropped nearly 11% from 4.6 years to 4.1 years, according to the latest LendingTree study, which analyzed US Bureau of Labor Statistics (BLS) data.
The biggest dip in job tenure was for workers between 25 and 34, which fell 12.5% from 3.3 years to 2.8 years. Tenure for those 35 to 44 dropped from 5.3 years to 4.7 years. For those in the 45 to 54 cohort, it slid from 7.8 years to 6.9 years; 55 to 64 year olds left after 9.8 years, down from 10.3 years, and tenure for those 65 and older slipped the slightest (3.9%) from 10.3 years to 9.9 years.
"Shorter job tenures don’t necessarily mean that all people hate their jobs and are itching to leave them as soon as possible, but it does suggest that employees might be a bit more willing to seek greener pastures, or otherwise try something new, than they once were," Lending Tree senior economist Jacob Channel told Yahoo Finance.
"And that’s not a bad thing. There’s absolutely nothing wrong with seeking a new employer who will pay you more money or otherwise treat you better."
That trend is likely to continue, as workers continue to quit in bigger waves than in the past to score better opportunities as employers face labor shortages stemming in part from an aging population.
And there are plenty of jobs out there for them to go to. There are now roughly two jobs (1.8) open for every unemployed worker, more than any other point before the pandemic, according to the latest BLS report.
What drives workers out
The main reasons workers say they jump ship for a new job: a company’s shaky business outlook, the perception of unfair pay, a snarky workplace culture, and bad manager relationships, according to Payscale’s Retention Report.
Payscale analyzed 578,141 US worker salary profiles that were conducted between March 2018 and March 2023.
"In a troubled economy, employees are naturally more anxious about the health of the company they’re working for and are more likely to look for a new job if they anticipate layoffs are coming, or feel their pay is unfair, especially if they are taking on more responsibility in a reduced workforce," Lexi Clarke, Payscale's chief people officer, told Yahoo Finance.
"While employees are a bit less likely to leave their jobs now than during the Great Resignation, there is an uptick in demands from employees, and companies must directly address what they can do in order to retain them," she added.
The biggest factor impacting someone’s decision to send out resumes is the fear of getting laid off, according to the findings. Workers who felt that their employer’s business prospects were on solid ground, and there was a low likelihood that they may get cut in a layoff, said it decreased their desire to job seek by more than a third (39%), according to Payscale’s research.
Show me the money, honey
Even so, pay remains critical when it comes to retaining workers. When employees feel they’re paid fairly, the urge to leave drops by 27%.
And that brings us to the thorny issue of pay transparency. For millennials, an increase in pay transparency results in a 32% dip in the odds they will go looking for a new job. For Gen X, that translates to 28% and boomers are 21% less likely to hit the exits — perhaps because both generations are nearing retirement and less likely to change jobs over pay alone.
For Generation Z, workers under age 24, however, when a position’s pay is revealed publicly, the reaction is quite the opposite. Pay transparency is associated with a 3% increase in job-seeking, according to the report.
"While pay transparency has a positive impact on retention overall, it may trigger turnover for Generation Z," Clarke said. "This is because entry-level workers are more likely to be paid less and not understand why. When they notice job listings that show higher pay ranges offered to more senior colleagues, or the salary bands other companies are offering to their peers, seeking a new job can be enticing."
It follows that pay transparency is intrinsically linked to fair pay, Clarke added. "If the salary bands you’ve posted for new job openings aren’t comparable with what your current employees in similar roles are making, you can expect a cycle of discontent and turnover."
Finally, a positive relationship with one’s manager and overall good vibe in a company’s culture go a long way to staving off the motive to take a job and shove it. Those factors lowered the urge to leave by 21% and 22% respectively.
"When employers don't show employees that they respect the work they’re putting in and are actively listening and responding to their feedback, employees aren't going to be engaged and are definitely more likely to be out looking for a new job," Clarke said. "Employers really need to be thinking about the whole employee experience."