The famous gold watch is rapidly becoming a thing of the past for today’s employees. The average American worker changes jobs 12 times during his or her career, and some experts say employees should look to change jobs every three years. That’s driven by both sides of the employer-employee relationship, with employees job-hopping to find the proper fit and better compensation and employers getting quicker to jettison employees when productivity lags or the business climate changes.
According to the U.S. Bureau of Labor Statistics (BLS), Americans born between 1957 and 1964 held an average of 11.7 jobs between the ages of 18–48. Those numbers are even more pronounced for millennials, who change jobs an average of four times in their first decade out of college, twice the rate of Generation X.
What does this mean for today’s employers? Conventional wisdom holds that frequent turnover has a negative impact on morale, productivity and revenue, which makes sense. It costs time and money to onboard a new employee, from recruiting and interviewing to hiring and training.
Calculating the costs
According to the Society for Human Resource Management (SHRM), the average employer must spend the equivalent of six to nine months’ salary to find, hire and train a replacement for a departed employee. That percentage goes up for executive positions requiring high levels of education and experience. Costs are driven by factors both obvious and hidden, including:
Finding a replacement (advertising a position, interviews and screening)
Onboarding a new hire (paperwork and training)
Lost productivity as the new employee learns the new system
Decreased engagement from coworkers and the accompanying loss in productivity
Josh Bersin of Bersin by Deloitte refers to people as an “appreciating asset.” Longer-tenured employees have an advantage in knowledge of systems, products, business practices and how to deal with coworkers and management.
Benefits for employees…
But turnover doesn’t have to be a negative. Bringing in new blood can introduce necessary new perspectives and help an employer keep pace with best practices. Patty McCord, the former chief talent officer at Netflix, told Fast Company that employees build skills faster when changing companies because they constantly work outside their comfort zone. These job-hoppers know they have to hit the ground running at each employer and take steps to improve the bottom line, and do it quickly, because they’ll be looking for their next move in a couple of years.
Entrepreneur Penelope Trunk agrees that frequent job changes have become a solid career move — when those changes are made for the right reason. Switching jobs to increase engagement — in other words, to find something you enjoy doing — increases an employee’s odds of finding the right fit. Job-hoppers are more able to sustain engagement and passion for their work. And changing jobs frequently can help employees build a more diverse skill set and widen their professional networks.
Of course, financial factors are key for employees and employers alike, and research has shown that job switching increases employees’ lifetime earnings. Adjusted for inflation, the average employee raise in 2014 amounted to less than 1 percent. Moving to another company allows employees to start fresh and command a higher starting salary.
Employers can also find ways to leverage restless employees. An employee who has worked for a competitor brings knowledge and contacts from that company. And even if the new employee worked in a different industry, he or she can still offer a wide range of best practices that can be tweaked to work in his or her new field.
It's important to vet a job candidate effectively, and even more so for a candidate who has had several recent jobs. Success in multiple jobs indicates that a job seeker is an adaptable quick study who is adept at building relationships. At each new job, employees are forced to learn new skills, standards and best practices. Doing so successfully at multiple employers is a strong indicator of future success.
Striking a balance
While employers aren’t in control of their best employees’ choices, competitive benefit packages and well-conceived retention policies go a long way in building the ideal workforce. Periodic infusions of “new blood” can be just what employers need to increase employee engagement.
In other words, employers who make frequent job changes are here to stay, and they can bring significant benefits to your company. Don’t be too quick to write them off.