As employees opt to change jobs more often, organizations need to face reality. Here’s how leaders can rethink their talent strategies.
When we talk with leaders about the talent trends affecting their organizations, challenges with retention are always near the top of the list.
In the US, the median tenure for employees has dropped to 3.9 years, with younger employees changing jobs more often than older ones. Other countries show longer stays – in South Korea, the average is 5.9 years; in Italy, it’s 12.2 years – but globally, the trajectory is clear. Frequent movement is the new normal.
What leaders also recognize is that this trend is particularly pronounced among Gen Z. Younger employees job hop more often than those with more experience: in the US, Gen Z move jobs every 2.8 years on average, compared with 9.8 years for Gen X.
So, should leaders regard Gen Z employees as fundamentally disloyal? And how should they respond to a shifting labor market? Consider these three strategies.
1. Push against the trend
The first option is to seek to buck the trend. Some leaders ask, “Why not hire older, more stable talent?” or “Can we deter movement with non-compete clauses?”
However, there are significant limitations on both these options. Hiring only those who are less likely to leave shrinks an already tight talent pool – whether that is based on age or other factors. Women, for example, move more often than men (3.6 years in role versus 4.2). It might get you into legal trouble, too. As for non-compete clauses, they rarely stick – and besides, companies increasingly lose talent not to the competition, but to alternative employment models. Many employees leave traditional jobs in favor of freelancing, entrepreneurship, and portfolio work.
To buck the trend, you may need to create your own market – by, for example, moving operations to areas where demographic mobility is low and you’re a preferred employer. But, unless you are lucky and plans are already underway, don’t bet on this working. Instead, consider virtual and non-synchronous work, which can yield unexpected benefits: access to more highly skilled labor, wage differentials stemming from currency or tax variations, and broader workforce diversity. All of this contributes to the ‘experience dividend’ that comes with greater stability.
2. Double down on retention
Where pushing back against the trend is about changing the market – contracts, players, or location – the second option for employers focuses on influencing your people. The core idea is to overinvest in keeping employees in the company. If they are productive, happy and learning, why would they jump on the job-hopping bandwagon?
Your first question may be: is it a matter of paying people more? Well, that can help. P&L permitting, you can pay above the market to put golden handcuffs on your employees. You can even throw in retention bonuses or anniversary gifts. But such steps are costly, underappreciated and easily matched by a new employer. Money is important, but it is often not the real problem. In reality, the reason people leave is more likely to be dissatisfaction with career development, leadership and management, company culture, engagement at work or work-life balance, not just compensation and benefits.
To assess where you may need to focus, think about all six of those factors and rate their strength at your organization on a 1-5 scale, where 1 = poor, and 5 = best in class. What do the results tell you? Which areas of improvement should you prioritize to convince those contemplating a move that their best option is to stay?
The good news is that improving in these areas is a good idea no matter what. Fail to optimize across any of them, and the business will struggle to orchestrate execution and maintain a positive external reputation. As CEB research has shown, the drivers of attraction and retention are the same as the drivers of attrition. Employees join because they are promised respect, growth, career opportunities and autonomy – and they leave because they lack respect, growth, career opportunities and autonomy.
Remember that it takes hard work to build systems that deliver a healthy, high-performance culture, competent bosses, meaningful work, and engaged employees who feel in control of their careers. It can’t be delivered in a year or two.
So in the short term, what may be required is to combine longer-term work on retention with a more novel approach: teaching employees how to make good career decisions. Career management skills won’t prevent all departures, but they can help ensure that those employees who do eventually leave understand – and fully leverage – the advantages of continuity. Those include everything from greater role effectiveness and access to service-related benefits, to reducing exposure to transition risks and disruptions. Educated career decisions serve employers and employees alike.
3. Embrace the new career models
The third option is acceptance. If short tenures are the new normal, embrace that fact.
Ultimately, organizations will need to adapt to this new reality. Employees have already worked out that they have options. For organizations, embracing these new career models means making a systemic effort to align the approach to managing the employee life cycle with the new reality of shorter tenures.
Let us give you an example of when a career model was fundamentally changed in earlier decades. In the 1980s, the system of lifelong corporate employment was phased out. That changed how the relationship between the employer and employees was seen, resulting in a series of structural, policy and process changes. Pension schemes shifted from a guaranteed payout (the company’s responsibility) to defined contributions (employees assume the risk). Solutions for ensuring employees’ security and safety gave way to a focus on cost efficiency, outsourcing, and offshoring. Back then, organizations told their employees: “The responsibility for your career is now your own. Make your own choices.” Today, employees are doing exactly what they were told. We shouldn’t be surprised.
Today, another fundamental shift is under way in how we view the relationship between employer and employees. By embracing the trend and adapting, companies have a better chance of keeping pace with the external context – and leading the way with forward-looking, win-win approaches. But how?
Turning ‘disloyalty’ into advantage
First, your solution must be unique to you. The trend for shorter tenures affects different companies in different ways. Try articulating the “why” for implementing a new approach: if the argument is fuzzy and unconvincing, your time may be better spent elsewhere.
But if the why is clear and compelling, then step two is to start garnering support. Socialize your ideas with all the key stakeholders. Expect resistance. You are asking them to update their mental operating system, which requires budget, time and help. Pushback is normal: most of us think about work relationships as they have been since the 1980s, or even earlier. Leaders might try to discredit your case by providing anecdotal evidence (“I did everything right, and she still left!”), claim validity of their personal philosophies (“It’s always worked for me”), or ascribe the problem to failures in HR processes (“You hire the wrong people”). Be prepared and be patient. It’s not just installing an app – it’s upgrading the device to a new version.
Third, once approval has been obtained, plan execution. Create and socialize the governance structure, budget and plans for project management, change management, training and communication. As a best practice, at the beginning of the process, hold a design thinking session to strengthen connections and network, to align on the business case, philosophy and approach, and to define project leadership, measures, constraints and risks. Here, leaders should scrutinize existing processes, identify and prioritize improvement ideas, agree on roles and responsibilities, and agree ways of working for implementation across all the employee processes. Consider these potential ways of adjusting to new career models.
Employee value proposition Adjust to the idea of being a great place to work for all, whether someone joins for a month or for a career.
Hiring Reduce the importance of job-hopping as a red flag in hiring decisions; optimize onboarding processes to minimize time to full performance.
Talent management Strengthen your talent assessment capability so you hold accurate data on new hires’ potential, and minimize the use of “not rated” designations. Explore AI-powered solutions to improve your ability to gauge potential at the point of hiring. Remove role permanency requirements for internal moves. (With an average tenure of 3.9 years, saying “You must stay three years in this role before applying for another” is a sure way to direct that application externally.)
Performance management Eliminate the practice of assigning the lowest performance rating to the newest team member (“beginner’s miss”). Increase the frequency of feedback so that newcomers benefit can develop and grow faster.
Learning and development Improve the scalability of learning solutions to maximize the reach to all employees. (If people leave earlier, companies must extract value quicker, which requires provision and acceleration of core career management drivers – such as designing a career plan, doing great work, or being a rewarding colleague and a positive networker.)
Compensation and benefits Review the current total rewards offering to identify opportunities to rebalance the attractiveness of its short-term and long-term elements.
Organizational effectiveness Nurture relationships with former employees. Companies such as McKinsey, LinkedIn, and LVMH run alumni communities: they know that the decision to leave does not equal disloyalty. (Researchers at Cornell have shown that hiring “boomerangs” is a good strategy: if people are going to leave more often, it may be wise to be ready to welcome them back more often, too.) Instead of pouring all of your resources into exit interviews, direct some energy to alumni management. Treat ex-employees – especially strong performers – as a valuable talent pool that you continuously engage. Remove the stigma of job-hopping for returning team members, allowing them to develop elsewhere and return when the right role arises.
These actions are merely examples. In reality, there will be many more potential solutions: leaders need to prioritize according to their impact and ease of implementation.
When you have clear plans, it’s time to implement and communicate. Adapting to new career models is a fantastic opportunity to reinvigorate the organization’s approach to several topics dear to employees, including career advancement, personal development, and autonomy. Yet great initiatives regularly fail because employees are unfamiliar or misinformed, resulting in resistance or sabotage.
Ask colleagues with expertise in marketing and change leadership for ideas on putting the employee in the center. Be transparent to regain trust in the organization’s commitment to the success of its employees, candidates, alumni and partners. Creating a unique brand identity for this initiative is a smart move, too: it reframes the work so people see it not as a dreaded HR process initiative, but as a strategic investment in peoples’ career success.
The new model
Companies can try to shield themselves from rapid turnover or sweeten deals to keep people longer – but those tactics will only go so far. The smarter move is to meet employees where they are.
Embrace shorter tenures and shape a model that turns frequent movement into a strategic advantage. The companies that adapt will attract the best talent on any timeline, and build a more resilient, future-ready organization.
Your options are to push against the trend, fight harder to retain, or embrace reality. The right path depends on your unique context, but the opportunity to evolve is undeniable.
Sergey Gorbatov is a talent management consultant and adjunct professor at IE Business School in Madrid, Spain. Angela Lane is vice president, talent, at AbbVie in Chicago, Illinois
Disclaimer: the opinions expressed are those of the authors and not those of affiliated organizations
