Millennial Branding and Beyond.com Survey Reveals the Rising Cost of Hiring Workers from the Millennial Generation
HR Professionals disclose the amount of money spent on training and replacing millennial employees; Numbers expected to dramatically increase in coming years
Boston, MA and King of Prussia, PA – August 6, 2013 – Millennial Branding, a Gen Y research and consulting firm, and Beyond.com, The Career Network focused on helping people grow and succeed professionally, today announced results from a comprehensive national survey entitled, “The Cost of Millennial Retention.” The survey, which included responses from hundreds of HR professionals in various industries, found that 87% of companies reported it costs between $15,000 and $25,000 to replace each millennial employee they lose. Considering that approximately 40% of companies currently employ 50 or more millennial workers, these costs are expected to rise dramatically over the years to come. With current data showing more than 60% of millennials leaving their company in less than three years, employers are facing a very expensive revolving door.
Projections show that by 2014 millennials will account for 36% of the American workforce. In 2025, that number balloons to 75% of the global workplace. Recent Millennial Branding reports show that 45% of companies experience high turnover with those employees identified as “millennials” – by a 2:1 margin versus older generations. Of those HR professionals surveyed by Millennial Branding and Beyond.com, the majority (79%) felt optimistic that they’ll be able to increase their millennial employee retention rate, with many citing they can’t afford not to.
Specific highlights from the report include:
1. Companies are losing their millennial talent. Of those surveyed, 30% of companies have lost 15% or more of their millennial employees in the past year. Where did they go? Most felt that at least 10% of the lost millennial employees went directly to their competitors.
2. How much it costs to retain millennial employees. According to respondents, 51% of companies report that the cost of training and development is the highest when hiring millennials. After that, “interviewing,” “job posting/advertising” and “on-boarding” were cited as being the next highest costs (in that order). In addition, 71% of companies reported that losing millennial employees increases the workload and stress of current employees. 56% of employers revealed that it takes between 3 and 7 weeks to hire a fully productive millennial in a new role.
3. Some companies already have retention programs in place. While the issue of employee retention is not widespread, some companies have programs in place to stop the migration from this generation. Those programs address such things as: “workplace flexibility” (48% of companies reporting), “mentoring programs” (40%) and “internal hiring” (37%). Only 10% of companies cite using “intra-preneurship” and community service programs to engage millennials.
4. Why millennials stay and leave. What is the main indicator of whether millennial workers stay at a company? According to the survey, the majority responded that it is whether there is a “good cultural fit.” The top reasons why millennials leave their companies are because they received a better offer from another company (30%), their career goals aren’t aligned to their company (27%) and a lack of career opportunities (13%).
5. What millennials get paid. Half of companies surveyed reported that the average salary for a millennial is between $30,000 and $50,000, while 15% of the companies revealed that the average salary for a millennial is $50,000 or greater.
6. How employers hire millennial workers. Of those HR Professionals surveyed, 62% use job boards and corporate websites to recruit millennials, with social networking sites trailing far behind. Only 9% of HR Professionals reported using LinkedIn, 3% for Facebook and a mere 1% cited Twitter as a resource for recruiting purposes.
7. The healthcare debate has almost no impact on the hiring of millennials. While healthcare remains an issue closely tied to job creation and growth, surprisingly only 14% HR Professionals reported that millennials inquire about healthcare benefits during the interview process. How important is it to employers? 30% of those companies surveyed said that the current healthcare debate factors into their hiring decisions, for employees of all ages.74% of companies responded that it did not matter if a millennial applicant is covered under their parents’ health insurance plan until the age of 26 (as is the current law), with only 9% citing that this would increase their employment chances.
