Episode 29
Episode summary
There’s a widespread belief that Millennials are fickle job-hoppers. And while that may be true, particularly early in their careers, data shows that they’ve been about as likely to change jobs as Baby Boomers were at the same age. Caleb and Liz discuss the trends, possible explanations, and what employers should think about when it comes to hiring and employee retention.
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Shownotes
National Longitudinal Surveys [BLS]
Boomers data: https://www.bls.gov/news.release/nlsoy.nr0.htm
Millennials data: https://www.bls.gov/news.release/nlsyth.nr0.htm
Job losers as % of total unemployed: https://fred.stlouisfed.org/series/LNS13023622
Transcript
Liz Wilke (00:00:31) – Hi, I’m Liz Wilke.
Caleb Newquist (00:00:35) – And I’m Caleb Newquist.
Liz Wilke (00:00:36) – And this is the Gustonomics Podcast. In each episode, we bring you a little bit of economics knowledge so you can be more informed, use the information in your business or work, or brush up on some nifty facts for those upcoming fancy spring parties.
Caleb Newquist (00:00:54) – Please remember to rate, review, and subscribe to the show, or share it with an economics curious friend. Anything you do to spread the word about the podcast is greatly appreciated. Hey, Liz.
Liz Wilke (00:01:05) – Hey, Caleb.
Caleb Newquist (00:01:06) – How’s it going?
Liz Wilke (00:01:07) – It’s good. Happy Friday.
Caleb Newquist (00:01:10) – Yeah. Yeah. We are recording on a Friday. And I think we’re going to have a kind of a freewheeling conversation today. And I will prompt you with this. How many jobs have you had in your life?
Liz Wilke (00:01:25) – Oh, gosh. Okay. So my first job, does under the table jobs count? Because babysitting when you’re 13.
Caleb Newquist (00:01:33) – Let’s say required a W-2.
Liz Wilke (00:01:35) – Okay. Well, I was a lifeguard. That was my first formal job. And then I waited tables at various restaurants. I think maybe three or four. So that brings me up to one, two, three.
Caleb Newquist (00:01:47) – Are we talking like casual dining or are we talking like Morton’s?
Liz Wilke (00:01:51) – We’re talking fried catfish and chicken fried steak. Yeah, I’m from Texas.
Caleb Newquist (00:01:55) – Nice. Yeah. I mean, there’s Morton’s in Texas, right?
Liz Wilke (00:01:59) – That’s true. But I was really confined to much more casual places.
Caleb Newquist (00:02:04) – That’s all right. Catfish and chicken fried steak sounds pretty great, though.
Liz Wilke (00:02:07) – I certainly enjoyed it.
Caleb Newquist (00:02:09) – Awesome.
Liz Wilke (00:02:10) – Okay. So that’s, I think, brings us up to four. And then I worked in a law firm before I went to graduate school. So that’s five. And then technically I was employed by my graduate school. So that’s six. And then seven, eight, nine. This is nine jobs for me. And actually, that puts me right smack in the middle of the typical elder millennial, which we’ll talk about in a minute.
Caleb Newquist (00:02:33) – Okay. Yeah. So let’s see. I will try to do mine. I had a paper route. I washed dishes in a steakhouse. Oh, I worked at McDonald’s very briefly. So that’s three. Then I worked in a sporting goods store. I worked at a beer wholesaler loading trucks. That was fun. I got to drive forklifts at that one.
Liz Wilke (00:02:58) – Like a teamster?
Caleb Newquist (00:03:00) – Yeah, but I wasn’t union. No. So that’s five. Oh, yeah. I was a line cook for a couple of years. So that’s six. I didn’t work in grad school. And then I got my first job after grad school, seven. Big fancy CPA firm. I was eight. And then I founded a website. And I got a W-2 for that. So that’s nine. I did that for a long time. I did that for almost 10 years. And then so gusto is 10.
Liz Wilke (00:03:33) – All right. That puts you about in the typical range, too.
Caleb Newquist (00:03:38) – For what it’s worth, I am not technically a millennial. I’m like that weird Gen X millennial. What do they call those people?
Liz Wilke (00:03:50) – I’m not really sure. You’re a younger.
Caleb Newquist (00:03:52) – X-ennials or something.
Liz Wilke (00:03:54) – You’re a fresh X-er?
Caleb Newquist (00:03:56) – Something.
Liz Wilke (00:03:57) – At any rate, it segues to our topic today. I wanted to talk about job tenure because I keep hearing over and over. It’s come up a number of times over the last few years. And I think anybody that’s ever had this conversation about how work is changing has heard somebody say, you used to get a job out of high school. And then you could work that job for 20 or 30 years and count on a nice pension at the end. Or some variation of that. You’d get out of college. And you’d start work. And then you could work for that employer for your whole career if you wanted to. And there is this associated idea that those are bygone days when that sort of job security and stability was there. And now we’re in sort of a wild new world where job security is very low. And people are hopping jobs one after the other, just looking for the next thing. And that there is no commitment at all.
Caleb Newquist (00:05:01) – Right.
Liz Wilke (00:05:01) – And of course, I said to myself, well, is that true? Right? Or are we just looking at the past with rose-colored glasses and thinking about how nice it used to be?
Caleb Newquist (00:05:10) – Or is it just nostalgic BS, Liz?
Liz Wilke (00:05:14) – Yeah, that’s really at the heart of the question.
Caleb Newquist (00:05:17) – Full disclosure, my dad has been a telecommunications worker since he graduated high school, and he has a pension. He doesn’t grouse about that these days, but he is kind of the archetype of what you’re describing. Versus you and I, who have had nine and 10 jobs in the first half of our careers, essentially, or half of our lives.
Liz Wilke (00:05:40) – Yeah. Well, I will also say in the interest of disclosure, my father also has got his first job, I think, out of college and has been an engineer at the same company for also the remainder of his working life. He’s now retired, but he also had a 40-year career and a pension at the end of it. But what I will say is that the data that we have on employment over the course of most people’s lives suggests that my father and your father are an exception, not a rule for most people.
Caleb Newquist (00:06:13) – Right. Right.
Liz Wilke (00:06:14) – So what I will introduce, I’m going to take a geek moment here and introduce a survey, actually two surveys. They’re called the National Longitudinal Survey of Youth. So there are two surveys. One tracks boomers, baby boomers over time, and one tracks millennials over time. So in the United States, the same people get interviewed every single year by the Bureau of Labor Statistics. And they ask questions, have you had a job? Are you married? Did you get education? Did you get extra training? How do you feel about your lives? Tons of really, really rich information. So if any of you are wondering where these statistics come from, the vast majority of them come from analyses that have been done on these very rich surveys that have been run in the U.S. over decades, right, tracking people’s lives. So when they survey everybody every year, they say, do you have, did you work in the last week? Who did you work for last? Right. So they can track employment over the course of somebody’s life. And by that we can measure, right, how many jobs a person has actually had. So recently, I think in 2023, then when millennials, when the oldest millennials turned 36, 37-ish, right, they did this analysis sort of looking at job transitions for millennials over the sort of first part of their working life. And millennials have had an average of nine jobs between the ages of 18 and 36. Baby boomers, their time frame is a lot longer.
Liz Wilke (00:07:53) – They’ve actually had 12.7 jobs between the ages of 18 and 56, which is how old, you know, the youngest boomers are at this point. So it’s not a direct comparison, right, but you think about, you know, baby boomers, you know, having this arrangement where they have one job or maybe two jobs, maybe even three jobs for their whole life. And that’s sort of most of it. But the average number of jobs is 12.7, right, over the course of a baby boomer’s whole working life. And that’s a much larger number, honestly, than I expected, given all this sort of anecdote that I’ve heard about people, you know, just being in a job for a very long time.
Caleb Newquist (00:08:35) – So here’s a question. Was there any, did they break the data even further? So like between men and women or geography or anything like that, though, you found interesting?
Liz Wilke (00:08:46) – Yeah, I think the real comparisons are sort of looking at millennials when they were 18 to 24 year olds versus baby boomers when they were 18 to 24 year olds, right, to really get an apples to apples comparisons. Between the ages of 18 and 23, millennials had a, on average 5.1 jobs.
Caleb Newquist (00:09:05) – OK.
Liz Wilke (00:09:07) – Boomers, between the ages of 18 and 24, had an average of 5.6 jobs. Actually, about 10% more jobs than the Millennials did in the same age range.
Caleb Newquist (00:09:19) – Or put another way, Boomers actually job hopped more than Millennials at the same age.
Liz Wilke (00:09:27) – Yeah, yeah, that’s right. And what’s actually really interesting is the typical Millennial has held nine jobs by the time they reach the end of their 36th year. And the typical Boomer actually has held 10 jobs by the time they were 37. And so they actually have 10% more job hopping than Millennials at the same age, which I thought was really interesting. It sort of seems to fly in the face of this wisdom that we have anecdotally, that people are getting less and less attached to their jobs. But that doesn’t seem to be true. And when you just look at the number of jobs you have over the course of your career, what is definitely true is that younger people job hop a lot more than older people. But they seem to do that in every generation.
Caleb Newquist (00:10:13) – Right, so I was just about to ask, there is kind of a natural ebb and flow to people’s careers in terms of when they’re younger, those are the years when people are trying to figure out what they’re doing with their lives, I guess. And then beyond that, it changes quite a bit, right?
Liz Wilke (00:10:33) – Yeah, so whichever generation you’re in, there is this relationship between your age and the number of jobs that you have. So the people with the longest tenure at their job are by far the people who are 55 and up, right? And especially 65 and up. That’s due to two things. One is, if you’ve worked longer, you can be at a place longer. Nobody who’s 20 can actually have worked at a place for 10 years unless they’re breaking some really serious child labor laws. But people who are 56 or 57 can definitely have been working somewhere for 20 years. So some of that is just math. But what also seems to be true is that at the beginning of your career, you have fewer marketable skills, right? You don’t also know exactly what you’re good at. And so both of those things together can cause a little more job hopping when you’re younger. You can fit into a wide variety of jobs. Maybe you’re a front desk person. Maybe you’re a wait server. Maybe you are a dock loader. Maybe you’re something else, right? And then as you get more education and specialization through experience or what have you, then you sort of move up the, quote unquote, value chain of work. So you find jobs that are more suitable for you, that pay a little bit better, that are more suitable for your skills. And then you tend to stay at those jobs longer. And that continually happens over the course of your whole career as you get longer for most people. And that’s true in every generation it looks like.
Caleb Newquist (00:12:10) – Right. So and that makes sense. Being the age that I am, my time at Gusto isn’t the longest tenure that I’ve had. But it’s second longest. And so it is shaping up just as basically as you’ve described. Let me ask you this. And we didn’t really touch on this earlier. There is kind of a stigma with job hopping. It’s like, oh, why has this person had six jobs in seven years or something like that? And maybe those things are unusual. But also, maybe they’re not.
Caleb Newquist (00:12:38) – That’s kind of what our snap judgment goes to is like, oh, that’s odd that someone would change jobs so frequently. But it turns out, on average, changing jobs regularly is relatively normal.
Liz Wilke (00:12:51) – Well, actually, I think it depends on who you are. OK. So a millennial, for instance, between the ages of 30 and 36 only changes jobs on average 2 and 1 half times. OK. So if you’re a millennial aged 30 to 36 and you’ve changed jobs six or seven times in that period, you look pretty abnormal relative to your peers in that cohort. Versus if you’re an 18 to 24-year-old and you’ve changed jobs six times in the last seven years, you look a lot more in line with the people that are like you in the labor market.
Liz Wilke (00:13:24) – And so I actually think that employers take this into account. And they probably look at a job-hopping 18 to 22-year-old and don’t think so much of it. And they probably look at a job-hopping 40 to 45-year-old and think, this person might not have the staying power or might not be the kind of employee that I expect and want because I think people do know that older workers tend to be a bit stickier and more stable in their jobs. So in fact, I think it’s possibly even a bigger signal to a potential employer.
Liz Wilke (00:13:56) – When an older worker is job-hopping more than a younger worker.
Caleb Newquist (00:13:59) –
Caleb Newquist (00:14:00) – Okay, so younger job hoppers, nothing necessarily to be alarmed about. This is kind of the natural order of things. As they age, however, you would hopefully expect to see slightly less job hopping. And then when you hit middle age, they’ve spent that time finding the right fit, and they’re not going to move. They’re not going to change jobs unless something relatively big is going on.
Liz Wilke (00:14:26) – I am going to cautiously say that is typically true. And I want to put a big asterisk around typically, right? When you are averaging across hundreds of millions of people, you are compressing a lot of individual experience into a single number. These are trends and tendencies for a whole group. I don’t want to be really careful about saying that that’s how everybody is in these groups, because that’s definitely not true. We’re actually flattening the experience of a whole bunch of people into a single number when we talk about these numbers.
Caleb Newquist (00:15:01) – Fair enough. Okay. Let me ask you this, for small businesses especially, finding employees is tough all the time. It’s been especially tough the last few years considering this topic of job tenure. Do you have any advice for small businesses when it comes to attracting and retaining their workforce?
Liz Wilke (00:15:28) – I have a couple of thoughts. I think the first thought, and I’m going to backtrack just a little bit to a more general conversation. I think the conversation about commitment gets really tied up with the conversation about how long you stay at a job, right? Again, anecdotally, we’ve heard a lot about Generation Z really wanting what you might even call a more transactional approach to employment. They want to come. They want to do their work. They certainly want things out of that experience. They want to learn. They want to grow.
Liz Wilke (00:15:59) – They want to advance professionally, but they don’t have a deep level of commitment. That has been lamented by many people because they think that Gen Zers ought to be more committed to their employers. Whether true or not, a person’s level of commitment overall doesn’t seem to have too much bearing in the aggregate on whether or not they’ll stay with a job. But I think that for employers, sort of taking that to the individual level, employers thinking not so much how do I make this person more committed, which is a sort of personal factor, and you can do things to encourage engagement, but really turning the question is how do I think about how long this person will stay based on what I think I know about them? I think it’s pretty normal for workers to stick around for maybe two to four years and then leave, right? Our data sort of shows that even well into your late 20s, maybe even your early 30s. This idea that we have that we’ll just hire the right people and they’ll stay for six or seven or 10 or 12 years, it’s not an accurate view in most cases about how long people will stay. Thinking about resetting some of those expectations and then thinking about how can I get enough out of a person in two to three years if that’s the timeline that I can reasonably expect them to be here. No matter how good a job I do, creating a good experience for them I think is also something to really take into account.
Caleb Newquist (00:17:39) – So if job tenure at age ranges is roughly the same, has job security also remained the same? If the nostalgic BS that we kind of covered at the front of this is that, oh, you get a job and you stay in that job because you have job security and you can stay in the same job for 30 to 40 years, if that’s the exception rather than the rule, how does that factor into job security? Where’s job security kind of fall in terms of the current workforce?
Liz Wilke (00:18:09) – Yeah. So the answer in the economics literature is that we don’t actually know what the landscape is for job security relative to 30 or 40 or 50 years ago. I can give you 10 studies that show that job security hasn’t changed at all or by some measures has even gotten better. And I can give you 10 equivalently good studies that show that job security has declined. And I
Liz Wilke (00:18:37) – I think that stems from a couple of things. And the first one is that it’s very difficult to come up with a measure of job security. It’s this concept that everybody gets, but how you define it really matters for how it gets measured and whether or not that measure is going up or down. So I could think about job security as being how likely am I to get laid off versus because I quit or I wanted to leave.
Liz Wilke (00:19:04) – Or I could think how likely am I to be fired, which you might think of as being a job security measure, but then somebody could argue, well, if you got fired, you probably got fired for doing something you weren’t supposed to be doing. So it’s not a job security issue to be fired for cause. But some people disagree with that, right? Or is job security the latent risk, the underlying fear or concern that workers have that they could be let go? Whether or not they actually are, right? That’s a job security issue that people have tried to measure too.
Caleb Newquist (00:19:39) – That seems awfully squishy.
Liz Wilke (00:19:41) – It’s awfully squishy.
Caleb Newquist (00:19:42) – Yeah, because you’re just like, how are you feeling today? It’s like, I could be fired at any moment. Like, even I go through those things where you’re just like, is this it? Like, what’s this about? Like, what’s going on? And then there’s days like, oh, I’m never leaving this place. They’ll never get rid of me. You know?
Liz Wilke (00:19:55) – Yeah.
Caleb Newquist (00:19:55) – Like, it feels like a very fluid thing.
Liz Wilke (00:19:58) – Job security is a very difficult thing to measure. I don’t want to discount the fact that lots of people feel more precarious in their work, right? However, I cannot back that up with a definitive answer about whether or not job security as a whole is going down. What I’m sure is probably true, just because of how many people are in the United States, is that job security could very well be going up for some people and going down for other people by whatever metric you want to use.
Caleb Newquist (00:20:33) – Sure. Yeah. OK, so Liz, any final takeaways for the employers out there when they’re thinking about young people, mid-career people, late-stage career people? How do we think about whether they stay a long time or whether they don’t stay a long time? Like, what’s kind of your final thoughts on this?
Liz Wilke (00:20:50) – Well, first, I think having this data is really potentially useful for workforce planning. You know the age composition of your workforce if you’re a small business. And again, everybody’s different, but should give you some rough idea about how often you can expect to go back to the labor market or the talent pool to find a new person to replace the person that you’ve got who might leave, depending on sort of their age and circumstances.
Liz Wilke (00:21:16) – I think the second thing is, as you’re thinking about bringing people in, think about what is a reasonable amount of time to expect someone to come to this business, learn something new, grow as a person and as a professional, and then outgrow what it is you have to offer. So for the vast majority of people’s careers, they’re looking to grow and advance and develop. Maybe not even in a very aggressive way, but everybody, nobody wants to be stuck, right?
Caleb Newquist (00:21:48) – Right.
Liz Wilke (00:21:49) – And I think for employers, instead of prioritizing sort of retention forever, trying to prioritize retention longer than typical is maybe a better metric to think about how long is a success for retention and what you can offer somebody in order to achieve that.
Caleb Newquist (00:22:10) – That’s it for this episode. We hope you learned something new and useful for yourself, for your business. Please let us know what you think about the podcast by leaving a review or sharing it with a friend or colleague who might enjoy it. I’m Caleb Newquist. I’m Liz Wilke.
Liz Wilke (00:22:25) – Thanks for listening.
