Traditional HR wisdom taught us that employee attrition rate is a critical KPI in measuring the health of an organisation. However, recent research shows that employees are spending less time in a job than ever before. The United States’ Labor Department estimates the average tenure of a millennial employee to be about 3.2 years1.
Where the previous generation was content to rise slowly and steadily through the ranks—with promotions being doled out judiciously—millennials demand a lot more.
‘Stay hungry, stay foolish’
That seems to be the mantra of millennials and Gen-Zers, who no longer regard their jobs as being the means to a better life, but also the ticket to personal fulfilment. Some organisations have responded to the millennials’ ongoing quest by promoting them with fancy titles and higher designations. However, a meteoric rise through the ranks is not really what millennials seek.
As Josh Bersin, a prominent industry analyst and thought leader puts it, for the millennial, “The learning curve is the earning curve.”2 In short, millennials seek companies that can provide more responsibilities and increase their opportunities for growth and learning.
In the absence of such opportunities, it is not attrition itself that the organization needs to counter, but disengagement. A recent Gallup poll showed that 85% of employees were not engaged or actively disengaged from their work3. It can be inferred that these people are not actively contributing to the business and are possibly taking more away from the company than they are giving to it.
Managing the changing workforce
Most companies respond to recent changes by scaling up their employee retention strategies. But do they really work? And does increased employee retention translate to increased engagement, which in fact, is what the organization really needs?
The Deloitte Review4 lists growth opportunity as one of the five key elements that make an organization ‘irresistible’. It not only helps boost engagement but has been seen to help lower the employee attrition rate.
But is it practical for your company to promise such opportunities to every employee? And will such investments boost your bottom line?
The realistic way to managing the changing workforce is perhaps to accept the change and look for alternate strategies. The growing gig economy offers companies the opportunity to tap into a highly experienced and engaged workforce. In fact, several studies point out that blended workforces will be the norm in the future.
Freelancers and gig workers are often motivated to perform at much higher levels of performance than their in-house counterparts for two obvious reasons. One, their performance directly impacts repeat orders, references and ultimately, their incomes. Two, freelancers tend to approach their new jobs with a sense of eagerness and enthusiasm that old-timers may lack. This can positively impact your business and take it in new directions.
Blended workforces are a great solution for firms that need to get their regular work done but also need to constantly innovate. The key is to figure out which roles require in-house resources, and which can be done with the help of contingent workers.