Give your employees the most precious resource: Time
It’s no secret that the idea of employee loyalty with a company is being redefined in our world today. People are job hopping more than ever before in history. In fact, the Bureau of Labor Statistics has said that the average tenure for an American worker currently sits at 4.2 years. Probably better than you were thinking it might be. But this doesn’t tell the whole story. The real story is the breakdown by age groups.
There is a stark contrast between those beginning their career (Millennials) and those ending theirs (Baby Boomers). The 25–34 age range shows an average of 2.8 years in a job, while the 55–64 age range averages 10.1 year. Quite the difference, and has given the older generation something to frown upon when looking at the younger generation.
There are plenty of theories out there about why this gap exists. One explanation could be the differing idea of company loyalty. Thirty years ago, it wasn’t as socially acceptable to change jobs every couple years. This was a ‘red flag’ to any potential employer if a candidate bounced around. A part of your character was judged by your willingness to be loyal. Today that same social stigma isn’t there. If anything it’s pretty common, with many young people seeing their job changes as their way to develop themselves, learn new things, or in a sense give themselves a promotion. Why settle for 2–3% raises each year when you can move to another company where you can get a title bump and 10–15% raise?
You could also pin it on the fact that the older you are, the harder it is to get a new job. So this means Boomers tend to stick it out while Millennials have nothing but time ahead of them. They are getting married, having kids, and buying houses later than previous generations, so have the ability to take more risk in their career moves.
However you want to break it down, high turnover and low average tenure can be costly to companies. Not only in actual dollars, but reputation and social capital as well. It seems that most white collar jobs require 6–12 months in a job before that employee becomes fully trained and brings a positive impact to the bottom line (some industries like insurance can be a 2–3 year process). If that employee then leaves a year or 18 months after becoming fully trained, you’ve just wasted a lot of time, money, and effort.
That’s why companies are working so tirelessly on figuring out how they can reduce turnover and get their people to stay longer. There are tons of different ideas, and no one right answer. Each company is different, and thus requires different practices to reduce turnover.
But there is one idea that I almost guarantee would immediately reduce your turnover by up to 50%, especially from that younger side of your employees:
Time is the greatest benefit you can give an employee, and drive them to stay with you longer. With that in mind, companies should seriously consider building in attainable sabbaticals for employees. This means if you work for the company for 3, 4, or 5 years (whatever number you come up with), you earn a two-month paid sabbatical. I’d even give them a small bonus to use on travel.
This simple switch would do wonders for your company, but I can understand there may be some hesitation. So let’s talk about some of the concerns you might have trying this out, and what the actual truths are.
#1: This will be expensive.
No, it really won’t. Studies have shown that for most low-level employees it costs 30–50% of their salary to replace them. For mid-level employees, the cost bumps up to somewhere between 50%-100% of their yearly salary. Think of the lost revenue from that position being vacant, the stress on other employees, the time to interview and hire, the time from bosses, managers, and coworkers to train someone new, then the 6–12 months for them to get fully trained. It gets costly and takes a lot of time. You know how much a two-month sabbatical will cost? 17% of their yearly salary. But the best part is that when they return, they are already trained and ready to go.
#2: What if they quit right after?
Might be a concern as well, but you are still getting the better end of the deal. Let’s do some math. If you figure out that the average tenure of your younger employees is around 2 years, set the bar for the sabbatical at 4 years. Now you’ve given your people a reason to stay longer. And guess what, that means you’ll cut your turnover in half. You see, the game today is not figuring out how to get your people to stay forever. That’s unrealistic. The game is understanding that if the average is 2.8 years, try to get them to stay 5 or 6 years. This change alone would bring drastic results for your company. So even if they quit after, you’ve come out ahead. You could also build in a clause in your program that you must stay at least 6 months after returning.
#3: We’ve never really done something like this before.
The worst justification for anything that happens in business. I’ve written about this before. Just because you haven’t done it before has no bearing in today’s world. We are living in a time of massive disruption, and in these times, those who are bold and create their own rules are the ones who win. Sitting back and hesitating is a great way to stop attracting good talent.
The key to attracting and retaining good talent is learning what they want, and giving it to them. In my opinion, time is the greatest thing you can give an employee. It’s the only finite resource any of us have. And for those younger employees who aren’t married, or have kids, time is the greatest gift you can give. I can’t tell you how many of my close friends have quit their job to go travel the world, then came home and found another job. It’s not that they hated their job, it’s just they had an itch that needed scratching. Those from previous generations might say that irresponsible. Many of the younger generation would say it would be irresponsible not to take that chance. Wouldn’t it be great to work for a company that let you scratch that itch, and then had a job waiting for you when you got back?
I implore you think about giving this a try. And don’t worry, you won’t be the first. I know multiple companies who have tried this out, and guess what: their turnover dropped immediately. Find a way to figure out what your people want, hack your current system, and give it to them. Your bottom line will appreciate it.
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