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Millennial Employee Tenure and the Gig Economy

Authored by Garrette Furo

With boomers and Generation X’ers leaving their careers and more millennials entering, there is a demographic shift in the American workplace – what was once gold watches and making partner is now job hopping and celebrating the gig economy… right? More than any other cohort, millennials exhibit skepticism towards the economy and question the stability of their workforce. Having grown up in the financial crisis, many young adults recognize that a functional economy – and job – is not promised.

So just how badly are millennials disfiguring trends in American job tenure? According to Pew Research, millennial workers are just as likely to stick with their current employers as Generation X was when they were the same age. In fact, the U.S. department of labor data suggests that college-educated millennials have longer track records with their current employers than Gen X workers did. (1)

Pew reported that on average of those surveyed, 63.4% of employed millennials said that they had worked for their current employer for at least 13 months compared to 59.9% of Gen X’ers when they were the same age. (2)

One reason for this trend may be the high levels of education for millennials. Indeed, employee tenure is positively correlated with educational attainment and millennials are the highest educated demographic cohort ever. In fact, 40% of millennials have a bachelor’s degree compared to Gen X’s 30%. College-educated millennials are sticking with their jobs longer than X’ers! (3)

Nearly 75% of college-educated millennials declared working for their employer for at least 13 months, compared to 70% of Gen X. The trend among young adults and adults with no college education is different, but not dramatically. Amongst those with no college degree, about 69.5% of millennials had been with their employer at least 13 months, like X’ers at 70%.

Overall, job-hopping in the United States is a declining trend and has been since the 1980’s. There are a variety of reasons for this trend including the rise of dual career households, decline in middle-skill jobs (greater specialization being correlated with little ability to move around) and the need for employees to retain health insurance and income to pay off debts. (4)

Perhaps it was expected that millennials would be job-hopping-gig-economy-fanatics. Not quite! The Deloitte 2019 millennial survey found that the gig economy appeals to 80% of millennials, however, only 6% of millennials said they’ve chosen to do gigs instead of finding full time employment. 50% say they would consider it and 61% would take gigs to supplement existing income. Ultimately, half of millennials believe gig workers can earn an income that is approximately equal to full-time jobs and believe that this option can provide a better work life balance.

The gig economy is interesting for a variety of reasons, including the application of novel and refined skills, flexibility, and empowering participants with individuality and increased decision making. 58% of those surveyed cite the gig economy as attractive because of the opportunity to earn more money while 41% say they’d like to work the hours they want. 37% are interested in a better work life balance. Interestingly, the trend in risk aversion is strong and unpredictable work hours and income (30 and 39 percent) are the biggest reasons that millennials are not gravitating towards the gig economy. Interestingly, 27% said that it was too difficult to make plans and plan for the future. (5)

However, the trend in risk aversion is quite strong among the popular demographic – with unpredictable work hours and income (30 and 39 percent, respectively) as the main reasons that millennials are not gravitating towards the gig economy. Interestingly, we had quite the opposite hypothesis before reviewing the data – and trust many others may have as well.

Related: Millennial Investing, a Primer and Robo-Advisor Trends

References:

1.“Employee tenure in 1998”. https://www.bls.gov/news.release/history/tenure_092498.txt.
2. Fry, Richard. “Millennials Don’t Switch Jobs Any More Than Gen Xers Did”. Pew Research Center, 2020, https://www.pewresearch.org/fact-tank/2017/04/19/millennials-arent-job-hopping-any-faster-than-generation-x-did/.
3. “How Millennials Compare With Prior Generations”. Pew Research Center’s Social & Demographic Trends Project, 2020, https://www.pewsocialtrends.org/essay/millennial-life-how-young-adulthood-today-compares-with-prior-generations/.
4.Molloy, R., Smith, C.L. & Wozniak, “Job Changing and the Decline in Long-Distance Migration in the United States”. Springer Link, 2017, https://link.springer.com/article/10.1007/s13524-017-0551-9.

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