Millennials and Jobs

millenials jobsMillennials Are Not Being Rewarded for Job Loyalty

Contrary to popular belief, millennials are in fact less likely to switch jobs than earlier generations, a new study suggests—and the wish for job security could be undermining their potential income.

Among people born in the mid-1980s in the U.K., only one in 25 had switched employers before hitting their 30th birthday. That’s about half of the rate for those born 10 years before them, Bloomberg reports, citing data from British think tank Resolution Foundation.

Not only are those staying put not getting better pay—a job hopper in their mid-20s typically earns around a 15% pay raise, according to researchers—they aren’t even getting rewarded for committing to their current employers.

The study finds that employers are no longer offering salary hikes in real terms to long-serving employees in this age range, as opposed to the past average of a 4% raise, Bloomberg reports.

Authors of the study suggest that the stagnation in pay for long-term young employees may be caused by their lack of confidence in job seeking, according to Bloomberg. “Young people are prioritizing job security and opting to stick with their employers,” Laura Gardiner, a senior policy analyst with Resolution Foundation, tells Bloomberg. With evidence that firms are no longer rewarding longevity of service, “such job loyalty can be very costly,” she says.

A different study released earlier this month shows that, by age 30, millennial men in the U.K. would have earned around $15,600 less than the previous generation, reports Bloomberg, because of their shift into employment with lower wages.

Why millennials prioritizing job security are missing out on extra pay

Millennials opting to avoid the risk and stress of switching jobs could be paying the price for their company loyalty, according to new research conducted in the U.K.

Only one in 25 people born in the 1980s switched employment before their 30th birthday, official labor market data showed.

U.K. think tank Resolution Foundation found that in comparison to millennials, the generation born 10 years earlier were more than twice as likely to move jobs. The trend showed that millennials would often miss out on double digit-pay rises closely associated with a new job and the research indicated its findings could even help explain younger people’s poor pay growth overall.

 “One of the most striking shifts in the labor market has been young people prioritizing job security and opting to stick with their employer rather than move jobs,” Laura Gardiner, senior policy analyst at the Resolution Foundation, said in a statement.

Millennial myth debunked

The research appears to debunk the myth that young workers are disloyal job swappers and even concludes that the benefits of staying in the same position is counterproductive, at least in terms of pay. Annual real pay increases for long-term employees were found to have dropped from around 4 percent to close to non-existent.

One theory offered by Bank of England Governor Mark Carney could be that people prioritize job security during a particularly tumultuous financial climate.

“Put simply, long after the original trigger becomes remote, perceptions endure. (People) become embedded in economic narratives and their salience persistently affects risk perceptions and economic behavior,” Carney said in a speech the week following the Brexit vote.

The Resolution Foundation’s data follows another report it conducted earlier in February which found that millennial men were earning on average £ 12,500 ($15,622) less than the male generation that preceded them by a decade.

 

Sources

fortune.com

www.cnbc.com