There’s been a notable shift in the job market over the last several years. The expectation of a lifetime employee has been replaced by a dynamic workforce that frequently changes jobs. According to data from the U.S. Bureau of Labor Statistics (BLS), the average worker today spends around 3.9 years at a job, which is down 5% since 2022 and the lowest it has been in the last two decades. Not surprisingly, the shifting trend toward shorter employment spans is seen more among millennials and Gen Z. Workers aged 55-64 spend an average of 10.1 years at their jobs compared to only 2.8 years for workers aged 25-34.
Understanding why this shift is happening, and what employers can do to adjust, is vital for businesses looking to adapt and thrive in the evolving job market. This article delves into the causes behind declining job tenure and offers actionable strategies for employers to adapt to this new workforce dynamic.
Why does today’s workforce job-hop?
1. Changes in Employee Expectations
Millennials and Gen Z have come to realize the importance of pursuing professional development and career growth and believe that remaining in a position for too long hinders long-term career growth and the development of new skills. They have effectively changed the stigma from job-hopping to career exploration, growth and development.
According to research by Deloitte, 43% of millennials plan to leave their jobs within two years if their employers do not meet their needs for advancement and growth. Younger workers seek positions that align with their values and provide opportunities to develop new skills. When these expectations are not met, they are more willing than ever to seek other opportunities that promise greater fulfillment and development.
At the same time, the aging workforce is also contributing to changes in job tenure. As baby boomers retire or transition to part-time or contract work, organizations are forced to adapt to the needs of a multigenerational workforce with different priorities.
2. Technological Disruption and Changing Job Roles
The rise in workplace automation and technological changes has profoundly impacted the labor market. Automation, artificial intelligence (AI), and digital transformation are redefining job roles and industries at an unprecedented rate. Jobs that existed a decade ago may now be obsolete or significantly transformed, requiring workers to continuously upskill or reskill.
3. Shifts in Organizational Structures and Company Ownership
Employers themselves are also contributing to the decline in tenure by restructuring teams, eliminating roles due to automation, or outsourcing functions, which disrupts traditional career paths. Shifts in company ownership—such as mergers and acquisitions—have also contributed to more frequent job changes. These events often lead to unexpected layoffs which impacts engagement. Gallup reports that only 3 in 10 are emotionally and behaviorally connected to their job and company. So, the lack of commitment to employees is contributing to an equal and opposite reaction from the workforce.
4. Rise of the Gig Economy and Freelancing
The gig economy, which was accelerated by the COVID-19 pandemic, has dramatically reshaped the concept of traditional employment. With platforms like Uber, Upwork, and Fiverr offering flexible work opportunities, many workers are choosing temporary engagements rather than a linear career, within a single organization.
Employer Strategies to Adapt to the Decline in Job Tenure
While tenure offers certain advantages, it can also limit company performance. Employers who adapt their strategies to this new reality can build stronger, more stable teams that perform better and achieve more. Here are some strategies employers can adopt to thrive in an era of declining job tenure:
1. Embrace Continuous Learning and Development
One of the most effective ways to retain employees in the modern workforce is by investing in their development. Companies that offer continuous learning opportunities, mentorship programs, and professional development paths are more likely to attract and retain top talent. According to LinkedIn’s Workplace Learning Report, 94% of employees would stay longer at a company that invested in their career development.
2. Create a Flexible Work Environment
Flexibility is no longer a perk; it’s an expectation. Employees today value work-life balance and the ability to work remotely or on flexible schedules. Employers that offer these options are better positioned to attract and retain top talent.
3. Foster a Strong Company Culture
Employees are more likely to stay at a company where they experience a sense of support, belonging and purpose. Activating a strong, inclusive company culture that aligns with employees’ values can significantly improve retention rates.
4. Encourage Internal Mobility
Providing opportunities for employees to explore other career interests, with internal mobility programs, is another strategy to retain employees. Employees are more likely to stay with a company if they see potential for growth and advancement within the organization.
By offering cross-functional training and opportunities for lateral moves, employers can create a more agile workforce and reduce turnover. Encouraging employees to explore new roles within the company can also help address skill gaps and promote innovation.
Conclusion
The decline in median job tenure is a reflection of broader shifts in the workforce, driven by changing employee expectations, technological disruption, and demographic shifts. To adapt to this new normal, employers must embrace flexibility, invest in employee development, and foster a strong company culture.