Gen Z labor market turnover expected to exceed 2022 levels

If you think the Great Resignation is over, think again.

The latest labor market snapshot from recruiting giant Robert Half shows that more Generation Z workers are likely to change jobs in 2023 than last year.

About 60% of 18- to 25-year-olds said they were likely to change jobs in early 2023, up from 53% last year. More than 50% of employees with two to four years at a company and working parents also said they were looking.

The trend worries hiring managers and is leading companies to strengthen retention efforts even more in a stubbornly tight labor market.

As the US economy emerged from pandemic disruption in 2021, nearly 50 million people quit their jobs, setting a record. Even more workers — 50.5 million, according to the US Bureau of Labor Statistics — quit last year.

The youngest workers emerged from the pandemic wanting bigger paychecks — and then “an extremely flexible work schedule.” Work-life balance was most important to 45% of Gen Z and 40% of millennials, said Jennifer Carlson, vice president and regional director of Robert Half for the Twin Cities.

In contrast, only 30% of baby boomers surveyed insisted on flexible schedules during their job hunt.

“We know there are clear preferences for younger people to work in as nimble and flexible a work situation as they can find,” Carlson said. “It’s clear as a bell.”

Nor should it be a surprise, said Lola Brown, 22, a Macalester College employee, student and soon-to-be job hunter. This spring, she plans to quit her job, move to Washington, DC and hopefully find a job as a policy analyst.

If the pandemic taught Gen Zers anything, “it’s that anything can change on a dime,” she said. They have to “be nimble and pivot,” she said.

The pandemic also changed how young workers view employers, she and other young workers said.

“There is a new realization of what is reasonable and expected, whether it’s how much I’m in the office or how much sick time [I get]. It’s not the same as pre-pandemic,” Brown said.

Paul Olson, 23, required that flexibility. He had a good job at a medical equipment distributor. But one day, while waiting to speak with a Mayo Clinic doctor about surgical tools, he saw construction workers.

Olson had always wanted to work with his hands, and that day sent him soul searching. He is now an apprentice carpenter at Hopkins-based Braxton Hancock & Sons, where he builds trusses, walls and stairwells for apartment buildings in the Twin Cities.

His job as a salesman paid well, but it required him to “just work, work, work, even on Sundays. It wasn’t worth it,” Olson said. “I was so excited to be out of that job.”

With his construction job, he said, he can now spend time with his wife.

Sara Beth Ryther, 32, who joined the Trader Joe’s Minneapolis store 19 months ago, sees co-workers and acquaintances who work for other retailers leave all the time.

“People jump jobs because of one or two benefits they see at another dealer,” Brown said. “I see people get fed up with the low pay or how they were treated and look at another dealership and think the grass is greener.”

The 350,000-member Society for Human Resource Management (SHRM) found that other triggers can cause young workers to leave.

Nearly 70% of remote workers now said in a SHRM survey that they would look for another job before returning to the office full time.

“If you’re young, that number jumps to 79%,” said SHRM Chief Human Resource Officer Jim Link. “Isn’t it incredible?”

Younger workers, he said, are unaffected by big tech layoffs or rumors of a potential recession.

“While the layoffs are grabbing market headlines and causing concern, that’s not what’s happening in greater America,” he said.

What workers do know is that Minnesota’s unemployment rate is just 2.9% and businesses are struggling to fill vacancies.

“Labor availability remains tight,” making labor shortages the second-biggest concern for the 530 businesses recently surveyed by the Minneapolis Federal Reserve Bank, said the bank’s director of outreach, Ron Wirtz.

Nationwide, 3.9 million Americans quit their jobs in January, prompting companies to raise wages, add retention bonuses and offer free training, telecommuting options and free food. “Employers start with increased pay and flexibility and then bring in a smorgasbord of other efforts,” Wirtz said.

With inflation, higher interest rates and skyrocketing grocery prices, “we have economic headwinds ahead of us, but the labor market is still very vibrant and very strong … and younger workers seem bound and determined to find as much flexibility as they can in their workplace,” Link said.

When looking for other jobs, young workers want psychological security. “They want purpose, fulfillment and the right culture,” one where they can speak their mind without fear of being fired or ostracized, said Jessica Kriegel, chief workplace culture researcher at the firm Culture Partners.

The persistence of this finding should be a wake-up call for employers already struggling with high turnover and labor shortages.

That juggling act helps retain some workers but strains others.

Human resources professionals are burning out and joining Gen Zers in the hunt for other jobs, Robert Half’s Carlson said. For three years, HR professionals have been “on the front lines” of labor shortages, and some have simply had enough.

With the pandemic “HR [departments] needed more help, but were the last to get it because their companies instead focused on supply chain issues, not the communication and heavy lifting needed to change policies to “go remote” while retaining and attracting talent ,” Carlson said, adding that it’s the next trend to watch.

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