A high percentage (87%) of companies are reporting costs between $15,000 and $25,000 in replacing each millennial employee they lose, a report from Millennial Branding and Beyond.com found.
The high costs of hiring and retaining millennials stems primarily from training and development, with 51% of employers stating this procedure costs the most when dealing with millennials. The lengthy, three-to-seven week process of hiring a fully productive millennial was mentioned by 56% of organisations, with interviewing being the most expensive part of the procedure.
This is cause for concern for many organisations, as 40% of companies surveyed stated they currently employ 50 or more millennials, with 60% of all millennials leaving their employers in less than three years. Ten per cent of organisations stated they felt their millennial employees went straight to competitors.
With projections demonstrating 75% of the global workforce being millennials by 2025, this trend could result in a “very expensive revolving door”.
“Companies continue to struggle retaining my generation and as a result it costs them a lot of money and productivity that they could be saving if they created a stronger corporate culture to support them,” Dan Schawbel, founder of Millennial Branding, said.
The survey found that many millennials will decide whether they stay at an organisation based on a “good cultural fit”. Thirty per cent leave their company due to receiving a better offer, with 27% citing their departure as being due to their career goals not aligning with the company, and 13% pointing to lack of career opportunities.
In order to cut-down on turn-over, some organisations are now incorporating retention programs geared towards millennials. Most commonly, this involves giving employees greater access to workplace flexibility or mentoring programs.
On a broader scale, new research from Robert Walters found most professionals – regardless of age – valued career progression over anything else, with 31% stating it as a major factor in taking on a new role. Consistent with the wants of millennials, flexibility/work-life balance came in second at 29%, followed by good salary (24%). A recognisable/good brand was the main attraction for 14% of respondents, with 2% indicating non-monetary benefits.
Robert Walters suggested that employers should construct career progression pathways before offering positions, and place that element at the forefront of the offer to help attract the best candidates and increase retention.