A new survey of employers finds the cost of replacing a " Millennial" employee -- an individual in his or her 20s -- ranges between $15,000 and $25,000.
That's the conclusion of a survey conducted by Millennial Branding, a Gen Y research and consulting firm, and Beyond.com, an online career service.
Actually, the cost of replacing any employee across the generational spectrum is high. A recent study by the Center for American Progress puts this number at about 20% of anyone with a salary up to $75,000 or less. By this estimate, assuming a Millennial employee is making about $50,000, this means a $10,000 replacement cost -- a little more conservative than the Millennial Branding estimate, but still something to ponder for organizations.
What adds to the Gen-Y replacement cost is their greater proclivity to job-hop: the Millennial Branding study finds that the average worker under the age of 30 changes jobs every two years, compared to the five-year job-hopping rate of Gen X-ers (30 to 50 years of age), and seven-year-itch of Baby Boomers (50 years or older).
The major costs associated with replacing employees includes training and development, interviewing, job posting/advertising and on-boarding.
Also, as Millennial Branding put it: "Considering that approximately 40% of companies currently employ 50 or more millennial workers, these costs are expected to rise dramatically over the years to come. With current data showing more than 60% of Millennials leaving their company in less than three years, employers are facing a very expensive revolving door."
What can be done to keep to attract, rather than repel, needed talent? Some thoughts:
Don't compartmentalize the solution within a "program": Millennial Branding states that some companies have "retention programs" to keep employees in the fold. However, keeping people engaged and excited about a company means a cultural change across the board, a different way of looking at management -- or even better, a more management-free workplace.
Promote entrepreneurship and intrapreneurship: Nothing creates passion and personal responsibility more than being able to build one's own business. Provide ways to ensure incentives and rewards for innovation. Don't be afraid of employees even proposing disruption -- creating a product or service that turns the mainstream business on its head.
Remove the barriers between employees and customers: Organizations that remove employees from meaningful engagement with the customer risk souring those employees. As a great example, look to the customer call-center function -- a hotbed of turnover. Those companies that provide career tracks, training, and decision-making discretion to customer-care representatives see far less turnover than those that just want warm bodies at the call stations. At another level, employees caught up in a bureaucracy -- and are far removed from customers -- also are likely to be disenchanted.
Use social media: In its report, Millennial Branding points out that while 62% of HR professionals use job boards and corporate websites to recruit millennials, only 9% use LinkedIn, 3% for Facebook and 1% cited Twitter as a resource for recruiting purposes. You have to go where they live.
This post was originally published on Smartplanet.com