Loyalty on the wane

“Who stays anymore with the same company for so long,” wonders Shravya Nath, a 29-year-old programmer who has changed three jobs in the last five years. Nath claims to be living the life of a ‘jumping jack’ since she is keen “to explore better opportunities and higher pay”. Nath’s career pathway mirrors that of many other ‘’millennials’’ who are recognised for frequent job changes.

A recent Deloitte survey points out that in India, 47% of millennials expect to stay with their current employers for less than two years,  while only 24% aim to complete five or more years with the same company.

“The average tenure of millennials is two years,” says Amit Malik, people, operation and customer service officer, Aviva India.

At Adecco Group India, millennials, who constitute 60% of the workforce, tend to stay on for an average between 1.5–2 years, says the company’s director for professional staffing, Mayank Patel.

Malik feels that millennials get disengaged if there is not enough autonomy or opportunities for challenging and innovative work, thus forcing them to leave. Higher pay is, of course, another major reason.

But two years is too less a tenure for an employee and can drastically impact an organisation’s financials, feel experts.  Especially today, when millennials constitute 60-70% of the total employee strength in organisations.

Says SV Nathan, partner and chief talent officer, Deloitte India, “Each employee brings unique talent comprising knowledge, skill-sets and collaborative skills. When they leave, we lose that vital talent. The loss may affect the base strength of client-facing professionals and might also impact the team morale.”

Experts say the cost (to a  company) of a knowledge worker leaving within 12-24 months of joining is equal to a year’s salary. This cost factors in multiple aspects such as the time taken by the candidate to turn productive, cost of hiring, cycle time to hire, training costs, etc.

Says Neeru Mehta, VP, human resources, GlobalLogic India, “Cost of a productive replacement itself can easily be more than 100% of the employee’s annual salary. About 12 to 24 months is the time when they start giving back to the organisation.”

But in today’s day and age when corporates are re-structuring businesses, cutting costs and ‘’right-sizing’’ workforces to align with the global push towards increased digitisation and automation, lack of millennial loyalty could turn out to be a blessing in disguise. Probably. Consider this…2017 witnessed over 50,000 IT/ITeS employees being pink-slipped across companies like Infosys, Cognizant, Tech Mahindra, etc. As business models get skewed towards technology, demanding skill-sets in artificial intelligence (AI), machine learning, internt of things (IoT) and big data,  the need to right-size will be greater than before.

Although no company acknowledges the compulsion to right-size, they do accept that in the digital economy, the key question is ‘who to retain’, instead of ‘how many’.  

In the product engineering industry context, says Mehta, “attrition of our high-skilled workforce impacts us when we lose talent who are the front face of the organisation for our clients, and the talent which is working on technologies like AI, machine learning, etc. That is when the question of whom we lose becomes more relevant.”

The (voluntary) millennial churn, say experts, might work to the advantage of companies, “as instead of corporates having to lay off, millennials themselves would leave to seek other opportunities, or to work as gig workers.”

Experts feel since companies have to walk the tight-rope between right-sizing and millennial attrition, the most prudent approach would be to cherry-pick millennials who display the right skills, and train them further in congruence with the organisational goals.

Nathan feels that there are two ways of looking at this. “Will companies use the propensity of millennials to leave as a factor to effect ‘rightsizing’? We have to face the reality that millennials like a fair environment and if this is missing and the intent is to use a rotating door strategy, it will fail.

Companies should help employees through learning and growth opportunities. It is important for companies to leverage the strengths that millennials bring and map them to projects that leverage these abilities.”

NOT TILL DEATH DO US APART

• The cost to a company of a knowledge worker leaving within 12-24 months of joining is equal to a year’s salary
   
• In the digital economy, the key question corporates face is ‘who to retain’, instead of ‘how many’