Why bosses don’t need to give millennials big pay hikes

THE idea that millennials are disloyal job-hoppers has been punctured by research that shows young Britons sticking with their employers for longer than previous generations.

Moreover, young people are paying a price for this loyalty by missing out on the pay rises that typically come with switching jobs. This is part of the reason young people are earning less in real terms than the generation before them at the same age — the first time generational progress has reversed for at least half a century.

Only 4% of people born in the mid1980s moved jobs from year to year when they were in their mid-20s — half the rate of those born a decade before them.

The research by the Resolution Foundation think-tank helps explain young people’s poor pay growth.

The typical pay rise for someone moving jobs when young is about 15%, the think-tank found. While job-hopping has declined across the workforce since the financial crisis, it is particularly costly for young people because they tend to secure the biggest pay rises when they move.

After taking account of inflation, annual pay increases from employers to staff at this age have dropped from about 4% to close to zero.

“One of the most striking shifts in the labour market has been young people prioritising job security and opting to stick with their employer,” said Laura Gardiner, a senior policy analyst at the Resolution Foundation.

Almost half of those born in the early 1980s had been with their employer five years or more, compared with 43% for people born a decade earlier measured at the same age.

A survey by ManpowerGroup of 19 000 21- to 36-year-olds in 25 countries last year found they craved job security above almost all else. — © The Financial Times, London