Job Turnovers Not Driven by Generational Differences

Millennial and Generation Z’s job-hopping is nothing new—actually, it’s fairly typical for employees their age, according to a September issue brief from the National Institute on Retirement Security.

While defined benefit plans have been fading from the retirement industry landscape, it is not necessarily true that younger workers’ job-switching indicates a disinterest in them, NIRS’ research found.

“Younger workers have always changed jobs more often than older workers as they find their career path,” said Dan Doonan, NIRS’s executive director, in a statement. “That was true for Baby Boomers, Gen X, and it remains true today. The real drivers of turnover are the economy, benefits and job opportunities, not generational differences. This is a critical point for policymakers and employers to consider as they design retirement and benefit programs and policies for the workforce of the future.”

Job Retention Through a Historic Lens

The U.S. Bureau of Labor Statistics’ job tenure data show that employees ages 25 to 34 years old spent only a few months longer at their jobs in 1983 than those who were the same age in 2024. The Baby Boomer cohort’s median job tenure from its mid-20s through mid-30s was three years, while 2024’s mix of Gen Z and Millennials recorded 2.7 years—an even longer average than in 2000 (2.6 years).

NIRS cited additional research supporting the claim that job-switching is nothing new. The Pew Research Center found that “college-educated Millennials are sticking with their jobs longer than their Gen X counterparts.” In 2016, about 75% of college-educated 25- through 35-year-olds (75% for men and 74% for women) had worked for their employer for at least 13 months. Sixteen years earlier, only 72% of men and 70% of women in the college-educated group had that same tenure.

“In fact, if there is any real trend in the median tenure … it is that older workers have shorter tenures today than older workers in the past,” the paper stated. “This could be due to several possible factors, including the decline of private-sector pension plans that provide strong financial incentives to stay in place until retirement, a decline in the percentage of Americans working in manufacturing (where retention has been consistently strong), or the fact that there are simply more opportunities in today’s economy to find a new job.”

Sector Matters

The report found employee benefits were a key factor in many employee decisions to remain at their job and that, notably, employers in the public sector tend to offer stronger health care and retirement benefits than do those in the private sector.

According to BLS data, about 86% of state and local government employees have access to a DB plan, compared with only 15% in the private sector. Meanwhile, 89% of state and local government employees have access to health care benefits through their employer, higher than the 72% of private sector workers.

“Despite lower average pay, public sector benefits incentivize employees to stay in their jobs and reward long careers, hence [a] historically higher private sector quit rate,” the NIRS paper explained.

In 2024, the private sector quit rate was approximately 27%, compared with almost 10% in the public sector. The disparity has remained over the past several decades: In 2000—the farthest back the data go for the quit rates discussed—the difference between the two was only about 30 percentage points.

Industry differences also shape job stability. Within the private sector, professional and business services, retail, and manufacturing have divergent retention trends. The retail sector has typically had the highest quit rate since 2001, while manufacturing has consistently had the highest job-retention level over the period. The discrepancy in job retention rates can be attributed, at least partly, to the nature of the benefits associated with the different jobs, NIRS explained.

The manufacturing industry offers “more robust pay and benefits” for its workers than the other two private sector industries discussed. In 2021, 90% of manufacturing workers had health care benefits and 84% had retirement benefits provided through their job. Retail jobs, meanwhile, offer such comprehensive benefits much less often.

“Quit rates in the manufacturing industry have remained steady despite the long-term decline in the number of manufacturing jobs in the U.S,” the report found. “This trend suggests that American workers are not inherently less loyal to their jobs, but rather that the U.S. economy has been moving away from industries that historically have emphasized long careers, like the manufacturing industry.”

Debunking the ‘Gig Economy’ Myth

According to the NIRS, another component of the employee tenure myth is the emergence of the “gig economy.” The researchers defined gig work as “short-term, task-based jobs performed by independent workers often facilitated by digital platforms.” Workers are generally “paid per task or project (a ‘gig’) rather than receiving a regular salary or wage, giving them flexibility but generally depriving them of the benefits and legal protections associated with traditional employment.”

Data indicate, however, that most gig workers only work a handful of hours each week to provide a secondary source of income that supplements their full-time job. According to Pew, 16% of Americans have earned income as gig workers, and of that 16%, only 31% report that their gig is their main job. In the big picture, full-time online gig workers account for only roughly 3% of U.S. adults.

“The notion that workers in the future would not be interested in a job perk such as a defined benefit pension because they are likely to leave that job quickly isn’t supported by the data,” the NIRS paper stated. “Retirement may not be top of mind for a young worker with more immediate financial concerns, but a robust retirement benefit is likely something they will come to appreciate as they move through life’s various stages, just as prior generations did.”