• Job loyalty denting millennials’ pay and careers, report finds

  •  
  • 23 Feb 2017
  • Comments 5 comments

Resolution Foundation says drop in earnings for UK workers in their 20s is ‘unprecedented’

Millennial workers’ reluctance to job-hop is having an “unprecedented” negative effect on their pay and career progression, according to new research from the Resolution Foundation.

Only a quarter (25 per cent) of workers born in the mid-1980s moved jobs from year-to-year when they were in their mid-20s, found the report – half the rate of those who were born a decade earlier in the mid-1970s.

The Study, Work, Progress, Repeat? report found that each generation of workers – from those born in the early 1950s to the late 1970s – earned more than the generation before them during their 20s. But workers born during the early 1980s earned around £40 a week less around the age of 30 than those born 10 years earlier. It also found that people born in the late 1980s currently earn no more than those born 15 years earlier were earning at the same age.

As well as less frequent career moves, the Resolution Foundation said the halt in the increase of earnings could also be down to factors such as the 2008 recession, a shift towards working in low-paying sectors and the decrease in employers rewarding long service.

It said the decline in job mobility was particularly damaging for young people because the typical pay increase for someone moving jobs at that age was around 15 per cent, and decreases with age.

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

“This may be understandable in a jobs market characterised by rising temporary work and zero-hours contracts. But with the typical pay rise for a job-mover in their mid-20s at around 15 per cent, and evidence that employers have essentially stopped rewarding their long-serving staff with real annual pay increases, such job loyalty can be very costly.”

The report also found that the growing number of workers in higher-paying sectors has boosted pay across all age groups, apart from those in their 20s. The rising share of workers aged 26-30 in low-paying caring, cleaning and leisure activities jobs has reduced typical pay packets, it said.

People Management recently reported on several common myths about employees of different age brackets. Chef Martha Stewart has previously referred to millennials as “lazy, self-indulgent and lacking in initiative to be successful”, and the generation is often stereotyped as social media connectors who reject traditional career paths, don’t care for authority and have little interest in a job for life.

Gardiner added that although millennials have fallen behind the generation before them in terms of pay, they are still the most highly qualified generation ever seen in Britain. “Making the most of these skills will be the key to getting Britain’s longstanding social contract that each generation outperforms the last back on track,” she said.

Add Comment
Comment List
Comments (5)
  • I have always said if you want more pay change your job but it has become more and more time consuming and costly.

  • I wonder whether college debt has made the group reluctant to go to higher paid jobs that take them over the threshold that triggers loan repayments?

  • Clearly, there are several aspects to this research - and with unprecedented 'full employment' I agree the opportunities just aren't there for frequent job moves (probably why those who do move are commanding high pay increases).

    The flip side is that those who stay put appear to receive little reward for their loyalty. Isn't this partly down to the fact that rewarding long service has been a casualty of the age discrimination legislation? Ironically, it appears the younger workforce are now paying the price. How times change.

  • An interesting article. One thing which it does not consider is the possibility that millennials are prioritising quality of life over career progression - not exactly Martha Stewart's "lazy" generation but one less inclined to climb the greasy pole?

  • I really don't think it's down to a reluctance to move jobs, it's that the jobs simply aren't there. The "low paid cleaning and leisure" jobs are really all there is in many cases. I am fortunate in that I work in a highly-rated University and many of our students (having just spent the last couple of days seeing my personal tutees) do still seem to be able to get good job offers of the 'traditional' graduate roles. However my perception (also as a parent) is that there is a large segment of the age group who either lack presentational skills or vocational relevance to even get a foot in the door and seem trapped in low-paid work. Knowledge based jobs can be offshored as well as production jobs - so the entry level roles are disappearing off to India. Little wonder then that so many millenials choose to emigrate, and who can blame them?