Job hopping is good (and justifiable – especially for Gen Z)

According to an article last month in the Harvard Business Review, job hopping is likely to increase given the prevailing attitude of Gen Z workers.

“Only 13% (of Gen Zs) intend to stay with their current employer beyond four years and 83% outwardly consider themselves to be job hoppers — as opposed to their older counterparts who are more likely to stay in the same role for years.”

From the start of my career as an agency recruiter, I viewed job hopping as a good thing due to self-interest (I was a temp consultant).

Candidates for temporary roles were more placeable if they had various experiences across employers and industries

Compared to candidates with a more stable employment history, job hoppers were likelier to be exposed to a wider variety of technology, personalities, work cultures, tasks, and challenges.

If you take even a brief look at the different employment marketplace now, compared to just a decade ago (let alone the early 1990s, when I was in my mid-to-late twenties), there are many easily understood reasons why Gen Z (born 1997 – 2012) is acting differently when it comes to answering the “do I stay or do I go’ question about their employer.

Reason #1: More available jobs – vacancies to total employment expressed as a percentage, in August 1994 was 1.03%. In August 2004 it was 1.30%. In August 2014 it was 1.25% and in August 2024 it was 2.28%. Of course, there is variation across cities, states, industries, occupations, and skill levels, but in aggregate, a jobseeker in 2024 has 82.4% more vacancies to consider than a jobseeker in 2014 and 121% more than a jobseeker in 1994.

Reason #2: More confidence to get another job if a move doesn’t work out: All three of my Gen Z children quit their respective jobs in 2023 without another job to go to. My eldest two children had just started their post-tertiary study careers and neither had much experience in their respective fields, but no matter, they were confident of finding another job quickly. And they did. Many other Gen Z workers feel the same way.

Reason #3: More variation in the available jobs: Three decades ago, as a recruitment consultant, the only real option for another job was to work for another recruitment agency. In 2024, an agency recruiter is a valid candidate for jobs in TA, RPOs, industry vendors, and student recruitment, to name just four alternatives. Many other occupations have a comparable variation available.

Reason #4: More known about the available jobs and employers: The rise of review sites like Glassdoor and the proliferation of employer branding via LinkedIn, blogs, videos, podcasts available via a multitude of platforms, make it much faster and easier to discover a wide range of information about jobs and employers from a wide range of sources. All this data makes it easier for job seekers to compare their current job with the available alternatives.

Reason #5: More proactive approaches about available jobs: Proactive sourcing of candidates was largely the preserve of research teams in search firms until the last decade or so. The plentiful information about potential candidates available on LinkedIn, let alone through any other source, makes it much easier for any recruiter to identify, engage, and refer quality workers to vacancies now than it has ever been. The more often a worker is approached about vacancies, the more likely they are to accept an offer and leave.

Reason #6: Remuneration acceleration: Recent research claims that the average wage premium for changing jobs is 9% ($5700), with job switchers aged between 21 and 34 experiencing an even larger pay jump of around $7,500 annually. With a cost-of-living crisis more significantly impacting those on lower incomes (of which Gen Z is disproportionately represented), it’s understandable that workers in their twenties don’t want to wait ‘their turn’ at their current employer.

Reason #7: More (justifiable) cynicism about employers: When wage-theft cases (overwhelmingly involving lower-paid workers) implicating high-profile employers such as Qantas, Coles, Woolworths, Grill’d, Sunglass Hut, Bunnings, Super Retail Group, Commonwealth Bank, Michael Hill, Rockpool Dining Group, Domino’s Pizza, Merivale, 7-Eleven, Melbourne University and Lush Australia, among others, it’s not surprising young employees feel they shouldn’t automatically be loyal to their employer, therefore move to another employer when a better job is offered.

Yet, despite all of the above, would you be surprised to know that job mobility (i.e., job hopping) in Australia is at historically low levels?

In 1994, 11.5% of workers in Australia were employed by a different employer compared to 12 months earlier (the definition of job mobility).

In 2004, job mobility declined to 10.9%. It declined even more in 2015 to 8.6%, and in 2024, it stands at 8%, close to the record low of 7.7% in 2017.

The passing of the Fair Work Act of 2009 is likely to have significantly reduced involuntary staff turnover (and consequently job mobility results) due to the raft of protections available to workers through the employer’s obligation to procedural fairness.

However, the greater prevalence of restraint clauses in employment contracts counterbalances the impact of the Fair Work Act, which the current government, in trying to stimulate real wage growth, is promising to address as employment restraints impact job mobility, which flows through to wage rises.

Earlier this year, the ABS released its first findings into the use of restraint clauses by Australian businesses, and it concluded:

• 46.9% reported they used at least one type of restraint clause
• 20.8% reported they used a non-compete clause for at least some employees.
• Non-solicitation of co-workers clauses were used in 18% of Australian businesses in 2023 (mainly applied to all, or almost all, employees)
• Approximately one percent said a potential employee had declined their job offer because of a Non-compete clause

I wonder whether Gen X and Baby Boomer employers ever consider that they (in aggregate) have created the conditions for fewer “good candidates on the market” due to a hypocritical attitude about restraint clauses (“good for me to keep staff but bad when I want to hire a worker with one”), and more money/better opportunities elsewhere (which the ABS data says they did at a greater rate than their employees).

Note: You can listen to my ten minute conversation on this topic with Adele Last in episode 83 of Recruitment News Australia

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