Has the GFC stopped Gen Y from job hopping?

Gen Y professionals have earned themselves a mixed reputation with employers over the past few years. Taking advantage of a candidate‐lead market in the Australian financial services sector, they were generally seen as confident, but also selfish and disloyal.

An increased willingness to “job hop” was one manifestation of their so‐called arrogance: instead of building solid career foundations via several years at the same firm, plenty of young financiers moved between “permanent” roles on a regular basis. However, as we shall see below, the global financial crisis is helping to change Gen Y attitudes, and this may in turn help retention rates.

A lucky generation

There are several definitions of Gen Y, but roughly speaking anyone born between 1980 and 1995 qualifies. Given that the financial sector doesn’t employ too many teens, we are overwhelmingly talking here about people in their 20s: mainly graduates, analysts, and associates.

As the first net‐savvy generation to enter the workforce, Gen Y professionals were characterised as smart, impatient and outspoken. However, in Australian financial services, much of their initial success was due not only to IT astuteness and personal ambition, but to having started their careers during a boom.

Where were today’s young financial professionals during the Asian Financial Crisis and dot.com bubble? Short answer: school or university. Gen Y men and women who entered the workforce in 2004, for example, would have enjoyed an energetic employment market right up until 2008. During these first few prosperous years many would have hopped between different positions, making diagonal moves up the corporate ladder in a thirst for better money and job titles.

Who could blame Gen Y for being job hoppers? Banks were crying out for staff in the years leading up to the GFC and young candidates took advantage.

And then came the GFC

Things changed in Australia, however, in late 2008 and early 2009 during the worst of the global downturn. Inexperienced, non‐revenue‐generating junior bankers were among the first casualties of the crisis, their careers cut short just when they were planning their next moves. The young stars of the boom era were suddenly seen as over‐promoted and underexposed. To make matters worse, Australian finance professionals were also laid off in London and New York, and many couldn’t find work on their return home. If you can’t make (or save) us money immediately, said employers back in '08, then we’re not interested. Give us Gen X or older.

For those junior professionals who kept their positions, the financial services sector was perhaps no longer the promised employment land they had dreamt of as students. Scary phrases like “mass layoffs” and “last in, first out” were cropping into their vocabulary.

Attitudes have changed this year

When vacancy volumes spluttered back into life in late 2009, the focus was on securing senior talent, but these days institutions are building up their teams. This has brought Gen Y back into the employment market, but with a less arrogant attitude than pre GFC.

In the most humbling situation are young bankers who were laid off at the start of the crisis, have yet to find work and are now approaching 18 months of unemployment. Unless they used their time‐off productively (e.g. further education), they might struggle to get back into the sector, despite the upsurge in recruitment this year. And even if they secure interviews, they will be grilled for being “underperformers”.

For those still in work, the effect of the GFC is more subtle and is yet to fully play out. But it is generally thought that they are more cautious about jumping ship purely to secure a quick pay rise.

People who do decide to change jobs are looking at wider issues than they previous did. Stability, medium to long‐term career development, the team environment, and the profile of the bank are coming into play. While compensation remains a significant Gen Y motivator, this applies equally to professionals of all ages who felt underpaid and unable to move during the GFC.

Recruiters in Australia think that twenty‐somethings have recently become more accepting of negative aspects of the new employment environment in financial services, such as lower bonuses, longer working hours and more demanding bosses. The Gen Y “I can have everything at work, and achieve a perfect work‐life balance” attitude is fading away.

This could help explain why we didn’t witness a huge post‐bonus exodus of young bankers in Australia this year. More Gen Y professional understand that the grass might not always been greener at the new employer, and this should in theory help retention as they seek longer-term tenure.

Will it last?

It’s unclear how enduring any changes in Gen Y behaviour will be. But given that many young people are still struggling back into the workforce, it’s likely to be at least a year (if ever) before they will try to job hop at the same rate as 2007.

And even then, there’s the question of whether firms will again allow junior candidates to be so in control of the employment market. The GFC has taught financial institutions to be more risk adverse and generally more unwilling to employ candidates that have changed roles too often. People who quit jobs in the past because they “felt like a change” or “just needed more money” are already increasingly frowned upon. Better justifications are needed.

Ultimately, the GFC might serve to make the career patterns of today’s young people more like those of previous generations: you can be ambitious in your financial services career, but only with the knowledge that switching firms too often is not the best way to reach the top. Relevant experience and a proven track record of loyalty are key.

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