BULACAN STATE UNIVERSITY

City of Malolos, Bulacan

Graduate School

Master in Business Administration

EXPLORING THE HIGH TURNOVER RATE

OF MILLENNIALS AND GENERATION Z
EMPLOYEES

A Research Paper
In partial fulfilment of the requirements for the subject
Business Ethics

Submitted by
Joshua S. Carillo
April 2021

Submitted to

Dr. Emerlita Naguiat

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 TABLE OF CONTENTS

I. INTRODUCTION...........................................................................................................................3

Objective..............................................................................................................................................5

Statement of the Problem..............................................................................................................5

Significance of the Study...............................................................................................................6

Scope and Delimitation of the Study........................................................................................7

Theoretical Framework.................................................................................................................8

Conceptual Framework...............................................................................................................12

II. METHODOLOGY.......................................................................................................................13

III. RESULTS AND ANALYSIS....................................................................................................15

IV. DISCUSSION..................................................................................................................................20

V. REFERENCES...............................................................................................................................22

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 INTRODUCTION

The shift in workplace trend is never ending. As new generation craft a new trend,

new workplace atmosphere must be dealt by the companies.

Latest data from the Philippine Statistics Authority showed that 27.5 percent of the

country’s workforce are Gen Y or millennials, while the Gen Z respondents make up 14.7

percent, a figure expected to grow to 35 percent by 2025 (Philstar, 2019). This figure shows how

millennials and Gen Z will dominant workforce by the coming years and understanding their

needs and up-bringing will be a vital data for the planning and policy making of the company. As

this policy will determine if these generation will stay or not.

This study focused on Millennials or Generation Y and Generation Z or Gen Z.

Millennials are individuals born between 1980 to 1996. Neil Howe and William Strauss

identified the personality traits of this generation in two books: Millennials Rising: The Next

Great Generation (2000) and Millennials Go to College: Strategies for a New Generation on

Campus (2007). According to Howe and Strauss, the Millennials are: special, sheltered,

confident, team oriented, achieving, pressured and conventional. While Generation Z are

individuals born after Millennials up to present day. According to Pew Research Center (2018),

this generation is on track to be the most diverse and best-educated generation yet.

A recent Gallup report on the millennial generation reveals that 21% of millennials say

they've changed jobs within the past year, which is more than three times the number of non-

millennials who report the same. Gallup estimates that millennial turnover costs the U.S.

economy $30.5 billion annually.

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 Millennials also show less willingness to stay in their current jobs. Half of millennials --

compared with 60% of non-millennials -- strongly agree that they plan to be working at their

company one year from now. For businesses, this suggests that half of their millennial workforce

doesn't see a future with them.

This trend is also being seen in the adult generation Z. According to a job recruitment

website, 31.82% of Gen Z individuals tend to change jobs after short periods of time, within 1 to

3 months, which are shorter work periods when compared to Gen X and Gen Y.

High employee turnover has tangible and intangible effects on the company. If turnover

rates are high, the immediate consequences are severe: loss of valuable knowledge and

experience, loss of morale for those left, and loss of belief in the team's competence and ability

to perform. None of those are quick or easy to replace. Also, high employee turnover increases

expense that will eventually affect the company’s bottom line.

This study aims to learn the reasons behind why millennials and generation z are quitting

there job early. The researcher values the importance of employees in business and helping the

company identify the possible reason behind high turnover rate of these generation will benefit

both the company and the employees. This study aims to help companies craft policies that are

fitted to this changing work scene. Eventually, these policies will create a better working

environment for the millennials and generation that may ending their job hunting.

Based on the data gathered, millennials and generation z values intangible characteristics

of a company than tangible things it could offer. These generations values communication and

relationship than compensation package the company offers. But it is good to note that still a

large number of these generations values compensation package with company-initiated benefits.

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 Having learned all these factors, the researcher has a high praise for these

generations who values work-life balance and relationship with co-workers. The researcher

hopes that companies will look into these factors and craft policies that will address these

needs while maintaining a good position in their respective industry.

Objective

The general objective of this study is to assess the current high turnover rate of

millennials and generation z in their workplace.

The data will be investigated to achieve these following goals. First, the researcher aims

to identify to identify the reasons for staying of currently working millennials and generation and

also the length of their current and previous employment. Second, this study aims to know the

reasons for millennials and generation z for leaving their company early. Lastly, this study seeks

to identify factors that millennials and generation z considers while looking for a company.

Statement of the Problem

The general problem of this study is: What are the reasons for the high employee

turnover rate of Millennials and Generation Z?

Specifically, this study quest for this research problem to be addressed:

1. What makes an employee stay in a company?

2. What make an employee quit a job?

3.. What factors are employee considering while looking for a job?

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Significances of the Study

The result of this study will promote longer stay in a company by millennials and

generation z. This research will benefit the following stakeholders:

EMPLOYERS. This study will guide employers in formulating their business policy

especially those related in but not limited to: hiring, company-initiated benefits and other

human resource policy. The employer may also use this study as a consideration in

brainstorming their next company events that may address the needs of millennials and

generation z. Lastly, the employer may use this study in crafting new employees training plan

and making it more suitable in millennials and generation z.

EMPLOYEES. This study helps employees to identify the reason for leaving a company

early especially those individuals that is new to the corporate world. Also, by knowing the

factors job-seeker is looking for a job will be a guideline for them of a good company and may

also serve as red flag if these factors are not seen in their current company. Lastly, the employee

may know the average time an individual last in a company.

JOB SEEKERS. By making this study a guideline for their job hunting, this study will

help a job seeker land a job that is suitable for a millennial or generation z. As a result of good

match with the company, job seeker may avoid job hopping due to incompatibility of the

company with millennials and generation z.

FUTURE RESEARCHER. Further use of these data may help future researcher as

reference if there is a change with the trend. By knowing the trend, future researcher may come

up with more accurate research. Also, future researcher may utilize this data to further expound

the reasons for millennials and generation z high employee turnover rate.

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Scope and Delimitation of the Study

This study will investigate the reasons for millennials and generation z high employee

turnover rate with a goal of helping companies in formulating policies that will address

identified behaviors. Also, the result will be useful for millennials and generation z employee or

future employees in assessing their company’s policy. The participants in this study are

categorized between millennials and generation z with their corresponding personal information.

This study will assess the factors affecting the judgement of millennials and generation z on their

employment. This study was able to gather data from 9 individuals composed of millennials and

generation z. Due to limited access to participants, the researcher was only able to conduct

research will his colleagues and peers. Lastly, the small quantity of data may not produce the

same result larger data pool will conclude.

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Theoretical Framework

A. Related Theories

Hierarchy of Needs by Maslow. In a 1943 paper titled "A Theory of Human Motivation,"

American psychologist Abraham Maslow theorized that human decision-making is undergirded

by a hierarchy of psychological needs. In his initial paper and a subsequent 1954 book titled

Motivation and Personality, Maslow proposed that five core needs form the basis for human

behavioral motivation.

Employers with low engagement rates often have higher turnover rates, as well as issues

with low morale and unhappy employees. By investing in the overall happiness of its employees,

a business can increase satisfaction while boosting engagement and motivation, which ultimately

impacts productivity. (Applying Maslow's Hierarchy of Needs in the Workplace, 2020)

Companies must be able to identify the primary needs of their employees before

satisfying its other needs. By doing this, the employees will have more reason to stay in

a company. Also, personal needs of a person affect his decision making especially on job

employment.

Human Relations Theory. This theory was developed by Elton Mayo, who conducted

experiments designed to improve productivity that laid the foundation for the human relations

movement. His focus was on changing working conditions like lighting, break times and the

length of the workday. Every change he tested was met with an improvement in performance.

Ultimately, he concluded that the improvements weren’t due to the changes but the result of

the researchers paying attention to the employees and making them feel valued.

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 These experiments gave rise to the theory that employees are more motivated by

personal attention and being part of a group than they are by money or even working conditions.

(7 Types of Workplace Management Theories, 2020)

B. Related Literatures and Studies

The effects of job hopping by millennials and generation z cost a lot for the

company they are previously employed. In a study conducted by Heinz (2020) in United

State of America it concluded:

“The cost of turnover is extremely high; it’s estimated that losing an

employee can cost 1.5-2 times the employee’s salary. Depending on the individual’s

level of seniority, the financial burden fluctuates. For hourly workers, it costs an

average of $1,500 per employee. For technical positions, the cost jumps to 100-150

percent of salary. At the high end, C-suite turnover can cost 213 percent of salary.

Not only are you forced to dedicate time and resources to recruiting, onboarding

and training a new hire after an employee leaves, your business simultaneously takes a

hit internally while the role remains unfilled. These expenses are known as the cost-per-

hire and cost-of-vacancy, respectively. It’s estimated that two-thirds of all sunk costs due

to turnover are intangible, including lost productivity and knowledge, which are part of

the cost-of-vacancy. Only 33 percent is lost to recruitment efforts, or the cost-per-hire.

However, the most substantial impact of turnover is not a cost at all, but the damage

done to your remaining employees. Your people are absolutely essential to your business’s

success. Without them, you’d be forced to work more jobs than you already do

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(startup culture, right?) and forego all plans to scale. In short, a high turnover rate cuts

much deeper than meets the eye. Take a look at some of the hidden costs associated

with turnover.”

With this skyrocketing figures and notably unquantifiable effect of high turnover

rate, employers must address this trend. The current challenge is twofold: They must

understand how to attract the millennial workers who are looking to leave their current

organizations, but they must also understand how to retain their existing millennial

employees. (Millennials: The Job-Hopping Generation, 2020).

These recent studies make company realize a need for more generation inclusive

approach in recruitment and identifying the need of every generation especially

millennials and generation z for the will form part a higher percentage of employees in

the future.

In a study conducted regarding millennials behavior it was concluded that

employers must not only look on negative side of this generation’s behavior but they are

encouraged to have a critical mind and view the positive output this may contribute to

the company. Brant and Castro (2017) stated:

“With the continuing influx of millennials into the workforce, organizations

have yet to experience the full impact of

the “Me Generation”. Therefore, understanding millennial entitlement is critical

for HRM. With the existing state of

knowledge, HRM scholarship is currently lacking sufficient information to

address the implications for individuals,

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 teams, organizations, and society. It is crucial for researchers to challenge the

conventional wisdom of only considering entitlement as a stable trait (ignoring contextual

factors), exclusively focusing on the entitled individuals, and only

seeing the negative side of entitlement. Researchers can address these critical gaps

by looking at entitlement differently than in the past: using a state conceptualization that

allows for contextual influence and investigating positive

effects at all levels. Millennial entitlement is a part of

contemporary organizations—for better or worse. Our hope is

that this article will spark future HRM research that allows researchers

and practitioners alike to better understand

entitlement in the millennial age and how best to handle it in a manner that is for

better.”

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Conceptual Framework

Input Process Output

Phenomenological
Qualitative Method -
When you want to describe
an event, activity, or • Identified reasons
phenomenon, the aptly for millennials
named phenomenological and generation z
study is an appropriate high turnover rate
qualitative method. In a • Average length
• Questionnaire phenomenological study, of tenure of
• Interviews you use a combination of millennials and
• Related Literature methods, such as generation z.
and Studies conducting interviews, • Exploring the
reading documents, factors millennials
watching videos, or and generation z
visiting places and events, are valued for
to understand the meaning them to stay in a
participants place on company.
whatever’s being • Identifying the
examined. You rely on the qualities of a
participants’ own company they
perspectives to provide are looking.
insight into their
motivations.
(Types of qualitative
methods, 2015)

Figure 1. Diagram of the Conceptual Model of the Study

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 METHODOLODY

The mixed method of research was utilized in this study. Quantitative method is used to

seek the socio-economic characteristics of the respondents. Quantitative descriptive questions

will often ask for figures such as percentages, sums, or averages. Descriptive questions may only

include one variable, such as ours included the variable of student debt, or they may include

multiple variables. When asking a descriptive question, we cannot investigate causal

relationships between variables. To do that, we need to use a quantitative explanatory question.

Hence, questionnaires are given or ask before the start of the interview. These questions revolve

around age, sex, and others. While Phenomenological qualitative method is used to identify and

evaluate the reasons behind high turnover rate in millennials and generation z. Phenomenology

is an approach to qualitative research that focuses on the commonality of a lived experience

within a particular group. Through this process the researcher may construct the universal

meaning of the event, situation or experience and arrive at a more profound understanding of the

phenomenon. (Chambers, 2013).

The data gathered is composed of millennials and generation z. Data are gathered

through personal interview or over-the-phone interview. Questionnaires are given before the

start of the interview or verbally asked before the interview. Total of 15 individuals are asked to

participate but only 9 of them was able to accept the interview due to conflicting schedule. Out

of the 9 individuals 6 are women and 3 are men.

First, the data is compiled and assess based on generation they belong to, 5 are

millennials while 4 are generation z. Then, the researcher also identifies the age and

educational of the respondents. This form part the qualitative method of the study.

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 Second, the researcher conducted an interview with sets of questions tailored to assess the

phenomenon of high turnover rate of millennials and generation z. Thus, achieving the research’s

objective. Answers form the respondents then analyze through categorizing common factors.

These results are also confirmed through various research of articles and studies related to the

problems.

The research instrument used are questionnaires and interview. Questionnaires are in

English and mostly composed of questions regrading the socio-economic characteristics of the

respondents. Interview questions are the main part of the research instrument for this is

composed of questions tackling the problem of the research. Thus, giving as a view of the

objective.

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 RESULTS AND ANALYSIS

This part presents the findings of the study on the basis of the objectives identified.

Part 1. Generation of the participants involved in the research paper.

PARTICIPANTS
Milllennials Generation Z

Generation Z, 4,
44%
Milllennials, 5,
56%

Graph 1. Generation of the participants involved in the research paper.

As shown in graph 1, there are 9 participants which are categorized as millennials and

generation z. The majority or 5 (56%) of the participant are born between 1980 to 1996 or

millennials. Further, the least or 4 (44%) of the participant are born between 1996 to present.

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 Part 2. Gender of the participants involved in the research paper.

PARTICIPANTS
Male Female

Male, 3, 33%

Female, 6, 67%

Graph 2. Gender of the participants involved in the research paper.

Graph 2 shows the distribution percentage of the two gender. Thus, majority or 6 (67%)

of the participants are women. While the least or 3 (33%) are men. The researcher was able to

take more female samples to more availability of persons around the researcher. With this, the

study may represent more of the melancholic characteristics of most female.

Part 3. The factors that make the participants stay in a company.

• Work-Life Balance

Millennials and Generation Z take work-life balance as the most

important factor that makes them stay in a company. A respondent states: “Time

flies so fast especially on this digital age and everything is on a fast-pacing

movement, one day you will realize that you are already old. I do not want to

waste my young adulthood working. I want to earn and play at the same time.

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• Getting along with peers or co-worker.

These generation values relationships. In a world were everyone is

fixated on there smartphones or gadgets, surprisingly these generation values

relationships. They would rather be in a company full of friends than potential.

• They enjoy their job

A famous quote by Marc Anthony says: If you do what you love, you’ll

never work a day in your life. This quote has been all over the internet if you

are looking for a quote regrading work. And this is what most of the

participants what. The reason for them to stay is their love for work.

• Appreciation

The researcher believes that this factor is true in every organization.

The participants value this factor since they what to have a sense of

accomplishment at the end of the day. A participant says that it is good to go

home knowing that your hard work is validated.

• Well Paid

Millennials and Generation Z are no different with other

generation with this factor. If the employers want them to stay, you must

pay the well. To add, millennials and generation z do not what good

salary package for its monetary value but this is a sign for them of

appreciation and validation form the company.

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Part 4. The reasons that make the participants leave a company.

• They want a job that fits their principles and values.

Millennials and Generation Z do not want any job, they want a job

that fits. These generation leave their company if the find it violating

major principles in their life. For example, a participant values the

importance of employee in a organization, he leaves his company due to

unfair treatment other employees were experiencing.

• No flexibility in time

Even though most of the participants are working in an 8am to

5pm working arrangement they still value time flexibility. Most of the

participants want their weekend allocated for personal live and everything

beyond their 8am to 5pm schedule. Also, they want a company that do not

have so much restrictions with service incentive leave. Violating their

private time leads to resignation on most of the participants.

• They are not just employees, they are mentees.

Aside from the monetary values that these generations expect, they

value learnings from their seniors. These generations are constantly

learning since most of the are young professionals.

• Mental Heath

Mental health has been increasingly being caught in attention by most

individual and these generation is not excused. This generation values their

mental health and they want the company to value it too. Some respondents

leave because they are very stressed with their work that it affects their life

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 after work. The respondents reiterate that mental health is as important of

physical health.

• Poor Compensation Package/ Better offer in other Companies

With the increasing presence of company providing allowances other

the government mandated allowances. These generation believes that

monetary compensation should not be enough and if there is a better offer in

other company. They are more than willing to leave.

Part 4. Factors participants are looking for a job

The result of these part is highly similar with their reason for staying in a job. The

following are the top qualities participants are looking for a job:

• Work-Life Balance

• Better Compensation

• Light Working Atmosphere

• Easily Accessible Workplace

• Job that they want to do or explore

These factors all boils down to time and self-love. These generations are looking a

company that will value their time and will not take from them. They would rather be in nearer

but lower paying job than high paying job but will take a lot of their time.

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 DISCUSSION

This part of the research summarizes all the findings and result and come up with

relevant recommendations.

The trend of job hopping is evident still even during the pandemic, this does not stop

some millennials and generation z to continue on looking for the “perfect” job for them. If the

pandemic can’t stop a millennial and generation z, then there must be something that can make

them stay. A CBNC article states that:

“Workers have been job hopping in the hopes of attaining better pay and career

mobility in the uncertain Covid-19 economy, and it is a trend that millennials and Gen Z are

expected to dominate again in 2021.

One in four workers plan to switch jobs this year, an increased pace compared to last year. Of

the one in five workers who switched jobs last year, 33% identified as Gen Z and 25% as

millennial, according to a new study from IBM’s Institute for Business Value.

Gallup identifies millennials as the most likely among generations to switch careers and suggests

that six in ten millennials are open to new job opportunities.

This research aims to provide relevant data to help employers with the increasing

turnover rate of millennials and generation z.”

With this skyrocketing figure the researcher conducted and concluded this study to

help in creating a more accepting working environment and to seek relevant actions from the

companies to stop this trend. The data is clear; Work-Life Balance, Flexible Time and

Respecting relationship are the most sought-after qualities of a good company. Aside from the

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competitive compensation package, these factors are highly considered by millennials and

generation z.

It is good to note that the respondents accept the fact that no company is perfect, just like

them it has its own flaws. But most of them reiterate that these three factors will not be needing a

lot of effort or cost to implement. Thus, making them a basic policy of a company.

The study concluded that it is high time for companies to formulate policies that will

address these issues and create an environment for their future and current employees that

respect personal time and space.

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 REFERENCES

Wells, B. (2011) Truly Understanding Millennials. Retrieved from

https://www.irmi.com/articles/expert-commentary/truly-understanding-

millennials#:~:text=In%20general%2C%20a%20Millennial%20is,Gen%20X%2Ders%2

2).

Parker, K. and Fry, R. (2018) Early Benchmarks Show ‘Post-Millennials’ on Track to Be Most

Diverse, Best-Educated Generation Yet. Retrieved from

https://www.pewresearch.org/social-trends/2018/11/15/early-benchmarks-show-post-

millennials-on-track-to-be-most-diverse-best-educated-generation-yet/

What Turnover Rate Says About Gen Z (2019, November 18) Retrieved from

https://integrity-asia.com/blog/2019/11/18/what-turnover-rate-says-about-gen-z/

Applying Maslow's Hierarchy of Needs in the Workplace (2020, November 24) Retrieved from

https://www.indeed.com/career-advice/career-development/maslows-hierarchy-of-needs

Gilbert, J. (2011) The Millennials: A new generation of employees, a new set of engagement

Policies. Retrieved from

https://iveybusinessjournal.com/publication/the-millennials-a-new-generation-of-

employees-a-new-set-of-engagement-policies/

Brant, K. K., & Castro, S. L. (2019). You can’t ignore millennials: Needed changes and a

new way forward in entitlement research.

[22]
Sauro, J. (2015) 5 Types of Qualitative Methods. Retrieved from

https://measuringu.com/qual-methods/

Chambers, T. (2013) Qualitative Research in Corporate Communication. Retrieved from

https://blogs.baruch.cuny.edu/com9640epstein/?p=543#:~:text=Phenomenology%20is%2

0an%20approach%20to,experience%20within%20a%20particular%20group.&text=Thro ugh

%20this%20process%20the%20researcher,profound%20understanding%20of%20the

%20phenomenon.

8.3 Quantitative research questions, Retrived from

https://scientificinquiryinsocialwork.pressbooks.com/chapter/8-3-quantitative-research-

questions/

Subin, S. (2021) Millennials, Gen Z are job-hopping, but contrary to popular belief, maybe not

Enough. Retrieved from

https://www.cnbc.com/2021/02/28/millennials-gen-z-are-job-hopping-but-maybe-not-

enough.html#:~:text=Workers%20have%20been%20job%20hopping,pace%20compared

%20to%20last%20year.

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