A decline in job mobility has led to pay stagnation for Millennials, according to think tank the Resolution Foundation.
The Study, Work, Progress, Repeat? report by the Resolution Foundation’s Intergenerational Commission revealed that younger employees are missing out on pay rises of up to 15% by staying with their employers.
This undermines commonly-held perceptions that Millennials are more likely to job hop than older workers.
Attending the report's launch yesterday, work and pensions minister Damian Hinds commented: “In some ways I think [the report] runs counter to prevailing views that many people would have about young people in the labour market and their propensity, for example, to stay in one job versus to move around between different jobs.”
Also speaking at the launch, Laura Gardiner, senior policy analyst at the Resolution Foundation, said: “The [financial] crisis is a big explainer of this progression slowdown but we’ve got more things to look at and we need to think about whether these slowdown effects are unwinding to the extent that they should be.”
Explaining the report's findings, Gardiner added that someone born in the mid-80s is half as likely to move job at the age of 25 as someone born a decade earlier. The report described this as particularly damaging given that this is the age when workers are likely to get the biggest pay rises.
The report also revealed a significant reduction in pay rises related to tenure. While Millennials are staying put in jobs they are not being rewarded for their loyalty, the research suggests.
“It used to be that when you stayed with your employer for more than five years around the age of 30 you would get a pay rise of about 4% a year – now you get around zero in real terms,” explained Gardiner.
Also on the panel was Bobby Duffy, managing director of Ipsos Mori. His organisation surveyed Millennials from 26 countries on their satisfaction across 11 different areas of their lives, including housing, crime, travel, and access to information and technology. Results showed that only 26% of respondents expected to have a more successful career than their parents.
The full results of the Ipsos Mori research will be published in April.
