Employee Satisfaction and Tenure

While working in a relatively large company the question of how to secure employee loyalty always pushes to the front of everyone’s mind. The hours that go into training an employee to fulfill a particular role represents a sizeable capital investment, so ensuring that your investment is happy and productive is important. I have for a long time assumed that employee satisfaction would have a direct positive relationship to employee tenure, however, data collected in a recent PayScale Survey seems to throw that notion on its head.

The PayScale survey places Google in the top 20 with a median tenure of 1.1 years (pretty low) but with a median pay of a whopping $107,000. The following quote is from a Bloomberg article that places the blame almost completely at the feet of Generation-Y.

Google is known for its rigorous entry testing: Potential new recruits are asked trick questions like "How many golf balls do you think will fit into a school bus?" The upside for the candidates is that, apart from the high salaries and epicurean perks, they get co-workers who are fun to interact with. The resulting environment appears to be a happy one: 84 percent of the Google workforce has a high level of job satisfaction, one of the highest percentages in the Fortune 500.

The low median tenure, however, is not just a statistical quirk. Technology companies that hire the smartest young people around all but guarantee themselves a high churn rate. A lack of employer loyalty is a defining feature of Generation Y. No matter how satisfied these highly marketable young minds may be, no matter how much they enjoy the free meals and hybrid car subsidies, they will jump ship as soon as they get bored or get a better offer elsewhere.

"It is a hot job market," says Bardaro. Tech companies overall have some of the highest median salaries in the Fortune 500, and some of the lowest employee tenures. Yahoo!, like Google, pays its average employee $107,000, compared to ExxonMobil's $97,700, yet the median employee tenure is 2.4 years at Yahoo! and 6.5 years at ExxonMobil, according to PayScale.

My personal belief here is that the technology field itself creates its own churn because of the nature of change inherent to it. This notion of change is generally in direct contrast to corporate needs for consistency and predictable repeatability. Regardless of the employee satisfaction there is always an element of “what is the new thing”, and that allure causes low tenure. Corporations like ExxonMobil do not have this constantly shifting environment that software service companies are faced with, and so tenure naturally goes up.