Tenure for advancement
Investing in early talent is imperative for companies planning for the future, allowing investment in retention while cutting costs in the short and long term.
A 2022 Handshake survey of 1,563 students and recent grads found that on average, Gen Z workers plan to stay at a company for three years, but they’ll more than double that tenure to an average of 6.5 years if presented with growth and advancement opportunities. This longer tenure for early talent will directly translate into additional cost savings from not needing to hire and train new employees as frequently.
The cost savings of early talent
Retention and tenure are only part of why hiring early talent is an effective business strategy—hiring early talent also offers companies a cost-advantageous opportunity to invest in the future.
Recent graduates are paid less compared to workers with more experience as they may require on-the-job training before becoming as productive. As an example, according to the Radford Global Compensation Database, the compensation (base salary, bonus and equity) averages $126,008 for an entry-level software engineer, and jumps to $236,514 for someone considered a career employee (Level 3 out of 6).
When considering current demographic shifts which will make finding talent more difficult in the future, it is clear that Gen Z talent will be critical for companies that want to ensure continued success. Companies will need their skilled talent in order to embrace digital transformation—and, this kind of early talent is cost-effective.