The Boomer generation is retiring and as Gen Z starts to take over their portion of the workforce, employers are increasingly focusing on what they need to do to attract the right talent for this generation. Is it all about diversity and inclusion? Or does Gen Z have some surprising desires and aspirations that get lost under the headlines? Today we take a look at Gen Z and the changes we are likely to see in how we work.
From Boomer to Zoomer
We are now approaching what many have described as the ‘silver tsunami’ of the Baby Boomer generation – those born between 1946 and 1964 – retiring from the workforce. As these generational name tags tend to cover a large birth date time span, many Boomers have already retired. But the tail end of that generation is now about to exit the employment market.
Boomers are typically known for desiring ethical leadership, employee wellbeing and financial stability.
These major three priorities were shared by Generation X (born 1965-1979), while older Millennials (born around 1980-1988) made employee wellbeing the priority, followed by ethical leadership and then openness and transparency in leadership – according to Gallup polling from 2018.
In terms of younger Millennials and the older Gen Z grouped together (the 1989 to 2001 birth date segment), Gallup polls reveal employee wellbeing remains top priority, followed by ethical leadership, then followed by diversity and inclusion.
So, we can see that the diversity and inclusion piece sets the generation apart and hence the huge rise in debate around the topic and initiatives designed to make workplaces more diverse and more inclusive – with many companies appointing Chief Diversity and Inclusion Officers to their leadership teams.
The Gen Zs were born roughly between 1995 and 2012 (as per Pew Research categorisation) and according to Gallup’s 2021 figures, they will account for around 25% of the full time workforce in the US by 2025. In fact, Millennials and Gen Z combined already compose just under half the workforce in total. As the 2020s progress, Gen Z will enter the workforce in much larger numbers each year, so understanding what drives and inspires this generation is key.
The Gen Z World View
According to Deloitte and the Network of Executive Women (NEW), Gen Z are hyper-connected and mobile-orientated. They’ve not known a world without the internet, and most won’t have experienced a world without mobile phones either.
According to the US Bureau of Labor Statistics, older Gen Z’s already in the workforce (around 12% in 2020) primarily entered the retail, hospitality, and senior living industries. These were the hardest hit by the pandemic and lockdowns. In addition, online interviews and virtual working have been the hallmark of the start to their careers and, in many cases, of their degree experiences as well.
All of this has led to some interesting developments in how they view employment and their expectations.
The Gen Z Traits
According to LinkedIn’s Talent Blog, the six major Gen Z traits employers should consider are:
Tech-savvy. Gen Z are digital natives who grew up with social media giants like Facebook, Snapchat, and Twitter, and latterly Snapchat and Instagram. Social media is an important part of their lives.
Risk-aversion. Gen Z were kids or teens during the 2008 economic meltdown that globally affected the welfare of billions of people. They’re also starting work during a global pandemic and, most recently, a war in Europe. They crave stability, security and growth, working for something they believe in.
Flexible. This generation, more than any other, is accustomed to Googling things rather than asking for advice – it’s been an integral part of their homework assignments at school. And, due to the accommodations made to enable flexible working throughout the pandemic, they understand the alternatives to the traditional 9-to-5, office-based working practice. They want flexibility that allows them to work in their way.
Competition. Millennials have been noted for their team-work orientation, but Gen Z are prepared to compete a bit more. The experiences of the Global Recession gave them an understanding that money was important, and they’re prepared to work hard for financial reward and career progression – which of course stems back to that security ideal. But their contribution also needs to be recognised. The money and promotions alone are not enough.
Diversity and Inclusion. This is a generation that’s made itself known for being deeply invested in diversity and inclusion – regardless of gender, race, religion, physical ability etc.
Ethical. Gen Z cares about ESG values. They prefer ethical consumption, and they often avoid brands that are involved in scandals or that refuse to take a stand on issues they consider important. They are also vocal when brands come across as inauthentic – doing certain things simply for publicity, rather than as a genuine expression of value.
The Employer Response
Clearly, employers need to be mindful of these traits and look at whether they are attractive as employers to Gen Z, as well as the younger Millennial workforce still gainfully employed elsewhere. We’ve therefore tied the traits and the Gallup insights together under the three major headings – Wellbeing, Ethics and Meaning, and Diversity.
Wellbeing itself covers a host of different areas. Employee wellbeing isn’t simply about physical wellness programs. In fact, we can identify six areas that are directly or indirectly related to employee wellbeing:
Job Security. Last year, The ADP Research Institute found 39% of those Gen Z surveyed had lost their jobs, were furloughed, or suffered a temporary layoff during the pandemic, with 78% having had some impact on their professional lives. Gen Z has thus been forced to become the most agile group of employees. Around 36% have had to adapt to changing roles at work or taking on new jobs (perhaps not ones they’d hoped for) simply to get by, while 15% had been actively trying to move into industries that they considered more ‘future proof’. Gen Z were the most proactive about making career changes and doing what they could to seek out jobs with better pay or security. So being able to demonstrate some degree of security in terms of a role’s longevity and in employment strategies will be important when discussing opportunities with potential Gen Z hires.
Learning and Development. Gen Z want frank and open conversations about their career journeys, and they want a clear understanding of what learning and development opportunities are available. They tend to worry about their careers more than their elders and they have very high ambition and drive to improve. The conversations around this can also help to engender trust (in an authentically caring brand), while helping them to future-proof their skillsets – which can only be a good thing for employers as well. A 2018 LinkedIn survey of Gen Z revealed that Gen Z is very aware of the way the work landscape is changing — 62% believe technical hard skills are changing faster than ever and 59% don’t think their job will exist in the same form 20 years from now. Firms that can show they have invested in learning and skills development will be the winners here.
Technology. Closely linked to development is technology. While Dell Technologies’ recent survey found that Gen Z are highly tech savvy, deeply understand digital transformation, and are confident about their tech skills, they are less sure about their non-tech skills – especially their soft skills. After all, the lion’s share of their experience thus far has been online. Therefore, employers need to demonstrate a strong understanding of digital and strong back-end technology that shows a modern approach and will let Gen Z flourish (for example, a non-buggy application process is essential). But firms also need to show how they can harness Gen Z tech expertise across their own tech and social media, as well as providing them with L&D opportunities in non-tech essential areas. Brands also need to pay special attention to their online reputation, for example on Glassdoor.
Flexibility. Gen Z want the tech that enables them to work flexibly. However, they are also ready to work at the office. Dell’s survey found that 76% expected to learn on the job from co-workers rather than online. 50% preferred in-person communications, with just 11% through phone and 26% through messaging apps. 51% wanted to work as part of a team instead of independently. For employers, then, it’s about having the agility to allow employees to work fully flexibly. A week a home working alone or coming in to work in a team on a project – either being fine depending on the circumstances. The majority of Gen Z prefer having real, face-to-face communications with colleagues, placing a higher value on effectiveness than convenience.
Mental Wellbeing. Linked to flexibility is the idea of social inclusion. Some of the widest gaps between Gen Z and other generations are around the issues of psychological and emotional health. The American Psychological Association has identified Gen Z as the most stressed generation, attributed to growing up while the world has faced severe global challenges such as the pandemic, climate change, the great recession and political/racial turmoil. We are also in a time when it is no longer taboo to discuss mental wellness and we accept that most people need mental assistance at some point in their lives. According to the Carson College of Business Gen Z spotlight report, the shift to remote work in the wake of the pandemic had an adverse impact on mental health. While 34% of older workers complained about remote work, some 47% of younger workers reported that working from home had a negative impact on their mental wellbeing. So as well as flexible working opportunities, employers need to be able to show what mental and psychological wellbeing-oriented policies and assistance programmes they have.
Promotions and Feedback. Gen Z’s are competitive and driven to receive promotions and raises. But feeling seen and appreciated in the workplace is also very important. Many have had to work online without pre-pandemic professional experience to fall back on, so these ideas of being back in the workplace, working in teams, developing soft skills and being recognised for their contributions and achievements are very important. An EY survey found that 97% of Gen Z are receptive to receiving feedback on an ongoing basis — and are eager to know what they can do specifically to improve their performance and advance their careers. They know that failure is part of the development process. Pay is, of course, very important with Gen Z expecting a better minimum wage and increased hourly pay – pay they can at least live on properly.
Ethics & Meaning
Meaningful impact. The Deloitte/NEW study on millennials and Gen Zs found that younger employees remain deeply concerned about issues related to society and sustainability, such as climate change – and company policies around these issues help them to decide which businesses to support and align themselves with. They’re also concerned about issues like financial inequality, with around 50% of those surveyed thinking that business organisations fail to leave a positive impact on society. Gen Z expect bold action to address moral issues and they want to know that the work they are doing has a net positive impact on both humans and the natural world. This all needs to be included in firm’s ESG policies – which need to be at the core of the business, not simply platitudes to look up in a hidden part of their website and marketing collateral. Firms also need to be able to communicate their purpose in the world convincingly.
Business Ethics. 2020 was a record-breaking year for SEC fines and fines related to corporations. Combined with the many highly publicised fraud scandals of recent years, and indeed the Great Recession itself, Gen Z have grown up watching 24/7 rolling news on unethical behaviour. Gen Z needs to understand how ethics are actively promoted throughout the businesses they work in and what the safeguards are against malpractice.
Openness and Transparency. Gen Z places a strong emphasis on truth and authenticity. The top qualities they seek in leadership and management are honesty and integrity. This is also true of Millennials, who tend to take a ‘trust but verify’ approach to corporate messages, seeking out facts, data and third-party validation to feel confident in the leadership.The good news is that employee engagement has risen significantly over the past year. CHROs from the world's largest companies and organisations have pushed employee communications and engagement front and centre. Overall, companies that emphasise and communicate volunteering opportunities and a commitment to transparency and pay equity will absolutely stand out.
Diversity and Inclusion
The Deloitte/NEW survey found that Gen Z believe discrimination is widespread and a personal issue. Around 23% said they’ve felt discriminated against in their workplaces at some point, most commonly on the basis of ethnicity or race, but reasons also included socioeconomic status, physical or mental disability, sexual orientation, gender identification, and sex.
As attitudes to once previously hidden topics have relaxed, the working population has become more diverse with each generation. The Pew Research Center also highlighted changing immigration patterns in the US, which peaked in 2005 and then declined. There are now fewer Gen Zs than Millennials who are foreign-born, but a higher number who were born in the U.S. to immigrant parents.
Gen Z cares about working for diverse companies that provide fair, equal and open opportunities for pay rises and promotions. 77% of Gen Z interviewed by David and Jonah Stillman for their book
“Gen Z @ Work: How the Next Generation Is Transforming the Workplace” said a company’s level of diversity would affect their decision to work there.
Clearly, employers must create serious Diversity, Equity, Inclusion and Belonging (DEIB) initiatives, which should include:
Ensuring a diverse pool of candidates during the hiring process
Providing training on the importance and practice of DEIB initiatives
Working towards more diverse representation across their leadership teams
In conclusion, a work in progress
Hopefully this has provided a clearer picture of the expectations of Gen Z and how the workplace is changing at the tail end of the Boomer generation and the business end of Gen Z. There’s a lot to digest here, signifying some seismic changes that society has undergone over the last five years.
Really, what’s most important is that firms are open and honest about how they are changing and doing their best to address these issues (and come across as genuine and transparent) than to try and hide behind messages of how they’re getting it all right, which doesn’t come across as realistic.