Welcome Gen Z –But how far, how fast?

The emerging new segment of every workforce is an increasing cohort of Gen Z employees. And as with every generational shift, Gen Z have particular ways of thinking and requirements of their working life. Smart organisations keep a close track on their emerging cohorts – which by definition constitute the future of any company. This has been the case with Generation X (born 1964‒1984) and Generation Y (born 1985‒1995). Each generation has exhibited distinct and new attitudes, motivations and aspirations; and firms which openly embraced these changes have enhanced their likelihood of commercial success¹.

With the latest phase – Generation Z (born 1996 onwards) – the impact may be wider than just the Gen Z age-band itself. McKinsey says that “As global connectivity soars, generational shifts could come to play a more important role in setting behaviour than socioeconomic differences do. Young people have become a potent influence on people of all ages and incomes, as well as on the way those people consume and relate to brands.”

In any event, Gen Z in the workforce is roughly speaking aged between 18 and 27. These young colleagues have moved through their first job (or two, or three!) and we are starting to define how and where organisations need to adapt and morph to attract them – the valuable talent of today and the management and leadership pool of the future.

The first task is to understand the proportionate significance of Gen Z in the workforce today. A balanced view is necessary in any major organisation, which will probably be employing people from 16 to their 60s. The zeitgeist seems to favour a fantasy view of all truly dynamic businesses being start-ups run by people in their 20s and 30s. But this is indeed fantasy. Some of the most dynamic and imaginative minds in the world of global commerce are those close to retirement age. Lateral thinking and innovative genius is not purely the province of the young. Nevertheless, failing to accommodate the drivers and motivations of the (relatively) new Generation Z is just as much a recipe for failure and commercial atrophy. The accompanying graphic from Deloitte² shows very clearly that failure to recognise the needs of Gen Z will mean a serious drain of young talent.

In fact, with both salary and work-life balance front and centre, Gen Z’ers also come with another stand-out characteristic: they are the cohort most likely to look elsewhere if they feel unsatisfied at work. One 2021 study found that 77% of the Gen Z surveyed were on the hunt for a new job³. Of millennials at the same stage in their careers, only 38% of those surveyed back in 2011 said they were on the lookout for opportunities⁴.

Based on figures from the Office for National Statistics⁵, a quick bit of maths tells us that in 2022-23, 14%-15% of the UK workforce were Gen Z. That’s already a significant proportion. So, what demands and motivations does this generation have that may influence ways of working, drivers of recruitment and encouragers of retention?

Research from Facebook⁶ – an in-depth look at Gen Z – looked at three areas: identity, activism and commerce. In terms of identity, when this audience were asked to describe themselves, the three key words used were: ‘introvert’, ‘fast learner’ and ‘driven’. Perhaps this is because there’s more of an opportunity to thrive as an introvert thanks to powerful communication tools – an opportunity previous generations had not grown up with. A desire to constantly become better informed is said by the report to be the result, with a majority of Gen Z globally believing it is important to develop new skills throughout life (79%) and stay well-informed about things (77%).

When it comes to activism, the pandemic has also heightened this generation’s passion for sustainability: globally, they are 1.2 times more likely than average to say it has become more important to reduce their environmental impact. Yet they also believe in corporate action too. 69% in the UK expect brands to make their stances on social and political issues known publicly. And 79% say it has become more important for companies to behave sustainably. This also affects attitudes to diversity. Nearly three-quarters of Gen Z globally want to see more diversity in advertising – with only 12% feeling represented in the advertising they watch or see⁷.

Generation Z is often portrayed as being the most socially and environmentally-conscious generation. Although Mintel’s data⁸ shows that this generation does care deeply about these issues, it also shows that Gen Zs themselves don’t necessarily see this as their defining characteristic. They seem more likely to view themselves as creative, ambitious or adventurous – as opposed to an overwhelming focus on ethicality.

When it comes to Gen Z’s view of business, there is some scepticism about ethical standards. More than two thirds (72%) of millennials and 58% of Gen Zs fear businesses commitment to helping combat climate change will be less of a priority for leaders than dealing with the challenges brought on by the pandemic⁹.

In the UK, only 43% of millennials and 38% of Gen Zs think business is “having a positive impact on society”. Meanwhile, 35% of UK millennials and 39% of Gen Zs have already made decisions over the last two or three years about the types of work they are prepared to do and the types of organisation they are happy to work for, based on their own ethical standards and belief systems. Overall, 16% of UK millennials and 15% of Gen Zs have boycotted a company because of its views or behaviours. Meanwhile, 25% of UK millennials and 28% of Gen Zs have tried to educate and change the views of those around them¹⁰.

Having observed older workers experience burnout, time poverty and economic uncertainty at the coalface, Gen Z is demanding more from workplaces, according to the BBC¹¹: “bigger pay cheques, more time off, the flexibility to work remotely and greater social and environmental responsibility”. Many of these values were also hallmarks of the millennial generation¹², but for Gen Z, they’ve become expectations – and they appear to be willing to walk away from employers if their needs are not met. It may sound like Gen Z seem overly ‘entitled’; but they are willing to work hard for the right employer. Yet if the lemon isn’t worth the squeeze, they’ll leave and find an employer who is willing to meet their criteria.

Given all these factors and attitudes from Gen Z, what principles can organisations follow to attract and retain the up-and-coming young talent? Various commentators¹³ recommend the following steps:

• Treat sustainability as a competitive edge and not a compliance exercise. Gen Z care deeply about the reputation and activities of their employers.
• Make a genuine commitment to equality and be transparent about progress. This is the new normal for Gen Z. In fact, it should be for us all. What organisation would not want to draw on the entire talent pool?
• Move at the speed of societal change: Businesses should talk transparently about their societal commitments and their journey to achieving them. Admitting to currently falling short is okay as long as it is backed up by a clear plan for improving.
• Be technology literate. Generation Z enjoy a smooth user experience in all aspects of their digital lives, and in line with this, they expect to work with modern technology in the workplace.
• Offer learning experiences: Whether through informal learning, workplace mentoring, or structured training programmes, Gen Z expect to regularly learn and develop.
• Demand precise targets: Clear goals are important to Gen Z. One in four prefer managers to set clear goals up front, and one in five are motivated by a defined path to career advancement.

Gen Z is the emerging part of the workforce, and attracting, fostering and retaining Gen Z talent is critical to the future of any company. Surely the answer is to be ready to take risks and experiment, to actively engage with the expanding Gen Z talent within your organisation, asking them for feedback, supporting their ideas, and creating a culture that is inclusive. For instance, newer review techniques such as ‘reverse mentoring’ are something we now have fairly embedded at Siemens Financial Services, where the junior employee has a safe space in which to comment constructively on a senior colleague.

Yet a cohort representing just 14%-15% of the workforce is not yet the majority. A balanced view is required – multi-generational. To this point, research¹⁴ has found that across all five generations, there are more similarities than differences. Inclusive policy is required for all cohorts in the workforce.

Inclusivity is not about favouring one segment of the workforce, but embracing all. So act on the subject of Gen Z… but act proportionately.