As employers across the United States are experiencing labor shortages due to the Great Resignation and older employees retiring from the workforce, Gen-Z is becoming critical in filling in the gaps. Zoomers, known for being digital natives, diverse, and highly educated, are entering the workforce with their own unique expectations of their employers.
Recent research from LinkedIn is showing that if these expectations aren’t met, Gen-Zers have no issue with quitting their jobs in search of better work. Gen-Z is changing jobs at a rate 134 percent higher than in 2019, which is significantly higher than millennials, who are switching jobs only at a rate of 24 percent higher, and baby boomers, who are actually switching jobs at a slower rate than in 2019. Gen-Zers are not planning on slowing down their job-hopping either. About 25 percent of Gen-Zers say they hope or plan to leave their jobs within the next six months, and 75 percent of Gen-Zers are willing to switch their career paths entirely and look for jobs in new industries. While these numbers may be attributed to Gen-Z being early in their careers and the overall culture of employees of all ages being more willing to leave their jobs, there are takeaways about the way Gen-Z navigates the workplace and possible implications for the future.
In only eight years, Gen-Z is set to make up a third of the workforce, so it’s critical that companies implement cultural changes that will help them be successful in the war for talent. With Gen-Z’s willingness to change not only their jobs but entire career paths, it will be a challenge for employers to retain all young employees—but especially underrepresented ones. Organizations have started developing internal talent pipelines with underrepresented employees to help advance representation and inclusion at senior levels as a best practice for Diversity, Equity, and Inclusion (DEI). If companies become a revolving door for talent, it is going to be nearly impossible to maintain a pipeline. Employers already have a hard enough time retaining their underrepresented employees, and it’s going to become a bigger issue if this new generation is more willing to leave a job than any generation before them.
“The current research about Gen-Z’s behavior in the workforce is solidifying what we have known to be true for some time now. The relationship between employees and employers has significantly changed from when our parents (and now grandparents) were working,” noted Megan Pierouchakos, Senior Director of Diversity Best Practices at Seramount. “No longer are companies offering pensions rewarding long tenures, nor are workers expecting to spend their entire career working in one company, let alone profession.” With the projection that by 2027 86.5 million people (approximately 50 percent of the US workforce) will be freelancers or contractors (Gen-Z represents nearly half of that population), companies will need to continue to be innovative in how they meet talent where it is, as well as provide opportunities for re-skilling. Companies should ask themselves: What is our value proposition? How do we attract all demographics to our organization in authentic ways? Do we offer hybrid, remote, and technologically savvy ways for employees to interact and add value? Is our culture inclusive on all fronts: in person, hybrid, and remote? “Adopting these best practices for next-gen talent is often a windfall for existing employees within organizations. Seramount’s Assess360 tool can help organizations get ahead of the curve so that they are ready to welcome more Gen-Z employees as they continue to enter into the labor market,” added Pierouchakos.
Gen-Z is the most racially and ethnically diverse generation in US history, so an emphasis on DEI is an absolute must. A reported 80 percent of Gen-Zers think it is important for brands to address DEI, and 53 percent want to see increased diversity in senior leadership of corporations. Furthermore, Gen-Z’s expectations in the workplace are values-driven and aligned with their personal morals. Fifty-four percent of Gen-Zers would refuse to work for a company that did not share their values. Seramount’s most recent Insights Paper, “ESG and DEI: The New Indicator of Employee, Stakeholder Satisfaction,” provides detailed analysis on why and how companies should develop strong social responsibility policies and practices.
Many Gen-Z employees started their careers during the COVID-19 pandemic, working from home. At this point, younger employees have seen what companies are able to do, so it is not likely that Gen-Z is going to want to give up flexibility. The job search company Handshake, which connects college students with potential employers, reported that while only 7 percent of all full-time jobs posted through their app were remote, they generated 17 percent of all applications. The company also found that “remote” was the top keyword search in 2021, with the runner-up keyword searched only half as many times.
A reported 81 percent of Gen-Z adults considered money to be their biggest stressor, according to the American Psychological Association. As a result of the pandemic, younger employees have been pushed further into financial insecurity, since many were working in high-risk service sector industries that were shut down. Gen-Z was the generation hardest hit by job losses in 2020, losing about 11 percent of their jobs, which was almost twice the national average. This is critical when thinking about the cost of education. Gen-Z is attending college at higher rates than any other generation, but with that comes student loan debt. Three out of four Gen-Zers will have to pay for student loans, with most owing between $25,000 and $50,000. Consider financial benefits your company should implement or expand, such as tuition reimbursement or student loan assistance, which can ease the financial burden on young employees.
More than ever, there is a business imperative for employers to ensure the mental health and well-being of their employees. This includes attracting young talent. Forty-six percent of Gen-Z employees say their mental well-being worsened during the pandemic, and 46 percent of Gen-Zers feel anxious or stressed all of the time but are hesitant to vocalize these issues in their workplaces. Young employees are much more willing to stay at a job where they feel their employers care about them. Eighty-six percent of employees aged 18 to 29 agreed they would be more likely to stay at a company that provides high-quality resources for them to care for their mental health.
As more Zoomers enter the workforce, it is critical that companies examine their culture and benefit offerings to meet their needs. Creating a workplace for the next generation will not only help attract and retain future workers but also foster DEI and social impact both within and outside of the organization.
If you are interested in assessing your company culture, contact us for information on Seramount Consulting’s Employee Voice Sessions, which combine the power of focus groups, quantitative surveys, and interview methodologies in a highly engaging, safe, anonymous, and solutions-oriented forum.