- Generation Z already makes up 24% of the global workforce, and that's only going to grow larger in the coming years.
- These digital-native workers are the most diverse group ever to enter the workforce.
- Companies must show they are diverse, environmentally conscious, and on board with inclusion if they want to recruit and retain Gen Z workers.
- This article is for small business owners who have Gen Z workers on their payroll or are looking to recruit and retain them.
Most of the attention may be on millennials – a generation that has eclipsed even the baby boomers in size – but Generation Z is starting to be noticed as it enters the workforce. There's good reason for this: According to ManpowerGroup, Gen Z will make up 24% of the global workforce by the end of this year. By 2030, that figure will jump to 30%. As it stands, 9 million Gen Zers are contributing to businesses across the U.S.
These digital natives are the most diverse group to enter the workforce, which means recruiting, retaining and managing them requires a unique approach. But before your small business can do that, it is important to learn what makes Gen Z tick.
Who is Generation Z?
Generation Z, which encompasses those born roughly between 1996 and 2015, is coming of age in tumultuous times. They witnessed the Great Recession and what it did to their parents' jobs and homes. They're living through a global pandemic that has led to record unemployment, an environmental crisis that threatens the globe, and political and civil unrest. This impacts how they approach work and life.
Warren Wright, president of Coaching Millennials, said Gen Zers want to work with organizations that can provide them security and stability.
"They are growing up in a time of chaos, an age of disruption," Wright told Business News Daily. "As a result of that, they are very cautious."
Generation Z is also a highly educated and technologically savvy group. The younger ones have no memory of life before smartphones and mobile apps. Because they are so racially and ethnically diverse, they demand equality for everyone. According to a Generation Z survey by Deloitte, Gen Zers will turn down a job if diversity and inclusion aren't front and center at the company.
"One thing is loud and clear: Generation Z is extraordinarily socially aware to the issues of race, equality, climate and gender," Wright said. "They are very much an activist generation. They expect leadership to be authentic about their beliefs."
Like the millennials before them, Generation Z cares a lot about changing the world. They have a sense of purpose and want to align with businesses and employers that match their values and ideals. They are the ones using public transportation, eating less meat and avoiding fast fashion to help the environment. Gen Z is also driving positive change in their communities.
"They are not afraid to strengthen or cut ties with businesses that don't match their personal values," said Christine Selph, global eminence and engagement leader at Deloitte. "During the pandemic, 70% of Generation Z made an extra effort to buy from local businesses."
Key takeaway: Gen Zers were born in tumultuous times and crave stability. As the most diverse generation, they care a lot about inclusion, the environment and social justice.
What characteristics define Gen Z?
Without a doubt, Generation Z has lived through unrestful times in their formative years, from the Great Recession to the #MeToo and social justice movements. As a result, they bring distinct characteristics to the workplace.
They're tech savvy.
Gen Zers take their smartphones everywhere, use social media to its full potential, and expect to work for companies that prioritize technology. Unsurprisingly, they tend to be drawn to the tech industry. According to a Dell Technologies study of 12,000 Gen Z individuals, 80% aspire to work with innovative technology, while 91% said technology would be the deciding factor between two similar jobs.
That doesn't mean they don't care about fields where they can help the greater good. The Deloitte survey found they're also drawn to education and healthcare.
Career development is a priority for them.
Like millennials, Generation Z is an independent group. But while millennials are drawn to entrepreneurship and startups, Generation Z prefers to move up the corporate ladder. Workers in this age group want challenges and career development without too much risk. A survey by InsideOut Development found that 40% of Gen Zs want jobs with security and stability. Companies that can give them both an entrepreneurial environment and stability stand to win.
They want detailed instruction.
Gen Zers expect a lot of instruction from their managers. They grew up watching YouTube videos to learn how to do anything. They had Google and hovering parents to guide them through their assignments.
"You need to be more explicit, and you need to use technology to do that," Wright said. "Slack and Teams are there for a reason – to help you communicate and clarify goals. The more detailed you are in your instructions and what needs to be accomplished, the better off you'll be."
Diversity is their gamebreaker.
Generation Z is the most diverse group to enter the workforce yet – in terms of not just race, but also gender. As a result, they expect diversity to be a top priority for their employers. That means things like gender-neutral bathrooms, equal pay for equal work, and support for racial inclusion movements such as Black Lives Matter. According to Deloitte, Gen Z is the most likely group to have individuals who identify as nonbinary.
"It's imperative employers show their commitment to making the world a better place," Selph said. "Since we know Gen Z cares about societal impact and social justice, companies need to provide opportunities for them to engage in their communities and prioritize diversity and inclusion."
They question everything.
Against the backdrop of the Great Recession, the global health and climate crises, and societal unrest, it's not surprising that Gen Z is more suspicious than older generations. They are cautious and skeptical, and aren't afraid to question everything and everyone, including their managers. They are also adept at deciphering between what's fake and what's true. They have better skills and intellect in that area than the older generations, according to Wright. A recent Axios survey backs up that assessment, finding that 83% of Gen Zers get their news from social media or other online sources, but only 7% think it's trustworthy.
Mental health is top of mind.
Generation Z workers have a lot of reasons to be stressed out, from the high unemployment rate to the cost of a college degree. Another recent Deloitte survey found that 48% of Gen Zers and 44% of millennials felt stressed or anxious all or most of the time. It's no wonder Gen Zers care a lot about their mental health and want to work for employers who care about it too.
"Employers who have a pulse on the mental health needs of employees are the ones that win the talent war," Selph said. [Read related article: How to Monitor and Support Employee Mental Health]
Key takeaway: As a general group, Gen Z employees want to work with companies that embrace tech as much as they do, give detailed instructions for assignments, have diverse and inclusive environments, and care about their mental health.
What are the differences in Gen Z vs. millennials?
Gen Zers and millennials have similar qualities, but there are key differences that affect the way they do their jobs.
Gen Z values stability over risk.
Both Generation Z and millennials value their independence, but Gen Z favors a more subtle approach. Instead of joining a startup or launching their own businesses, Gen Zers generally prefer to work at companies that will help them advance their careers.
"[Gen Zers] are the largest group of unemployed [workers] of all generations," Wright said. "Millennials want purpose and a voice; Gen Z really want practical skills. They can't afford not to be practical."
Gen Z is even more tech savvy.
Millennials workers may not have been born joined at the hip with technology, but they do appreciate companies that embrace smartphones, cloud-based computing and collaboration apps. The digital-native Gen Zers, on the other hand, expect it. Many of them don't even remember life before Snapchat, YouTube and TikTok.
"If you ask Gen Z how to change a tire on a car, they are more likely to pop into a YouTube video and bring the screen out to the car," said Jaime Klein, CEO of Inspire Human Resources. "This is a generation that takes great signals from emojis."
Gen Zers aren't afraid to fail.
Millennials have a reputation as the trophy generation that grew up with rewards for even a little effort. That's not the case for Gen Z. They have seen their parents struggle and recover, and they understand that failure isn't the end. According to an EY survey of Gen Zers, 80% view failure as a way to be more innovative.
Key takeaway: Generation Z and millennials are both independent, but Gen Zers want to grow with a company that can give them stability. They aren't afraid to fail and are more tech savvy than millennials.
How do you adapt your culture to appeal to Generation Z?
To recruit and retain Generation Z workers, companies must adapt and transform their cultures. It starts with leading by example, incorporating the values Gen Z holds near and dear.
Take their need to improve the world for starters. A diverse workforce from the top down, equal pay and an environmentally friendly mission all appeal to Generation Z. Companies can't get away with just paying these issues lip service with this group.
"It's important they work with a values-based organization that is very much inclusive," Klein said. "This is such a big thing for Generation Z, coming at a time when they are more woke."
Gen Zers may not need constant recognition for a job well done, but they do want to be heard. Employers need to engage with their younger workers, paying close attention to see what issues really matter to them. It's also incumbent on employers to provide the tools and training to help Gen Zers succeed, Selph said.
Retaining Gen Z employees might be easier in times of economic uncertainty, but this group ultimately stays with an organization based on the environment the employer creates. The good news is that companies are listening and responding.
"This is the first year both millennial and Gen Z [employees] are not inclined to leave a company in two years," Selph said. She pointed to the Deloitte survey, in which 71% of the Gen Z respondents said companies are doing a good job of creating diverse and inclusive work environments.
"Employers have started to incorporate some of the things millennials and Gen Z have been asking for over the past few years," Selph said.
Key takeaway: Companies that provide the environment Gen Z craves will receive loyalty in return. That means embracing diversity and inclusion in the office and the C-suite, giving them the tools and training to succeed, and empowering them to make a difference in their communities.