How will the newest workforce population change what we know?
A new workforce is upon us. According to the World Economic Forum, Generation Z will make up a little over a quarter of the workforce in OECD countries and a third of the total global population by 2025. Gen Z, defined as people born around 1996 through 2012, is also the most diverse generation in the U.S.
Raised in a completely digital era, Gen Z has a different set of priorities from previous workforce generations that will influence how companies and organizations build internal culture and attract and retain talent. Entering the workforce during times of recession, unprecedented student loans, and a worldwide pandemic has affected how Gen Z approach work and what they expect from their employers.
The results are quite different compared to past generations of workers, and companies will have to think of how to reorganize company culture, benefits, and even their structured work week as Gen Z join the workforce. Here are four considerations that employers will need to take seriously for engaging with the newest generation of workers.
Mental Health Support
Mental health is crucial for Gen Z workers. A study by Deloitte found that 46% of Gen Z respondents say they are stressed or anxious all or most of the time, 8% higher than millennials surveyed. Respondents said that workplace stressors such as their workload, poor work-life balance, and an inability to be themselves at work are contributing to their anxiety. Increased access to mental health resources without stigma and resources to reduce burnout that are well integrated into company culture are key for HR leaders to understand when it comes to Gen Z workers.
Gen Z value flexibility over other workplace benefits. In the same Deloitte study, 75% of Gen Z responders said they would prefer to split their time between remote and on-site working or work entirely from home. When asked what initiatives would be most effective in fostering better work-life balance, the consensus was overwhelming: 17% of Gen Z respondents said flexible working hours, 13% said a reduced work week, and 12% said remote work. If implemented well, a hybrid work policy will be essential to retaining Gen Z talent. Gen Z sees flexibility as key to reducing stress-related work problems and thus a mental health benefit as well as a valued way of working.
With a rapidly changing digital world, Gen Zers don’t want to be left behind. Implementing training and/or reskilling programs can be an important way of engaging with and retaining Gen Z talent. Glint’s 2021 Employee Wellbeing Report found that “opportunities to learn and grow” was the No. 1 driver for work culture in 2020. Changing hiring processes could also be crucial to engaging with the Gen Z workforce. Since 2017, companies including IBM have pledged to make high-salary jobs more accessible to those without college degrees, focusing on skills-based hiring rather than credentials. Employers willing to hire workers without four-year college degrees for positions that traditionally required a college degree could open up an additional 1.4 million jobs over the next five years, according to the research firm The Burning Glass Institute. A hybrid work culture could lead to employees feeling disconnected from their peers and from mentorship opportunities, so companies will have to strategize how to make employees feel connected, provide proper training opportunities, and integrate these initiatives with a flexible work policy.
Contrary to popular belief, Gen Z workers are fine with working for corporations or taking a corporate job. However, Gen Z workers expect that the companies they work for will reflect their own values. Companies that place a priority on environmental, social, and governance (ESG) issues in particular are esteemed in the eyes of the Gen Z workforce. A 2022 survey from Bupa found that 31% of Gen Z respondents would turn down roles in companies with poor environmental, social, and corporate governance (ESG) credentials while 54% would take a pay cut to work for a business that reflects their ethics. Companies interested in engaging with Gen Z talent will have to take their ESG commitments seriously and think about how they can best create a company culture that values diversity and sustainability-related values authentically.