Retaining and recruiting Gen Z workers

Every smart employer knows to keep an eye out for any looming potential business challenges that sooner or later might throw a wrench into their ongoing performance. I want to bring one of those out into the open right now: the potential for losing your Gen Z workforce.

Despite any preconceived notions about Gen Z – young people born between 1997 and 2012 – Pew Research shows they present one of the most educated, ethnically diverse, and prevalent age groups in our history. “Digital Natives” (meaning no memory of a world before smartphones), they are more socially conscious, more entrepreneurial, avid gamers and music-goers. In addition, Gen Zers are less likely to drop out of high school and more likely to be enrolled in college than previous generations. (As of 2018, 57% were enrolled in a two- or four-year college, compared to 52% among Millennials in 2003 and 43% among Gen Xers in 1987.)

Still, 30% of Generation Zers say they considered taking a gap year after high school, hesitant to take on staggering debt to cover the costs of higher education. With a degree in hand or not, 76% describe themselves as capable of driving their own careers, while 54% aspire to become individual entrepreneurs. That is an independent streak found not nearly as often among older workers.

Just to drive home their unique outlook on careers, Business Insider recently reported on a Randstad study that discovered nearly half of Generation Z workers would prefer being unemployed than stuck in a job they didn’t like.

With echoes of the “Great Resignation” still fresh in many employers’ memory, this is a widely shared sentiment among young workers that should be carefully considered. It indicates that the traditional power dynamic between employer and the workforce is quickly evolving.

Why you need Gen Z among your workforce

Businesses and their HR leaders understand this younger generation is critical to a thriving, fresh-thinking, ever-expanding operation. Infused with original perspectives and insights, as well as valuable skills, Generation Zers bring with them new levels of digital competence, dedication, and drive to achieve goals. Employers need this energy and creative input to remain dynamic and attractive to potential customers, as well as to ensure they stay on top of new movements and trends.

While they currently make up more than 1 in 4 (27%) of the overall population, by 2030 Generation Z is projected to represent 33% of the U.S. workforce, according to CRN Magazine. That will surpass most working age groups, including Generation X (born 1965 to 1980) at 25% and baby boomers (born 1955 to 1964) at just 1.5%. Working Gen Zers are fast approaching Millennials (born 1981-1996), who are expected by then to comprise 41% of the labor force.

Let’s face it: Generation Z is the prime U.S. workforce of the near future. In an ever-competitive landscape for top talent, and with unemployment currently at 3.5% despite high inflation and fears of recession, employers should be looking at all available tools and strategies that can help them recruit and retain the best candidates available from this fast-growing talent pool.

Beware of “standard practices”

Even the phrase “standard practices” is something many Gen Zers might smirk at. They are not typically the type of employees who accept being told what to do and without being given a solid, reasonable explanation. In a business era no longer beholden to regular in-office hours, assigned desks and set bi-hourly lunchroom breaks, they should not be subjected to arbitrary rules, particularly for beginning or newly arrived employees.

While there can be a structured chain-of-command, regular communication with senior leadership is not something to withhold. One well-known axiom says, “People don’t quit companies – they quit bosses.” This alerts managers of the importance of connecting with employees more often, especially remote workers. Helping younger workers understand business challenges and realities, as well as celebrating key earnings and achieved goals can keep them engaged with their work, knowing they have a role in the organization’s ongoing success.

Because of commonly shared values and life philosophies, Gen Zers relate much more easily to Millennial-age direct managers and less to their Gen X predecessors. But this doesn’t mean they cannot successfully interact and team with older colleagues. Reflecting both an ease engaging with technology and their heightened level of social compassion, 77% of Gen Zers are willing to share their skills and serve as technology mentors to others in the workplace.

So do not be afraid to mix and assign generations of employees to joint projects where across-the-board communication and cooperative effort can lead to team success.

Finally, do not ignore social media. As top generational consumers in this area, 70% of prospective Gen Z employees look at company reviews on sites such as Glassdoor, and 69% are more likely to apply to a company that manages its brand well. Examples of a strong Diversity, Equity and Inclusion program go a long way with this group. So, invest in your online brand management — it could bring you the employee base you’re hoping to attract.

Best practices to help attract and retain Gen Z talent

We’ve talked about the Gen Z population, why you need them, and what’s top of mind for them. Now, let’s talk about how to get them in the door.

It has been well documented that employee turnover is both costly and disruptive. SHRM (Society for Human Resource Management) reported in January this year that on average it costs a company six to nine months of an employee’s salary to replace him or her. For an employee making $50K a year, that would require $25K – $37.5K in further investment. That is a pretty staggering figure for recruiting and training costs surrounding just one employee.

Clearly, engaging and empowering employees, particularly Gen Z workers, is both a productive and cost-effective practice. Here are several tips to help build your acquisition and retention strategy:

• Know who is “quietly quitting” – Well before an employee turns in a resignation, they have disengaged at work. A whopping 55% of employees born after 1989 are not engaged, according to Gallup research. This results in lost productivity and can even become contagious among other workers. Check in with your employees regularly, at least once per week. Listen for younger workers’ stress struggles. Train managers on how to recognize anxiety and abnormal stress clues, and how to empathize and look for solutions. Consider performing “stay interviews” – discussions with employees before they submit their resignation about what’s on their mind, what’s making them happy, and what may not be making them happy.

• Underscore purpose and individual value – Every worker wants to know their daily contribution to the business is important and valuable toward reaching success. But when is the last time you shared that with your junior staff? Do you know what it is they want most to accomplish in their career goals? Discuss with them why they are singularly appreciated and necessary to help ensure your company meets its goals. A shared mission and vision can help grow and sustain engagement, especially when assignments may seem repetitive or cumbersome.

• Recognize small wins that lead to big wins – Identify and (appropriately) praise solid work accomplishments as well as big project completions. Office recognition, awards and even bonuses when possible are wonderful tools to compensate employees who produce outstanding work. But regular words of affirmation also can go a long way in keeping workers satisfied on the job, particularly with duties and tasks that do not lead to big payoffs. Point out to Gen Zers what behaviors and values you are witnessing and how much they’re appreciated, particularly by senior leadership.

• Offer more career management – At a time when turnover remains high, employers should try to help younger employees identify and invest in their best careers. Ninety-four percent of employees would stay at a job longer if it offered career development, including platforms for training, webinars, educational materials, and roadmaps for how to qualify for advancing from one position to another, higher one. This is something all employees would benefit from, but primarily younger ones at the beginning of their careers. Solid professional training can foster increased company value as the workforce continues to be updated and refreshed with latest industry practices and technologies.

• Invest in financial wellness services for your employees – Financial stress is the leading complaint among U.S. employees of all generations, but particularly among Generation Z workers. Eighty-one percent of U.S. Gen Z adults consider money their biggest stress factor. With inflation surpassing 8% and average merit increases wedged between 2-3%, these employees now expect their employer to offer financial voluntary benefits that help support the practical needs of personal financial management.

Employer response to this demand is already beginning to take root. The Purchasing Power State of Employee Finances: 2022 Report shows employers have begun to heed this call with new voluntary benefits offerings that provide useful financial support. They include:

• Employee purchase program (21%)
• Financial counseling (20%)
• Medical deductible financing (18%)
• Bill payment programs (17%)

Benefit Brokers presenting a full menu of financial wellness voluntary benefits can serve as a lifeline to employers looking to appeal to and retain their most sensitive employee base. As valued consultants and counselors to HR leaders, their recommendations can transform a benefits portfolio to meet critical needs while significantly changing the lives of those on the payroll.

Read more: Meet Gen Z: How to reach them with new tools and new approaches

Beyond these listed benefit strategies, employers also need to pay attention to Generation Z employee increasing requests for (A) more generous pay, (B) flexibility with daily work hours and/or a compressed work week, (C) true “time off from work” that doesn’t include late night and weekend emails from managers, and (D) a universal hybrid work experience — 46% of incoming employees from college say this is the most important factor for them.

Macro-economic trends on the horizon will no doubt continue to unfold. Yet companies will continue to succeed no matter the outcome when they meet and exceed the expectations of current and potential workers by offering a thriving, responsive work environment made complete with a robust and comprehensive benefits package.

Mike Wilbert, Chief Revenue Officer, Purchasing Power, LLC