Gen Z knows what they want from the future of work

Everything employers need to know about Gen Z in the workplace

December 6, 2021 2:47 PM

Gen Z may be the newest addition to the workforce, but they already know exactly what they want from their future employers.

Currently, Gen Z represents approximately 30% of the total global population, according to data from the World Economic Forum, and by 2025, the generation is predicted to make up 27% of the total workforce. That means it’s in employers’ best interest to find out what this new demographic of employee wants — fast.

“If the pandemic has taught employers anything, it's that the workforce and the economy can be overturned at any moment in ways we cannot control,” says Casey Welch, co-founder and CEO of workforce talent solution, Tallo. “Long gone are the days of just showing up on college campuses or career fairs only to hire employees who are in one day and out the next. Employers need to be thinking about the long run when it comes to building their future workforce.”

Pre-pandemic, employers believed that they could woo young talent with office perks such as bean bag chairs, ping pong tables and the promise of future corner offices. But in a post-COVID world, there’s been a monumental shift in what younger employees want from a workplace.

Gen Z was hard-hit by the pandemic: a large number graduated from high school and college during the crisis, seeing career prospects uncontrollably stunted; at the same time, these young workers are vastly over represented in industries such as restaurant and travel, according to the World Economic Forum, which experienced record-breaking layoffs and unemployment rates during the pandemic. As a result, members of Gen Z started to reconsider — and reimagine — their futures.

“It’s very hard to find good people, but keeping them engaged is an even greater challenge as Gen Z and younger generations are far pickier when it comes to employers,” says Lisa Trenchard, senior compensation manager at payroll software company Paylocity. “They’re not afraid to quit a position if they don’t receive adequate support, fair compensation, do not align with company values outside the office or are not given the ability to choose between in-office and remote work.”

How can employers woo this discerning generation? Industry experts spoke with EBN to share insight on five of the biggest lessons learned in 2021 about this young talent pool.

Diversity, equality and inclusion must matter

The rumors are true: Gen Z really does care about companies’ diversity, equality and inclusion initiatives, and they’re prepared to quit if an employer doesn’t meet their standards.

Despite just a fraction of Gen Z having entered the workforce full-time, 44% of those who’ve had a job reported feeling discriminated against in the workplace due to their race, ethnicity, gender identity or sexual orientation, according to a 2020 report conducted by Tallo. In June and July 2021, the percentage of respondents who have felt discriminated against went up to 48%. Thirty seven percent of Gen Z applicants who have applied for jobs in the past have decided not to apply to a place of work out of fear of not being accepted.

Read more:

Gen Z employees are vocal about diversity and inclusion — your company needs to be, too

“Despite increased media and societal focus on issues of civil rights over the past year, Gen Z’s experiences at their jobs don’t seem to be improving,” Welch says. “In fact, they’re getting worse — and this speaks to why DEI is so important to them.”

In a recent survey, 87% of Gen Zers reported that workplace DEI strategies were very important, and 86% of Gen Z workers would be interested in contributing to an organization's DEI strategy —but discovered after joining a company that their employer either did not have or did not prioritize those programs and resources.

“If companies don’t actively address Gen Z’s demand for meaningful implementation of DEI strategies in the workplace, they will ultimately lose the ability to attract and retain a large majority of early talent,” Welch says. “Which will, in the long run, have negative impacts on their future workforce development.”

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Gen Z workers dealing with high rates of harassment and discrimination

Still, Gen Z employees remain hopeful their employers can change — with their help.When asked how prepared Gen Z feel their current or future employers are to discuss topics around DEI only 20% feel negatively, according to Tallo. Fifty five percent believe their future employers are somewhat prepared and 25% believe their future employers are very prepared to tackle DEI issues.

“As recent Gen Z graduates continue to take the workforce by storm, employers have an exciting opportunity to reevaluate internal strategies to better align with their future employees’ expectations,” he says. “Listening to current and potential Gen Z candidates about how to advance DEI in the workplace is a great way to start.”

They expect pay to be transparent, fair — and fast

Only about one third of Gen Z are content with the amount of money they earn, according to

a survey

conducted by job search platform GoodHire. And in 2021, 81% of Gen Z adults considered money their biggest stress factor, according to the American Psychological Association, followed closely by the stress of finding work in the current economic climate.

“Gen Z has more access to pay information that has not been seen in prior generations, '' Trenchard says. “This unhappiness has been sparked by the fact that pay transparency, social media and other platforms educate workers on their value in the marketplace. Older generations simply didn’t have access to online information such as Glassdoor salaries — discovering your market value as an employee was far more challenging even just 10 years ago.”

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How employers can help Gen Z better understand and utilize their benefits

Additionally, more workers are transitioning from a 9-to-5 work schedule to a gig economy, which emphasizes short-term pay versus traditional total compensation packages that promote long-term incentives and benefits, according to Trenchard. And as the workforce evolves, so must the strategies to attract and retain them. For example, younger generations have shown they favor compensation tools such as on-demand or instant pay from an employer.

Flexible pay doesn’t just benefit employees — HR professionals have found it to be a key way to attract talent and eliminate administrative obstacles associated with traditional payroll models.

“The bigger idea in all of this is freedom,” Trenchard says. “Whether that be flexibility in compensation and benefits, or flexibility in working hours. Gen Z is very certain about their needs and what they want from their employers.”

Mental health is a long-term priority

Just 45% of Gen Zers report that their mental health is very good or excellent, according to a 2020 report by the American Psychological Association. Comparatively, all other generational groups fared much better on this statistic — millennials (56%), Gen Xers (51%) and Boomers (70%). And while there are many factors at play as to why young workers struggle the most with their mental health, the pandemic remains one of the leading causes.

One in four 18-24 year olds said that they have thought about self harm during the pandemic, and more than half reported at least one negative mental health symptom like depression or anxiety, according to a study conducted by the Center for Disease Control.

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COVID mental health is a disaster for Gen Z and millennial employees

“More and more, employees expect employers to consider their whole selves and the roles they play outside of the office,” says Sammy Courtright, founder of workforce engagement platform Ten Spot. “The blurred lines of work and life have made it impossible to separate the two, and younger workers are no longer trying to compartmentalize their lives.”

That means employers are going to have to offer more comprehensive wellness packages that encompass mental, physical, financial and social wellness, according to Courtright. It also means that employers need to embrace flexible work hours and realign expectations now that so many employees are working at home the majority of the time.

To achieve this, many companies are including telehealth options in their benefits packages — seeing as Gen Z is most likely to want and use mental health applications — as well as considering marketplace approaches or offering a stipend so employees can be reimbursed for any ‘wellness’ service they choose to use on their own.

Read more:

COVID-19 is taking a toll on Gen-Z’s mental health

“Mental health has always been a really important topic to address,” Courtright says. “But finally, because of the pandemic, it’s getting the much-needed attention it deserves. We have younger workers to thank for that because they have seen — and perhaps already experienced — the burnout, stress and anxiety that comes with balancing work, life and personal health during a global pandemic.”

Benefits aside, employers will have to work to create a connected, supportive virtual workspace for this generation of talent. Many younger workers rely on the workplace to provide them with opportunities for socialization; 62% of Gen Z workers are enthusiastic about the positive impact virtual events had on company culture (and their own mental health) during the pandemic, according to a Ten Spot survey.

Having grown up in the era of social media and social sharing, Gen Z feels empowered to speak up about their emotional needs, perhaps more than any generation before them.

“It’s safe to say that even before the pandemic, mental health was going to be more important to Gen Z considering they’ve grown up in a time where everything from therapy to meditation is widely accepted,” Courtright says. “This coincides with mental health becoming something that companies are not only talking about but investing in — this isn’t a fad and there isn’t a quick fix. This is a long-term investment that transforms the way employees feel about their jobs.”

Company culture should be flexible and supportive

What kind of company culture does Gen Z want as they enter the workforce? The answer is complicated at best.

One recent survey from Slack suggested that as few as 12% of workers want to return to the office full-time, but another survey from workforce engagement platform Ten Spot showed that only 30% of Gen Z wanted to stay remote full time, while 34% said they were “more productive and engaged” when working from the office and the contradictions have left employers scrambling to figure out how to approach office culture for future generations.

As confusing as it may seem, Debi Yadegari, founder and CEO of b2b solution Villyge, says the answer is simple: Gen Z simply wants the ability to choose.

“To attract top talent, today's employer is going to have to be flexible and meet the employee where they want to be [whether it’s] working asynchronously if their role permits, providing flexible time and absolutely permitting a remote or hybrid option,” Yadegari says. “Today's manager needs to adapt and quickly learn what it means to support today's worker in a way that will drive retention and increase productivity.”

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If you want Gen Z, you’ll have to work for them

In the shift to remote styles of work, it was assumed that Gen Z and younger workers — as the first all-digital generation raised on technology — would thrive in this environment. But Gen Z craves belonging, purpose and meaning, which may account for the number that are desperate to return to physical office spaces.

“Employers will need to sell Gen Z workers on the 'why' they should work for a particular company,” she says. “And once employed, managers will need to find opportunities to connect, mentor and foster a positive employee-employer relationship to ensure retention of their Gen Z workforce.”

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Millennial bosses are making things harder for Gen Z employees

Whether working remotely, in-person or somewhere in between, young workers are seeking support from managers, and looking for the resources to succeed at work.

For many companies, a hybrid culture provides the best of both worlds and satisfies many employees. For those companies choosing to go fully remote, stipends for communal workspace access are becoming increasingly popular as younger employees seek professional solace amidst noisy roommates or a social escape from single living.

“Younger employees need to feel that their managers care — causing a total overhaul of how companies are thinking about employee support,” she says. “To help their teams thrive, managers will need to cultivate an empathetic style of management that empowers employees professionally, as well as personally.”

Ethical companies are the only option

And finally, Gen Z doesn’t just want companies to cater to their personal needs, but to the greater good.

Seventy-two percent of Gen Z applicants are looking for a fair and ethical boss, according to Tallo research. Sixty-one percent want the ability to be heard and 47% are seeking a job making an impact socially and economically. In the future, an employee’s desire to stay with their company is predicted to hinge on a company’s ethics, purpose and commitment to developing a sense of belonging, according to a recently released report by ethics and compliance solutions company LRN.

“Employers need to demonstrate and identify their purpose and values,” says Emily Miner, senior adviser at LRN. “There’s a greater pool of employers and options for how people can work, so given the choice of working for a company with a strong, ethical culture, or one without, the vast majority will select the former.”

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Now more than ever, younger people are looking to secure their financial future

In a 2020 study by ESG-focused employee engagement solution WeSpire, research found that Gen Z is the first generation to put purpose above salary. And most importantly, they will leave the companies they work for if they believe they are hiding bad business practices, ignoring their negative environmental or social impacts or supporting toxic workplace cultures.

“In an era of stakeholder capitalism and ESG goals, it is the culture that guides the authentic or inauthentic expression of a company’s commitment to purpose, values, people, society and planet,” Miner says. “It provides an important lever for resilience and growth in an uncertain world.”

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More than one in six young people stopped working since virus

When workers trust and enjoy the workplace, they are eight times more likely to observe and report ethical standards, according to the report. Companies will have to be mindful of how they approach people and not say anything that would be controversial. The consequences, Miner says, are that their employees will quit — Gen Z isn’t tethered to a job, and they don’t feel like they need to be confined to one job for decades. They believe in being happy at their workplace and if they aren’t, they’ll leave.

“It’s not a revolutionary concept — keep it out of the workplace,” Miner says. “When in doubt, it’s better to avoid controversy than to go too far.”