Gen Z—the youngest generation with adult members—is now the newest addition to your workforce. The influence of the abundance of macro-social movements and systemic issues of the past decades has shaped who they are, what they stand for, and what they expect from work.
Onboarding people into your organization has always been a tricky task. But what about onboarding an entirely new generation with new ideals, principles, and demands from work? The last thing they’d want to see behind the curtain is a stale, outdated monument of the past that doesn’t resonate with their ideals.
As of 2022, 54% of Gen Z and younger millennial employees aren’t engaged at work.
The lack of meaningful action from HR is only likely to boost this number, because of which organizations risk losing some of their most innovative, creative talents. Some believe the recession and the unstable economy hinder job-hopping millennials and Gen Zs. But research states the straight opposite. Let’s dive in.
Gen Z is more willing to walk away than any other generation
According to a 2022 report by Deloitte, four in ten Gen Zs and nearly a quarter of millennials would like to leave their jobs within two years—of these, roughly a third would do so even without another job lined up. This shows that the younger workforce has reason to hope for a better place to work despite the current economy.
Gen Z and millennial workers are more willing to walk away from their jobs than any other generation. But why is this the case? It's not that organizations are getting worse; it's that these generations value flexibility, pursuing their passions, and making a positive impact more than ever before. They are more likely to take risks and move on to new opportunities if they feel their current job is not offering them the desired growth and development.
The Gen Z mentality is different from that of previous generations
The Gen Z mentality is purpose-oriented, with a significant focus on social impact. Research has shown that they are highly concerned with social justice, environmental sustainability, and equality. They are passionate about positively impacting the world and are more likely to seek opportunities for social engagement and activism. The less your work culture aligns with these values, the less tolerant of you Gen Z and millennials grow.
“Millennials and Gen Z'ers focus a significant amount of energy on determining what matters to them and what they can do to contribute.”
— Anna Long, Author at The Heights
Their thinking style too, is different from the previous generations. Gen Z tends to be more pragmatic and results-oriented. They prioritize productivity and efficiency in their work and are less likely to be swayed by emotional appeals. They are more skeptical of traditional authority figures and hierarchies and instead value transparency, authenticity, and openness.
This can make them challenging employees, but it also reflects a desire for greater accountability and transparency in the workplace.
Gen Z has also been at the forefront of many social and political movements in recent years, playing a pivotal role in movements such as Black Lives Matter, climate activism, and LGBTQ+ rights. This reflects their strong sense of purpose and desire to impact the world positively. As they enter the workforce, they are likely to bring these attitudes and values with them, shaping the future of work in innovative ways.
Millennials and Gen Z are more stressed out than ever
Unfortunately, the newest working generation is also reporting record numbers of anxiety, depression, and burnout compared to other generations. According to a recent Gallup report, 68% of all Gen Z and younger millennials report workplace stress—higher than any other generation. 34% of this generation also report being burned out at work.
The reasons for this are complex. One major factor is the way technology has changed the way we work. Employees are now expected to be constantly connected and always reachable via email, messaging, and social media—this can make it difficult to disconnect and recharge.
Research has shown that technology use can contribute to stress, anxiety, and burnout, as it can lead to information overload and a sense of being unable to switch off. This has also contributed to the Youth Mental Health Crisis, a costly phenomenon for Gen Z and employers alike.
The youth mental health crisis is a silent pandemic
Record levels of anxiety, depression, and burnout are being reported among Gen Z and millennial employees, leading some experts to describe it as the most severe mental health crisis in decades. Research has shown that these generations face unique challenges, including economic insecurity in the work environment of the pandemic, high levels of debt, and a lack of job stability.
“COVID-19 hit Gen Z hardest in the workforce. It will be a generational touchstone that will shape Gen Z's perspective on employers long into the future.”
— Marcus Erb, VP of data science, Great Place to Work
The WHO (World Health Organization) reported that an estimated 12 billion working days are lost every year globally to depression and anxiety at a cost of US$ 1 trillion per year in lost productivity. In the United States alone, the cost of depression and anxiety disorders in the workplace is estimated to be around $1.2 trillion annually.
The youth mental health crisis brings higher rates of absenteeism and worse, presenteeism, which refers to employees coming to work despite being unwell or mentally unwell. According to a survey conducted by Mind Share Partners, SAP, and Qualtrics, nearly 40% of employees have left a job in the past due to mental health reasons. Do you know what’s worse? A majority of these employees did not disclose the real reason for leaving.
But what’s causing this crisis among working-class Gen Z and millennials?
- Economic headwinds: A significant part of Gen Z entered the workforce during the pandemic, a period of economic instability, with many experiencing financial pressures. According to a report by the American Psychological Association, money is the top cause of stress among Americans, with nearly three-quarters of adults reporting feeling stressed about finances.
- Precarious work arrangements: The prevalence of temporary or contract work that offers little job security or benefits also contributes to their crisis. The Economic Policy Institute found that young workers are more likely to be in low-wage, precarious jobs that leave them uncertain about their future.
- High levels of student debt: Millennials and Gen Z are carrying record levels of student debt on top of the already dire financial situation. A survey by the National Financial Capability Study found that young adults with student loans are more likely to experience financial stress and anxiety than those without.
- Rising living costs: The cost of living is increasing at a faster rate than wages, leaving many young workers struggling to make ends meet. The Brookings Institution reported that wages for young workers have remained stagnant for decades, contributing to a growing wealth gap.
- Job insecurity: The pandemic has led to widespread job losses and increased uncertainty about the future of work. The Economic and Industrial Democracy reports that job insecurity is one of the top causes of stress among young employees, especially fresh graduates.
- Work-life balance: Blurring boundaries between work and personal life can contribute to poor mental health among young workers. In 2022, research by TalentLMS found that 82% of Gen Z wanted mental health days, and 74% preferred hybrid or remote work. Poor work-life balance and burnout were top reasons to quit after inadequate salary.
So what can you do to alleviate this crisis in your organization? What do Gen Z and young millennials want? And how is it different from what they get?
What Gen Z wants vs. what organizations think they want
According to a study by Deloitte, 73% of these young workers prioritize work-life balance and flexibility, while only 14% of organizations believe this is a crucial factor. Another study by the IBM Institute for Business Value found that purpose and meaning are critical for Gen Z workers, with 75% saying they want a job where they feel they are making a difference in the world. However, only 6% of organizations prioritize purpose and meaning in their recruitment efforts.
“They want to work. They want to do a very good job at that position. They're not looking at climbing the ranks quickly. They're looking at getting value quickly.”
— Denise Villa, founder of The Center for Generational Kinetics, on Gen Z
Gen Z are looking for careers that provide a sense of purpose and meaning, with work-life balance and flexibility being key factors. They are not content with simply clocking in and out of a job but want to feel that their work is positively impacting the world. Organizations that fail to recognize these expectations risk losing out on the loyalty and commitment of these young workers.
Ultimately, organizations that fail to recognize and respond to the expectations of Gen Z risk losing out on the potential of these young workers. By listening to and delivering on their expectations, organizations can create a culture of engagement and loyalty that will drive their success in the years ahead.
How HR leaders can reach a common ground with Gen Z
So far, we have spoken about how Gen Z and younger millennials are more stressed, disengaged, and more likely to quit than any other working generation. Their mentality and expectations from work are different from previous generations, and the sooner people and culture leaders take their concerns into account, the better.
Here are some ways HR managers can respond to their needs:
- Prioritize purpose and meaning in the workplace. Gen Z employees want to feel that their work has a positive impact on the world. HR leaders can help to create a sense of purpose by highlighting the impact of the organization's work, providing due praise and recognition, and giving GenZ employees the support they need to get involved in socially impactful initiatives or movements even outside of work.
- Offer work-life balance and flexibility. Flexibility is one of the most desirable attributes that Gen Z employees are looking for in employers. They value their personal time and are not keen on sacrificing their well-being. People and culture leaders can offer flexible scheduling, remote or hybrid work options, and other work-life balance initiatives to help employees achieve this balance in their lives.
- Create a culture of transparency and communication. Gen Z employees want to be heard and valued. HR leaders can create a culture of open communication by encouraging feedback and listening to the needs and concerns of employees, while keeping them in the loop about key decisions like the future trajectory of the organization.
- Provide opportunities for growth and development. Gen Z employees are looking for careers that allow them to grow and develop their skills. This could mean offering training and development opportunities, mentorship programs, and other initiatives to help employees grow and develop in their careers.
- Foster a diverse and inclusive workplace. Gen Z employees don’t want lip service. They value real diversity and inclusivity in the workplace. A genuinely diverse and inclusive workplace means hiring and promoting a diverse workforce, offering diversity training, and fostering a culture of respect and inclusion.
People and culture leaders also need to take special care not to force happy hours or other workplace rituals on employees, especially on Gen Z—such mandatory events may be perceived as forceful and may be counterproductive. It’s always a good idea to stay respectful of individual preferences when it comes to engagement events. Even sending a simple email every once in a while encouraging them to stay mindful and take breaks when necessary may help meet the desired outcome.
The key is to listen to and respond to the needs and expectations of these young workers, who are looking for careers that offer purpose, flexibility, and opportunities to grow. With the right approach, HR leaders can help to create a workplace culture that will attract and retain the best Gen Z talent.
Making the most of this purpose-driven generation
Creating a comfortable and productive workplace for Gen Z employees requires HR leaders to understand their unique needs and expectations. By embracing the strengths and values of this purpose-driven generation, organizations can tap into a new wellspring of innovation and creativity.
Ultimately, the key to finding a common ground with Gen Z is creating a culture where they feel empowered, where they’re able to do meaningful work, and where they’re able to grow. By taking a collaborative approach and embracing the strengths of this purpose-driven generation, HR leaders can help to create a workplace culture that is both productive and fulfilling for all.