Talking About That Generation

Everybody thinks they know what Generation Z is about: They want purpose and meaning in their work. They distrust institutions, but they really love brands. They’re consumed by social media. They’re financially insecure and don’t mind living with their parents. They’re exceedingly concerned about their mental health. They’re much less interested in entire categories of goods than their predecessors, including alcohol and spectator sports.

But that doesn’t mean CEOs and their companies know what to do about employees and consumers who were born as far back as 1997. How do they confront the generational peculiarities of a group of people who are rapidly moving into the pivotal position in the workplace, the U.S. economy and American society?

“Like every generation before them, this generation will probably become more focused on finance as they get older and more politically conservative,” says Eric Pliner, managing director of the leadership and culture practice for Accenture. “But there are core values fueling this generation because of their connectedness that magnify some of their expectations in a different way.”

In dealing with Gen Zers, says Jen Brace, chief futurist for Ford Motor, “It’s important to give validity to their motivation and not just kind of slough it off as ‘Young people don’t want to work’ or don’t want this or that. That’s somewhat dismissive.”

Indeed, the conventional wisdom about Gen Z, whose youngest members were born as late as roughly 2012, includes falsities as well as truths. Here are some ideas for sorting through the mythology and dealing effectively with Gen Zers as employees and and consumers.

In the Workplace…

The ethics of work. Gen Zers are entering a career world transformed by companies’ decentralization of white-collar work in the wake of Covid. “Only about 10 percent of my students expect to be in the office all the time, full time, in their careers,” says Ella Washington, an organizational psychologist at Georgetown University.

This expectation makes it especially difficult “to get people for labor-intensive jobs, because [companies] are competing against non-traditional competitors” for Gen Z workers, says Fran Maxwell, global lead for people advisory and organizational change for Protiviti. “They don’t feel they need 9-to-5 jobs anymore, or revenue streams.”

Led by Gen Zers, in fact, 52 percent of the global workforce surveyed by Ford said they would accept a 20 percent pay cut in favor of prioritizing their quality of life. “They have the least generational wealth ever,” Brace says. “They’re behind. [But] they’re still willing to give up pay to have a better quality of life.”

Companies must adjust in a labor-tight, skill-short market. “With work-life balance, they’re much more courageous about holding that line than prior generations,” says Susan Eaglebarger, CHRO for industrial distributors Lawson Products. “And they’re high-performing talent that you want on your team, so you have to be cognizant of this.”

Such attitudes can be a hard swallow for older managers, who “may think, ‘I had to work 80 hours a week when I was your age, so just suck it up,’” Maxwell says. “A lot of organizations are spending time, energy and effort on increasing the EQ of their managers and their effectiveness here.”

Record anxiety. Fifty-four percent of Gen Zers in the U.S. feel nervous or anxious, the highest among generations, according to a survey by the American Psychological Association. Employers are streaming in to pick up the slack, with measures ranging from employee support groups to greatly expanded mental-health benefits.

Finances are a big source of the anxiety. The average student borrower holds about $35,000 in debt, an amount that has risen by 40 percent, amounting to payments of $2,650 a month in the past three years, according to TransUnion, despite Biden administration efforts to offer student debt relief. This is one reason 57 percent of U.S. adults under age 25 live with their parents, up from 53 percent in 1992, according to Pew.

In addition to finances, Gen Zers perceive other stresses more acutely than older Americans. For instance, 45 percent of Gen Zers in 10 countries participating in a recent survey said worries about climate change made it difficult for them to function on a daily basis.

Socially inept. Fueled by isolation during the pandemic, Gen Zers “feel awkward talking to a person in person, more than past generations,” says Marcie Merriman, managing director of EY Americas Cultural Insights. “This is even more true of people working in retail and manufacturing” than in the office.

Gen Zers also “need more direction than previous generations because it’s hard to shadow from behind a computer screen,” says Washington. “You’re going to need stronger managers and management training to do that.”

Authority figures. Gen Zers have different expectations of corporate leaders. “When they meet institutional barriers to information, they don’t quite understand it because that’s not the world they grew up in,” Washington says.

“Leaders have to commit to being authentic, being real, admitting when they make mistakes and owning them,” agrees Pliner. “This doesn’t mean [Gen Zers] are being given veto power over things that will affect the entire company.”

What “purpose” means. Millennials introduced the primacy of purpose in their work, and Gen Z is carrying that on—but only to an extent. “They want to know a company’s purpose, mission, vision and values before deciding they want to work with that company,” Maxwell says.

However, the company doesn’t have to be trying to save the world. “People [just] want to know their work matters to someone in the world, so being clear why you do what you do, and what is their role in having that impact, is critical—and it’s got to be real,” Pliner says. “If your real purpose is to generate return for shareholders, that’s a perfectly reasonable purpose.”

Adds Merriman, “Not all of them say their work has to be full of meaning and purpose and pretty butterflies; a lot of them just don’t want their job, and the people they work with, to suck. They want to be treated nicely and paid fairly.”

Moving up. Lack of ambition among Gen Zers has become a caricature, including a movement called “lazy girl jobs,” which encourages young workers—male and female—to prize the virtues of well-paying, remote, low-stress work. At the same time, the generation has its share of ambitious achievers. “For the high performers, the differences aren’t as pronounced as the stereotype,” says Doug Chambers, CFO of wireless carrier UScellular. “People who are really dedicated to career advancement are more willing to come into the office more and be more present.”

Eaglebarger believes that “a defined career path is important” to Gen Zers.  “They want to understand how their job fits in, and they want to grow. They love feedback.”

Coca-Cola, for example, has launched a leadership development program that “focuses on aspiring Gen Z leaders” in food service, equipping participants “with key leadership skills and frameworks they need to build their career,” writes Dagmar Boggs, president of the company’s food service and on-premise operating unit in North America.

Technology ambivalence. “Their technological fluency enables them to navigate and leverage digital platforms effectively, enhancing productivity and innovation within the company,” says Diane Rosen, principal at Compass Consultants.

Thus, says Jean-Claude Viollier, head of the North Americas West region for Capgemini, “CEOs must be open to new communication channels and methods of discussion in order to resonate with this pool of talent.”

Yet, Gen Zers profess some ambivalence about generative AI and other new technologies, being “more hesitant and less likely to trust it and questioning the value of it” than other generations, especially Gen X, Merriman says.

In the Marketplace…

It’s all about brands. Gen Zers will “spend dollars on organizations that align with their values,” Maxwell says. “They’ll spend more if it’s a socially acceptable organization.”

But as consumers, Gen Z has given up the conceit that brands don’t matter, which characterized many millennials. Social media marketers, digital loyalty programs and the convenience of iPhones have all fueled the generation’s abiding attachment to the very engines of capitalism.

“We’ve revamped our marketing strategies to be more transparent, value-driven and engaging across digital platforms,” says Grant Aldrich, CEO of the Preppy online-training platform. “This generation values brands that align with their ethical and social viewpoints, making it crucial for us to maintain an honest and socially responsible brand image.”

Look no further than Stanley, the brand that has made its $45 stainless-steel tumblers de rigueur among Gen Zers who signal their environmental bona fides by buying multiple versions of something that presumably substitutes for a disposable water bottle.

Amina Malikova, for instance, is a 24-year-old in Houston who owns more than a dozen Stanleys, including her favorite Flamingo Pink version, and has racked up about five million views of her videos about Stanley on TikTok. Her “Things I’ve been avoiding: cleaning my Stanley cups” got more than six million views.

The stage is online. Gen Zers live on social media and other internet content, of course. One data point: They spend about half of their waking hours multitasking across screens, according to consultant Susan Kuczmarski.

But more Gen Zers are questioning that lifestyle. “It will hit a tipping point soon: all the guilt and negativity they feel themselves about the amount of social media they’re using and their desire to spend less time on tech altogether,” Merriman says. “It’s not a novelty, not something cool. More of them are looking for ways to break free of it. So the flip phone is making a comeback.”

For example, while 46 percent of millennials said they had been preapproved for a car loan online in a recent survey by Cox Automotive, only 35 percent of Gen Zers said the same thing. The younger consumers “want the comfort of talking to a dealer and having someone who can help them figure it out,” says Cox Senior Vice President Tracy Fred.

Up next for brands and employers: Generation Alpha, the American preteens who already have become important internet influencers and consumers. “They’re the second generation that grew up as digital natives,” says Thomas Peham, vice president of marketing for online-content manager StoryBlok. Once they reach the age of majority, Gen A may make CEOs pine for the simpler days of dealing with Generation Z.

RETHINK 9-to-5

Adam Sutton, President, RNR Tire Express, Tampa

We’re now implementing part-time positions so we can attract Gen Zers and younger millennials to technician jobs and others where we’ve been having trouble attracting people. It’s a challenge to attract Gen Z to a nine-to-five work life.

They get frustrated and bothered if they’re stuck in a nonproductive environment. They love to multitask and be as self-reliant as they can, and they’re faster than previous generations. But they have a lack of confidence in being on the phone, so we have to empower them and train them to deal with older generations who do want to be on the phone.

CREATE MENTORSHIP MOMENTS

Karen Bennett, CHRO, Cox Enterprises, Atlanta

We assume Gen Zers are a lot like millennials, but that’s not true. We find more of our early-career people are in the office more frequently [than millennials]. They recognize the value of being seen and having a good collective network.

In our culture, we tell young people, “Have a conversation with anyone.” And they’ll take that to heart. They’re not raging against the machine by any means, but they’re more daring and not beholden to the hierarchical system.

HOLD THEM LOOSELY

Henrik Müller-Hansen, Founder and CEO, Gelato, Oslo

Gen Z is driving our demand for personalized apparel and other fast-moving consumer goods in the U.S. and elsewhere. Also, most of our 300 creative team members are Gen Zers. They guide our product road maps and software development and production relationships.

If you distance yourself from Gen Zers, you’re in for a ride. But if you try to hire them as employees, you’re also in for a ride. It’s a very fluid relationship. Your role isn’t to try to get them to sign an employment agreement. You have to accept the fact that they want to be fluid in substance and in their relationship with you as a company.

COMPETE THROUGH BENEFITS

Jamil Bouchareb, CEO, Restaurantware, Chicago

Our business is built on a sustainability ethos, and that’s being driven by Generation Z customers who are willing to switch companies and brands and coffee providers if that helps them achieve that goal.

The vast majority of our 160 employees are Gen Z. They want to know they’re being taken care of more than being self-sufficient in many ways. So we have to take our benefits programs upscale to compete with the Googles and others and keep them happy. We focus on things they’re concerned with, including mental health.

TAKE A LIFECYCLE APPROACH

Melissa Jones, Executive Vice President and CHRO, CSAA Insurance Group, Walnut Creek, California

It’s hard for Generation Z to think about retirement when they’ve got this student debt right in front of them. So, we allow for 4 percent of their match to their 401(k) to go toward paying student-loan debt. That’s been a huge attraction element for us. And we offer financial well-being benefits.

We also offer “Wellness Wednesdays,” when we allow people to come together and do meditation. Loneliness is more detrimental to your health than smoking a pack of cigarettes a day. We’re more holistic in thinking about the benefits lifecycle than the traditional view of the past.

MARKETING WHERE THEY ARE

Russell Wager, Vice President of Marketing, Kia of America, Irvine, California

We did some research and found the No. 1 thing they’re active and engaged in is online videos and social-media platforms. So, we are using new partners in podcasts and online streaming.

We also just went and partnered with the League of Legends in esports. We’re their league sponsor and sponsor two of their teams. Why? To reach Gen Z and Gen Y. Fifty percent of the audience of esports isn’t watching any other sports. But 25 percent of them are going to purchase a new vehicle in the next year.