Businesses are coming out of the pandemic, and this means a lot more stability for organizations in most industries. But as the pandemic winds down, new challenges are quickly emerging for companies, and employers will need to stay on their toes.
Economists are predicting that a Great Resignation is coming: 25-40% of workers are expected to leave their current jobs this summer, because they aren’t happy. During the high unemployment and uncertainty of 2020, workers held onto their jobs, even if they weren’t happy with them. Now that we’re coming out of the pandemic and there’s more stability, employees are starting to look around for greener pastures.
The Great Resignation has important but short term implications. At the same time, another trend has long term workforce implications for employers.
Baby Boomers, the largest generation, are hitting retirement age and leaving the workforce as the much smaller Generation Z is entering the workforce. The gap in numbers is creating an enormous demand for workers that employers are having difficulty fulfilling, and this scenario gives Gen Z job prospects unprecedented bargaining power.
Meet Generation Z
Generation Z are the first truly digital natives. They were born after the internet, never knew a time without cell phones, and grew up adopting new technologies as they were released. Gen Zers are the most tech-savvy generation, which makes them tremendous assets to organizations that want to stay ahead of the game. They’re also highly entrepreneurial — they think in terms of gigs, rather than stable career paths.
Gen Z is the generation that missed out on childhood. They were pushed throughout their school-age years to play multiple club sports, participate in extracurriculars, and excel academically so that they would have the greatest competitive advantages when they entered the workforce. After spending a childhood committed to achievement, the pandemic hit just as they entered adulthood.
The disruption and isolation during COVID-19 have left many Gen Zers struggling with anxiety and depression. As a result, they’re looking for cause-conscious employers that care about employees' mental health. This generation thinks short-term when it comes to employment, rather than playing the long-game or getting excited about retirement benefits.
All these factors mean employers have their work cut out for them when it comes to recruiting, hiring, and retaining this generation of workers.
Gen Z Adds New Wrinkles to Recruiting
Generation Z enters the workforce with a lot of bargaining power. As demand increases for skilled, tech-savvy employees — and as the labor shortage grows — Gen Z is negotiating more than any other generation. Remote work is a top priority of theirs. Companies that don’t offer remote work will have a challenging time successfully recruiting new employees. Companies that do offer remote work will have a leg up.
These workers want specific kinds of benefits. They want to know employers’ stances on social issues. Those concerns are tremendously important to this generation, and they’re willing to turn down attractive offers if employers can’t satisfy them. If applicants can’t get the benefits they want from one employer, they’re willing to look somewhere else, even if they’re between full-time jobs.
Part of the reason young people are willing to do that is because they tend to rely on multiple streams of income. It’s not unusual for workers to have several side hustles that generate income. So they can afford to turn down less than ideal job offers without worry. Many Gen Z employees plan to keep their side hustles while employed full-time, and 65 percent already in the workforce plan to run their own businesses within 10 years.
Unlike previous generations, this workforce isn’t concerned about finding a company and staying for the long term. Instead, they plan to switch jobs every couple of years. Employers are likely to find that Gen Zers are interested in learning everything they can, making an immediate impact at a company, and moving onto bigger and better opportunities.
You may find this generation more concerned about what you can do for them than what they can do for your organization. The challenge for employers will be to attract Gen Zers and to get the most out of them while they can.
How to Adapt to New Workforce Demands
As older and larger generations are retiring and this smaller generation continually creates churn, many companies will be flirting with a serious labor issue that could impact their growth and even their viability. It’s critical to get on top of it now and develop a plan that will allow you to continue growing in the coming years.
We see three areas to be key components of a successful growth strategy.
Rev up recruiting
Be prepared to be constantly recruiting, on a continuous basis. In order to stay ahead of the churn, most companies will be wise to overstaff slightly. Many companies are investing in a recruiter — not an HR person, but a position dedicated to nothing but recruiting.
Know ahead of time how to attract and retain young talent. You won’t be able to recruit and hire the way you’ve always done it. Know their expectations for benefits and rethink what you’re currently offering.
Sixty percent of Gen Z workers are unsatisfied with their company’s traditional benefits. Instead, they’re most interested in mental health benefits, flexibility, paying off student loans, and annual bonuses. They are less concerned about PTO and retirement. Companies that offer help paying off student loans are highly prized.
Also consider offering weekly pay or on-demand pay. Pay attention to the needs of young people that may be different from other generations’ needs.
Get the most out of your employees while you’ve got them
Because Gen Z employees plan to gain experience quickly and move on, it’s important to make the most of the time you have with them. Optimize the efficiency of your onboarding process. Trim all the fat and eliminate anything that will slow down their learning curve. You don’t want to spend months training someone and get no value out of it.
Also consider pairing your youngest workers with more seasoned employees for mutual benefit. This lets each person learn from the other. Your older employees can help new hires to develop professionally, and Gen Z employees can pass along their tech knowledge and innovative approaches. When your young employees move on, your company retains their insights and they are better prepared for success.
Make management a priority
Invest in your managers as well as your new employees. Develop strong managers who are very involved in their departments — especially when operating remotely. Managers should be available to mentor young employees and to help remove obstacles so team members can flourish quickly. This approach helps them develop earlier as valuable contributors.
Generation Z employees can be tremendously impactful to a company, if you know what you’re going to get from them. Go into it with the right expectations and a smart recruiting strategy, and both your organization and your employees will benefit.