To attract and maintain talent, companies must adapt to meet the needs of Gen Z.
It seems like just yesterday Millennials were flooding into the workforce, but we've already moved onto the next wave: Generation Z. Don't make the mistake of assuming this generation is similar to the Millennials just because they're young. Generation Zers have their own unique tastes, preferences and perspectives, and that personality is making its mark, right now, in workplaces across the U.S.
So how do you prepare your workplace for the entry of Generation Z workers? As a fast-growing startup that's not only hiring young graduates, but also trying to help them purchase their first homes, we have a lot invested in understanding Generation Z. So here at Clever Real Estate, we surveyed 1,000 recent college graduates about salary expectations and preferred management styles. We learned that just as Millennials demanded perks like flex time, free snacks and a casual work environment, Generation Zers have their own list of demands. Let's look at some of the main takeaways from our survey.
They want you to show them the money.
Millennials were stressed and anxious, so they asked for softer, quality-of-life perks like a relaxed dress code and more personal time. Generation Z workers aren't "in their feelings" quite as much and they strongly prefer money-based incentives like top-shelf health insurance and competitive salaries.
Does that make them selfish? Of course not. If anything, the "money first" attitude of Generation Z might represent a return to the norm, after the "soft and fuzzy" Millennial interlude. As choppy as the economy was, at times, for Millennials, Generation Z is entering a much less stable job market, with an economy that's looking more uncertain than at any time in the last several decades. It's not that they're necessarily any less feelings-based than their Millennial predecessors, but they care primarily about money because they're entering an economy that's shadowed by the prospect of serious scarcity.
In fact, when asked about the reason they went to college, the most popular answer by far was to earn more throughout their career. Generation Zers are not starry-eyed idealists: quite the opposite. And while pumping up starting salaries is neither desirable nor feasible for most companies, they can take heart from the fact that cuts to soft perks like snacks, PTO and beanbag chairs will go unprotested as long as those savings are put into increased salaries.
Generation Z employees are plagued by disappointment.
One of our most troubling findings involved the salaries that Generation Z anticipated earning once they entered the workforce.
The typical Generation Z undergraduate reported that they expect to make $57,964 one year after graduating college, but the national median salary for recent graduates with bachelor degrees and between zero and five years of on-the-job experience is only $47,000. This means that Generation Z enters the workforce feeling disappointment. Understanding this emotional state is going to be key in effectively managing Generation Z employees. Whether this disappointment translates into a drive to achieve and earn more, or into disillusionment and malaise remains to be seen.
Unfortunately, this trend of disappointment continues into mid-career. According to our survey's findings, the average undergraduate continues to overestimate how much they'll be earning by mid-career (defined by being 10 years out of college) by approximately $15,000. This gap, you'll note, is even larger than the gap between their expected and actual starting salaries, meaning that their disappointment at mid-career could be even more intense than it was at the beginning of their careers.
Interestingly, students with different majors exhibited different degrees of realism regarding their post-college earnings. Students studying engineering or the humanities had the most accurate ideas of how much they'd earn; their expected salaries were more or less in line with their actual salaries. Students majoring in nursing and computer science actually had an excess of modesty, as they ended up earning more than they expected.
So which major was associated with the least realistic salary expectations? Interestingly enough, business majors expected a salary that was a whopping 31% more than the national median. If you're an HR professional tendering offers to Generation Z business school graduates, you might want to tread especially lightly. Since disappointment is a function of expectations versus reality, the best way to negotiate this situation might be a gentle but objective education on national median salaries, rather than a personal appeal.
They want face time with managers.
Although Generation Zers are full-blown digital natives, having spent their entire lives with online access and social media, their preferences regarding how they'd like to be managed in the workplace are surprisingly quaint.
Generation Z employees want face-to-face interaction with their managers. This is somewhat counterintuitive considering 30% of tech-dependent Generation Zers report feeling discomfort after only 30 minutes away from their smartphones, but the data was clear. Generation Z needs constant, personal communication from their superiors to feel appreciated and fulfilled at their jobs.
In fact, 60% of Generation Z employees reported wanting multiple check-ins from their bosses during the workweek. Of those employees, 40% said they wanted to interact with their boss between once and several times a day. In this area, Generation Z is actually somewhat more demanding than Millennials; two-thirds of Generation Z employees reported needing feedback from their manager at least every one to three weeks to feel appreciated at work, while less than half of surveyed Millennials said the same.
When they receive feedback from their managers, Generation Z has a preferred tone and style. They want the feedback to come as soon as possible after the behavior being referenced, and they want the feedback to be concise; in some cases, a simple emoji could be adequate. They also want the feedback logged and tracked, so there's a record of it that they can refer back to come evaluation time.
They'll work hard, up to a point.
Generation Z has been paying close attention to the workforce, and one of the things they've noticed is that working too much leads to burnout. Seven out of ten of their Millennial predecessors reported experiencing burnout at work, and Generation Z has taken note.
For Generation Z, work-life balance is a supremely important consideration, and it should be just as important to their employers. After all, burnt-out employees aren't dependable performers; they're 63% more likely to take sick days, and three times more likely to quit their job entirely.
How can employers contribute towards a healthy work-life balance for Generation Z employees? One way is to allow employees to telecommute. With remote work on the rise in almost every industry, employers are discovering that it not only improves employee satisfaction, it can also increase their productivity. In many ways, allowing employees to work out of the office is a win-win. As an emerging start-up based in St. Louis, we've learned that sometimes we need to find talent in other parts of the country and remote work makes that possible.
Another way to promote a healthy work-life balance is to limit work hours. Many major corporations have prohibited weekend work, and have found that forcing employees to take a couple of days off increases their effectiveness come Monday. A related suggestion is to put a greater emphasis on efficiency as opposed to raw time. Let your employees know that results matter far more than simply putting in a certain number of hours.
They care about diversity and company values.
Generation Z puts a high value on workplace diversity, so any company hoping to retain top Generation Z talent is going to have to prioritize diversity too.
According to survey findings, 63% of Generation Z employees report that it's most important to work with people of diverse education and skill levels. An additional 20% report that the most important element of a team is having people of different ethnicities, cultures or origins.
This isn't just lip service. Generation Z employees are much less likely to sign on or stay at a company that doesn't have a diverse workforce. A staggering 77% of Generation Z employees reported that a company's level of diversity would seriously affect their decision to work there.
There are many ways to increase the diversity of your workforce. One way is to actively work to eliminate bias. This can be more difficult than it sounds. One well-known anecdote involves a major bank using analytics to study how their hiring managers selected candidates. They found that when the hiring managers were fatigued or stressed, they were more likely to hire candidates that resembled themselves. By tweaking their hiring process, they were able to eliminate a large amount of unconscious bias.
Another way to increase your workplace diversity is to be open, aware and motivated. Mandate diversity training for the workforce to make employees aware of any unconscious or lingering biases they might harbor. Attracting diverse candidates to your company will be a lot easier if you create a welcoming atmosphere.
Although the prospect of preparing your workplace for Generation Z can seem daunting at first, a closer examination of their desires and preferences reveals that they're more traditional than they might want you to know. Behind their facade of tech dependence, they're an essentially rational generation, with a healthy self-interest moderated by an innate sense of decency and a striking degree of community-mindedness. Preparing your company for Generation Z could very well mean making your company a more decent, just and vibrant workplace.