Recruiting and Retaining Gen Z
Our clients tell us hiring and keeping younger employees looks different than it did even a few years ago. Below, we’ve shared a guide to who Generation Z is, what they’re looking for in an employer, and practical ways to recruit and retain them, from culture and flexibility to communications and benefits. In over a century, we’ve watched every new generation reshape the workplace, and the employers who adapt early are the ones who attract the best talent.
Introduction
Generation Z — those born between 1997 and 2012 — are beginning to enter the workforce. They are different from even their millennial predecessors, and their arrival will challenge organizations to change general business practices. Many of them grew up during the recession, and thus far are thought to be career-oriented. After hearing about the struggles of millennials, they are trying to avoid making the same mistakes. Generation Z is realistic, resourceful and desires to have more control over their careers. As employers grow their efforts to both recruit and retain Generation Z, there are many considerations about how to best engage this unique generation.
Generation Z in the Workforce
Generation Z aspires to be entrepreneurs. According to a study from Samsung and Morning Consult, 50% of Generation Z members are interested in starting their own companies. Like the millennials before them, they are hesitant to accept the traditional 9-to-5 office jobs and dream of self-employment. Generation Z grew up witnessing the success of innovative startups like Facebook and Uber, as well as crowdsourcing. They have ambitious goals of developing their startups and being their own bosses. Though many members of Generation Z do inspire to be self-employed, if catered to adequately, this entrepreneurial attitude can provide advantages to organizations that are ahead of the curve in recruiting, properly utilizing and retaining Generation Z. Successfully retaining Generation Z can help boost an organization’s overall efforts. As with any other employee, turnover can be costly for employers when lost productivity and replacement costs are accounted for. On average, it takes six to nine months’ salary to replace a salaried employee, as well as potentially damaging company culture and employee morale. Estimates show that by 2030, Generation Z could make up almost half of the workforce. As more of Generation Z begins to enter the workforce, figuring out how to retain them will be essential. This toolkit provides insight into the typical characteristics of Generation Z and outlines how to recruit and hold onto Generation Z talent, so you can minimize turnover and boost your bottom line.
Generation Z Demographics
Who Are They?
Born in the late 1990s and early 2000s, Generation Z will soon pass millennials as the biggest group of the world population. Generation Z is also the most ethnically diverse generation in history. Often referred to as “digital natives,” Generation Z has stereotypes such as being addicted to technology and being active about social causes they are passionate about.
What Are Their Values?
According to research conducted by McKinsey & Company, the “search for truth” is at the core of Generation Z and their behaviors. “Truth” includes expressing individuality, having open dialogue, having realistic expectations, and understanding the viewpoints and backgrounds of others. General values of Generation Z include:
Increased activism about social issues, with an openness to political change
A higher level of independence from previous generations
A realistic outlook about their future
Interest in access to goods or services, rather than possession
Increased reliance on technology, and a tremendous belief in the benefits of it
Generation Z hopes to live out their values in the professional world — and contribute to organizations they feel aligned with.
What Are They Looking for in a Job?
Generation Z does not just create opinions about companies due to the quality of their products or services, but is more interested in the ethics, practices and social impact. According to Deloitte, 77% say that it is important that an organization’s values align with their own. To win over Generation Z,
employers will need to evaluate current practices and ensure that not only are they good global citizens, but that their impact is visible to both potential job candidates and current employees. As Generation Z translates their values into career choices, they will consider both career aspirations, and how an organization can be in alignment with their individual values. Generation Z cares about the ability to contribute to causes that benefit society.
As they enter the professional world, Generation Z’s ideal work environments include:
Opportunities for professional development
Upward mobility
Flexible work arrangements
Independence
Expanded benefits
Community involvement
An ability to utilize advanced technology
Contributions to broader goals that advance social and environmental causes
Not only are these topics important to Generation Z, but they will influence their employment decisions. According to LinkedIn, 92% would be influenced to join a company based on the technology offered to them, and 84% prioritize having a healthy work-life balance.
Generation Z Job Statistics
Generation Z is a growing part of the talent base for employers and now makes up around one-fifth of the workforce.
Like Millennials, Generation Z is more likely to move jobs than their older counterparts in the workforce. A study done by Robert Half Staffing found that, of employees ages 18-34, 75% felt that job-hopping was beneficial to their careers. As Generation Z is just beginning to join the workforce, it is too early to fully determine how often they will change jobs. However, by creating work environments that align with the values of Generation Z, employers may be able to prepare and get ahead of the curve as this new generation enters the professional world.
How to Recruit and Retain Generation Z
As Generation Z is different from any group of talent than ever before, employers can align their efforts with what Generation Z values. Evaluating company culture, company purpose, corporate social responsibility, benefits packages and how these topics are communicated can be impactful to best recruit and retain Generation Z. Generation Z disproportionally cares about our society and our planet compared to previous generations. Employers that also do — and can communicate these values effectively — will have a competitive advantage when recruiting and retaining Generation Z.
Culture
There are multiple facets of a company culture that will help attract and retain Generation Z. Consider how flexible work arrangements, social impact and work environments can align with their values.
Diversity and Inclusion
According to LinkedIn, 77% of Generation Z says a company’s level of commitment to diversity would ultimately influence their decision to work there. Generation Z values being part of a diverse workforce. Consider how your employment practices can both attract a diverse base of talent, and retain them.
Flexibility
Consider how flexible work practices can create a culture that is attractive to Generation Z. Flexible work practices include flextime, remote work arrangements and more.
Adaptive to Technology
Because Generation Z will be even more tech-savvy than previous generations, it is essential to connect with these employees by establishing a culture adaptive to technology advancement. Generation Z will not only be interested in using the latest tech and software but want to help address change.
A Green Work Environment
“Going green” in the workplace does not just involve recycling paper or putting computers on sleep mode to conserve electricity; the movement also concerns the overall working environment. Creating a green working atmosphere increases the overall health condition of the office and has been shown to reduce costs and heighten employee productivity. By working in a green building, you are not only making a positive impact on the environment, but you are also benefiting your employees. With increased sunlight in an office setting, as opposed to unnatural lighting, workers can be less depressed and able to refocus more quickly and easily.
Volunteer Opportunities
Generation Z loves to volunteer, and providing volunteer opportunities during work hours can allow employees to find greater meaning in their contributions to an organization. Employers can orchestrate volunteer opportunities or even consider a volunteer time off (VTO) program. A VTO program allows employers to set aside a predetermined number of hours or days for employees to volunteer, which will enable employees to volunteer in an area they are passionate about.
Addressing Intergenerational Gaps
Studies show that intergenerational conflict does exist in many organizations. By addressing intergenerational gaps and facilitating collaboration, both Generation Z and even the most senior employees may be able to learn from each other.
Corporate Social Responsibility
When seeking an employer, Generation Z values the purpose of the organization and its impact on society. While there isn’t one specific definition of corporate social responsibility, generally speaking, corporate social responsibility refers to how an organization benefits society. Corporate social responsibility topics can include the environmental, social and financial impacts an organization has, as well as how organizational goals make a positive contribution to society. Generation Z generally prefers companies that take active stances against poverty and formally support green policies and human rights. Often, these will be the choice organizations where Generation Z would like to be employed. As employers prepare for Generation Z, an organization’s view on corporate social responsibility should go hand-in-hand with its overall strategy. While your organization likely already pursues many of these initiatives, evaluate how your positive impact can best be communicated to both current and future employees. As recruits turn into new hires, consider how Generation Z can feel as if they are not only part of an organization with an impactful mission, but can contribute to that cause.
Environmental Impact
Environmental sustainability applies to how an organization’s actions impact the environment. Sustainability can include the use of physical resources, as well as evaluating the impact of a supply chain. Many organizations now even provide reporting on their sustainability efforts. According to the KPMG’s Survey of Sustainability Reporting, 96% of the world’s 250 largest corporations now formally report on sustainability. Consider how your current, and even future practices can be communicated through formal reporting or other channels such as internal or external communication mediums.
Social Impact
Does your organization take stances on social issues, such as human rights, diversity and immigration? How does your organization define its positive social impact? Generation Z is curious about these questions, and clearly defining these questions in alignment with the mission statement and purpose of your organization can help to attract Generation Z.
Philanthropy
Generation Z wants to be part of organizations that engage in philanthropy and have a visible impact in their local communities. While broader efforts will help attract Generation Z, they’re also interested in being hands-on in these efforts. Consider how employees can have volunteer opportunities as part of their employment, or participate in projects that impact their local communities. Examples may include food or toy drives, fundraisers for local charities and sponsoring local events.
Communications
Consider how topics highlighted in this toolkit can best be communicated to Generation Z. Communication strategies should consider how employers can best communicate content that resonates with Generation Z.
Recruitment Marketing
While a strong company culture, a positive impact on society and policies that are friendly to Generation Z will help with recruitment efforts, employers should review how these initiatives can be implemented into marketing and recruitment efforts. By highlighting positive aspects of an organization, employers will be able to build their employment brand within the community of Generation Z talent.
What You Can Do
As you determine what workplace benefits you currently offer that are attractive to Generation Z, include these as part of your recruitment strategy. Examples include telecommuting options, career development opportunities and expanded employee benefits. Include your company’s mission, impact and values in your recruiting pitch. Generation Z will be seeking employers who have values that align with their own. Consider how your company’s social impact can be highlighted when creating an ethos to pitch to Generation Z. Ensure that you are reaching Generation Z through their preferred channels. Make sure all job postings are mobile-friendly, and consider how you can best use tech platforms such as LinkedIn, Glassdoor and more. Recruitment efforts can also be boosted through popular social media channels utilized by Generation Z, such as Instagram and Snapchat.
Internal Communications
Effectively communicating with Generation Z doesn’t end with the recruitment process. As Generation Z joins the workforce, be sure to demonstrate how what they value is being lived out every day in alignment with organizational goals.
What You Can Do
Highlight the positive impact your organization is making on an ongoing basis — ensure that Generation Z is able to see that your values are not just words on the wall, but are lived out. Also, include communications about ways that employees can be involved with causes they are passionate about. Even once they begin employment at your organization, consider how you can best connect with Generation Z through their preferred communication channels. Younger employees are likely to prefer blog posts, short videos, podcasts and social media posts.
Benefits Offerings
Consider how benefits can be inclusive to what Generation Z is looking for in an employer. Key themes include expanded options for mental health, tuition assistance, opportunities for career growth and competitive compensation, which can be part of a comprehensive benefits package.
Comprehensive Benefits Package
To help create a benefits package resonates with Generation Z, consider implementing the following:
Affordable health care, including dental and vision — Generation Z takes pride in how they take care of their health and hope to receive rewards for their efforts. Employers can consider practices such as biometric health screenings, where healthy employees can be rewarded by paying less for health care premiums.
Mental health benefits — Generation Z values accessible mental health support, and implementing relevant mental health benefits can improve both recruiting and retention efforts. These benefits can include an employee assistance program (EAP) and more.
Student loan repayment — Generation Z Is entering the workforce with high amounts of student loans, and this debt is one of their most significant stressors. Providing programs that assist with repayment can offer a competitive advantage.
Educational assistance programs — Consider offering to pay for tuition, books and other education-related costs for employees wishing to further their education and improve their skill sets.
Critical illness — Consider critical illness insurance as part of a company-paid, or voluntary benefit for employees.
Pet insurance — Generation Z is passionate about their pets and values pet insurance as a benefit.
Discount programs — Employers can create partnerships with businesses to allow for discounts for employees. Examples may include gym memberships, stress-reducing massages, acupuncture or more where employees can receive these services at a lower cost.
Rewards
Recognition and performance-based rewards are essential for Generation Z, rather than purely face time and subjective performance measures. While younger employees are more likely to move jobs more often than their older counterparts, effectively rewarding and recognizing talent can boost retention efforts. Along with millennials, Generation Z hopes to receive recognition for productivity and understand how their hard work can translate into career growth and increased rewards. Generation Z has a competitive nature, and are open-minded about receiving critical feedback. According to LinkedIn, 97% report being receptive to feedback on an ongoing basis. Generation Z would like to be accountable for their contributions and hope that they receive rewards adequately.
Though seeking more than just compensation, Generation Z is entering the workforce with high amounts of student debt. According to a recent study by TransUnion, Generation Z have an average student loan debt of $24,473. While Generation Z values more than just competitive compensation, addressing compensation and total rewards in a straightforward, competitive manner and considering educational repayment assistance programs can give employers a competitive advantage.
Workplace Policies
Employers can consider how current policies can be friendly to Generation Z as they enter the workforce. When Generation Z feels their concerns are heard, they will be more likely to stay at an organization. Ensure that policies are friendly to Generation Z, but apply equally to all members of the workforce. Employers should consult with their legal counsel when creating or modifying internal practices, as there are laws protecting individuals against age discrimination — most importantly the Age Discrimination in Employment Act of 1967 (ADEA), which protects individuals who are 40 years of age or older from employment discrimination based on age. Under the ADEA, it is unlawful to discriminate against a person because of his or her age with respect to any term, condition or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments and training.
Flextime
Generation Z wants to work hard, but they want to have flexibility about how and when they do it. Flextime is a flexible schedule option in which employers allow employees to customize their schedules within a predetermined range of hours. Listed below are three ways organizations commonly structure flextime:
Flextime with core hours — Employers can establish core hours, such as 10 a.m. to 2 p.m., where the employee should be present.
Flextime with daily hours limits — Employers can establish a practice where employees must work 40 hours per week, with a cap of 9 hours per day.
Flextime with minimal or no restrictions — Under this structure, employees would be expected to complete 40 hours per week, at hours of their choosing.
Giving employees flextime allows them to schedule their lives around work without sacrificing work productivity. When employees are free to get their objectives accomplished, while still working full time, they are free to focus on doing the job at hand, rather than worrying about their personal lives and how they’ll get everywhere on time.
Telecommuting
More employers than ever before have expanded remote work practices. Consider how offering telecommuting options, an effective remote work environment and technology can help boost Generation Z recruitment and retention efforts. While, in some cases, remote work is being adopted out of necessity, many employees feel confident in their abilities to fulfill their roles remotely. According to research from Owl Labs, 83%of remote employees feel they operate at the same, if not higher, productivity level than they did while working in
the office. Many survey respondents noted feeling happier and more productive at home, with 70% stating that virtual meetings are less stressful than in-person meetings. With increased utilization of telecommuting, employers can use this opportunity to review current practices and optimize this experience for employees. Flexibility in work is a benefit that Generation Z values, and employers can consider how this benefit can be best implemented. For additional resources on best remote work practices, contact JH Berry Risk Services LLC.
Career Development and Mentorship
While Generation Z is known for hopping between jobs often, offering initiatives such as training programs, career-pathing and mentorship programs can boost retention. Laying out career paths will help Generation Z visualize and work toward goals. A mentorship program can both address intergenerational gaps and help new talent achieve these goals. While mentorship programs can benefit Generation Z talent entering the workforce, these relationships can benefit both the mentor and the mentee.
Summary
By considering the strategies mentioned in this toolkit, you can improve retention efforts at your organization for not only Generation Z, but all employees. While each generation is unique, Generation Z has many of the same values as their predecessors — to be well compensated, to feel a sense of purpose, to have good benefits and to be able to maintain a healthy work-life balance. Generation Z also seeks specific types of employment opportunities, such as working in high-tech environments, flexible work arrangements, and being part of an organization that has a tangible positive impact on society. By taking steps to increase retention, you can reduce turnover-related costs and continue to build talent from within. This, in turn, can improve your reputation within the community and increase employee morale — all of which can boost your recruiting efforts, and impact your bottom line. For more information about recruiting and retention strategies, contact JH Berry Risk Services LLC today.
Want to talk through how your benefits package stacks up for attracting and retaining younger talent? Explore our employee benefits services or reach out to our team. No pressure, just a conversation about what makes sense for your business.
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