Gen Z: The lazy, job-hopping generation or a cohort in search of opportunities and the alignment of values?

Background and context:

At present, Gen Z – individuals, born between 1997 and 2012, make up 30% of the global population and are predicted to make up 27% of the global workforce by 2025 (Zurich Insurance, 2024). With many employers feeling this generation is far different from those prior, the question as to how best to recruit and retain these individuals is continually being raised.

Gen Z are entering into a very different workforce from generations prior and moreover, have unique lived experiences, which arguably have influenced their outlook.

• ?Many have grown up witnessing economic hardship as a result of the 2008 recession and recently have come of age or entered the workforce amidst the Covid-19 pandemic.
• This has influenced their views surrounding economic security and income but also, they have witnessed first-hand the shift to remote and hybrid working styles.

This review of current literature aims to explore the attributes of Gen Z as they enter the workforce, reasons supporting their recruitment and retention within jobs, as well as how businesses should adapt to meet this generation’s expectations.

The change to workplaces and workforces:

?It must be recognised that Gen Z are entering the workforce amongst a shift in overall demographic.

• Since October 2023, 9.7 % of UK businesses have reported a shortage of talent, due to the large number of boomers retiring daily (Statista, 2023) (Barron’s, 2018).
• Compounded by the growing reduction in percentage labour force participation, there is evidence of larger scale restructuring and demographical change within the industry (Dan Voorhis, 2014) (Deloitte, 2019).
• The types of jobs Gen Z are entering into has changed. Historically, young people entered the workforce at the “bottom of the ladder”. The introduction of technology has made many of these roles redundant, due to the automation of tasks.
• Average education levels are higher. Gen Z are highly educated and aware of their value (NET, 2019).
• Flexibility is expected. ?47% of Gen Z report prioritising work-life balance (Deloitte, 2024). However, Gen Z are also in search of the socialisation and community which in person work provides.
• ?11% of Gen Z report wanting to work from home, unlike 34% of older generations and 74% of Gen Z want hybrid working, compared to 52% of non-Gen Z-ers (Mintel, 2024).

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Key findings:

The narrative that Gen Z is quick to transfer from one company to another and lack the loyalty to companies that older generations possessed, is widespread. In part it is true:

• Members of Gen Z are changing jobs at 134% rate higher than they were in 2019. (LinkedIn Data, 2024)
• 39% of Gen Z state that they are likely to quit their jobs in the next year; this is compared to a rate of 25% amongst all other workers. (YouGov, 2024)
• The average job tenure for Gen Z individuals is 2 years and 2 months, which is under half the length of time for Gen X and nearly a quarter of Boomers average (French Chamber of Great Britain, 2023).

What is different are the reasons why young people are choosing to change jobs and the factors which are making them stay.

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What is attracting Gen Z to roles?

?Gen Z are less financially motivated than previous generations.

The top reasons Gen Z stated for choosing to join a new company were largely the same as other generations. However, there are some areas of differentiation.

• Like previous generations, Gen Z values workplace flexibility, reliable and supportive people at work, and safe workplace environments.
• Career development and advancement potential were the highest driving factor for Gen Z joining new roles (McKinsey & Company, 2024).
• ?Older generations state that the highest influence behind accepting a job offer was adequate total compensation.
• Gen Z’s desire to find roles which they feel provide “meaningful work” was ranked as a higher priority (3rd) than older generations (4th) (McKinsey & Company, 2024).
• 83% of Gen Z state they consider an organization’s commitment to diversity, equity and inclusion when choosing a job (Monster, 2024).

Is this due to Gen Z’s current junior position within companies, motivating them to prioritise progression opportunities over financial incentives??

?Will Gen Z grow to prioritise financial incentives over meaningful work and career development opportunities as they progress in seniority and experiences external financial pressure?

• The answer to these questions lacks evidence, but Gen Z are actively highlighting a conscientiousness far above that of the older generations did when at similar points of their career.

Why are Gen Z leaving roles?

?When looking at why Gen Z chose to leave positions, the reasons largely are reflective of all workers irrespective of age but there is a push for opportunity and values.

Previous generations have largely been leaving jobs due to companies not meeting variables which would be expected i.e. compensation and competitive salaries. The majority of Gen Z are changing jobs due to companies not meeting their values and aspirations.

• Gen Z are less financially motivated with younger individuals placing the importance of overall adequate compensation two ranks below older generations (McKinsey & Company, 2024)?

Gen Z stated a lack of meaningful work and a misalignment of values as the second greatest driving factor for leaving a current position (McKinsey & Company, 2024). Amongst all other generations the need for meaningful work was labelled as the fourth (Millennials and Gen X) or fifth (Boomers) reason for leaving a job.

• 54% of Gen Z attest to having put pressure on employers to improve sustainability practices
• 46% state that they have already, or plan to change industry, due to poor climate change practices (Deloitte, 2024).

When Gen Z’s desire for career development is not met, this is listed as the largest contributing factor when choosing to leave jobs.

• Close to 45% of Gen Z state they consider looking for new employment when met with a lack of career development or a clear progression strategy (Cypher,2024).
• 31% of young workers state that a lack of L&D negatively affected their job satisfaction (Cypher, 2024)

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?What attributes are retaining Gen Z within jobs?

The reasons Gen Z are choosing to remain in their current companies differs greatly from other generations.

Whilst older generations placed adequate total compensation as the highest variable keeping them at their current job, Gen Z valued this factor lowest of five variables (McKinsey & Company, 2024). Individuals above 35 years of age valued prospective career development and progression as the lowest incentive for remaining in a job, unlike Gen Z who placed this as the second highest reason for remaining in a job, behind the flexibility of their workplace (McKinsey & Company, 2024).

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• 97% of young individuals with mentorship say it is highly valuable but only 37% of professionals have access to a mentor. It is apparent that such programs are vital with 84% of Fortune 500 companies having internal mentorship programs (Forbes, 2022)(Forbes, 2019).
• Workplace flexibility remained a key motivator of retention, amongst those age 18 to 34, and younger employees are in search of choice regarding the hours and location of their work.
• 45% of Gen Z now say that a four day in-person work week is preferable and 59% state that they prioritise flexibility (Business insider, 2024)
• 87% of Gen Z state that mental health and wellbeing at work is essential. Up to 46% of young employees state it is essential for employer’s healthcare plans to include mental health coverage, with a further 45% stating that it is important (Handshake,2023).
• Companies are listening to this desire. On average, 4% of job descriptions now mention mental healthcare and 2% of financial services job descriptions now mention mental health, compared to less than 0.1% four years ago (Handshake, 2024).

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Recommendations from this review?

Evidently, there is a need for employers to revaluate how they attract and retain Gen Z individuals. This generation, whilst not entirely unconventional, are undeniably looking for different working environments and benefits to those of previous generations.?

1. The reasons Gen Z are attracted to businesses and choose to remain within companies is changing. Whilst previous generations have been driven by financial motivations, Gen Z are displaying social conscientiousness as a necessity when evaluating employment. Gen Z have made evident that not meeting these values is a deal breaker for their loyalty to companies.

Companies need to explore how they:

• Communicate their values to prospective employees
• Ensure that they are mirroring the morals of emerging talent to be considered as favoured employers
• Ensure that leadership is diverse and inclusive to create a culture reflective of the younger generation

2. Companies should invest in developing and communicating clear methods for professional development and advancement within companies. Whilst businesses cannot ensure young talent will want to continue within an organisation there is a need to demonstrate a clear path for success, which matches with the aspirations of Gen Z.

?This can be achieved through:

• Internal apprenticeship programs
• Pushing young talent to gather a variety of skills within organisations, without presenting a single route of specialisation and advancement.
• Organisational formats need to be reflective of the needs of Gen Z talent. Whilst hierarchical pathways were accepted by previous generations, it is unlikely that Gen Z will continue to be receptive to this format.

?3. There remains a need for companies to recognise Gen Z’s need for flexibility as well as care. Instead of the narrative that Gen Z are disengaged and looking for the shortcuts in employment, businesses need to accept the nuances of this generation.

Instead of equating flexibility with laziness, businesses need to:

• Communicate companies’ expectations surrounding remote, hybrid and in-person working
• Offer flexibility in conjunction with opportunities to socialise within the workplace
• Provide inclusive mental health care to improve retention of employees

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Questions for consideration

This review of literature indicates promising opportunities to attract and retain the necessary Gen Z talent. Despite the narrative of an uninterested and lazy generation, Gen Z’s views regarding the workplace highlight the need for businesses to adjust the ways in which they ensure employees feel valued.

There remain many questions when exploring Gen Z’s opinions on employment:

• With a greater range of age groups currently within the workplace, will businesses be able to effectively accommodate Gen Z’s preferences whilst balancing older generations?
• Can younger employees’ preference for varied employment and short job tenure be significantly influenced by implementing new strategies for retention?
• Are Gen Z truly voicing novel ideas within the workplace or instead are findings reflective of this generation’s stage of life and employment?
• Should the industry be recognising that the changes we are witnessing are reflective of larger employment evolution and irrespective of Gen Z?

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Report by Lexie Cook, EP Business in Hospitality.

If you would like to contact EP Business in Hospitality in regards to this report, please email [email protected]

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