Preparing for Gen Z: Why businesses need to prioritize well-being

Last year, I shared a note from my daughter addressed to her classmates, recognizing the importance of protecting mental health and well-being during the COVID-19 pandemic. I remain incredibly proud of her advocacy, and I continue to be impressed by the way my kids’ generation leads the conversation on mental health.

According to a recent McKinsey survey of Gen Z respondents aged 16 to 24 that will be published this spring, they are more likely to be less physically, socially and emotionally well than other generations. In fact, 25% of Gen Z respondents reported not being emotionally well – that’s almost two times more likely than Millennials and Gen X respondents (13% each) and more than three times more likely than Baby Boomer respondents (8%).

Gen Z represents the young people – recent high-school and college graduates – who have just entered the worst economy in decades. In April 2020, workers aged 18 to 24 faced 27% unemployment, with 13% of this segment ceasing to look for work. While employment has largely recovered, this segment has exited the workforce at twice the rate of other age groups since the start of the pandemic. At the same time, the need for occupational shifts is expected to affect younger workers more than older workers for years to come.

 Now especially, how business leaders address employee mental health and well-being will determine whether we achieve an inclusive economic recovery. At McKinsey, we are beginning to see feedback from our clients and colleagues to inform the following practices, which are actions we can all implement.

Invest in mental health interventions

From a work-product perspective, mental health investments can have concrete effects on employee productivity and well-being. In fact, when treated for mental illness, 80% of employees report improved levels of work efficacy and satisfaction. But the expectations of employees – especially those just entering the workforce – is growing.

Gen Z wants its employers to provide more support around mental health. The good news is, we have a place to start. The majority of employers (90%) recognize COVID-19 and remote work are impacting employee mental health and productivity. In response, companies are making investments to provide access to professional support, improve behavioral health literacy and promote well-being.

These investments are critical for employers looking to recruit and retain top talent as well. Soon, the availability of mental health benefits could be a deal-breaker for Gen Z candidates. Approximately 3 in 5 Gen Z respondents reported that employer behavioral health offerings inform their decisions about selecting or staying with an employer. Only about 1 in 3 Baby Boomer respondents said the same.

Understand and meet the need

Mental health exists across a continuum — with thriving mental health on one end, serious mental illnesses at the other, and a range of conditions that vary in intensity in between.

At McKinsey, one action we started during the pandemic was very simple. Each Wednesday, we sent a one- to three-question survey, always starting with, “How are you?” It has allowed us to get an automatic pulse of sentiments across the continuum by geography, practice and role. This information helps us intervene when needed, simply by starting the conversation.

We also recommend analyzing the impact of stress on your workforce, especially among those falling within the more severe end of the mental health continuum. Anonymized, confidential and aggregated data — such as the data from disability claims and benefit reports — offer us insight into whether we are truly meeting employees’ needs and what progress we are making.

Know the signs of distress and model well-being

I often emphasize that well-being is a skill everyone can learn and model. Similarly, navigating conversations around distress is an indispensable competency for modern leaders. We must equip our leaders – and this extends well beyond the c-suite – with supportive skills, language and norms so they can model positive habits to achieve well-being.

Start with an open dialogue, and ask if your colleagues are taking regular breaks, prioritizing sleep and checking in on one another. Get creative. Maybe take a page from my daughter’s playbook and send your teammates a supportive letter.

It’s up to us to create tangible change that can address mental health for the next generation and for the young workers we’re recruiting and virtually on-boarding. This may mean promoting positive elements of well-being, providing the resources for those in need, or extending a little extra grace or space to our colleagues. Our success as a team, and as a society, depends on it.