The labor shortage in the US will be long-lasting because of low birth rates, retiring baby boomers, immigration that is not up to the demand for skilled and unskilled labor, and the difficulties of automating professional services. To overcome these factors, you need to create a work environment that the youngest generation will want to join. You need to show the love to Generation Z.
While it is tempting to assume Generation Z is a mirror image of millennials, that will be a mistake. They share much of millennials’ political and social attitudes, such as believe a that big government will solve problems, the importance of diversity and inclusion, distrust of big business, and an overwhelming fear of global warming. However, Generation Z’s upbringing, experiences, and views on the ideal workplace make them hugely different.
Generation Z was born from 1997 to 2012. The oldest Generation Z employees are 24 years old. Later in this decade, Gen Z will comprise 40 percent of the global workforce. Generation Z is the first generation to be truly digitally native. Growing up, they were surrounded by mobile and touch screen devices. Generation Z learned to swipe before they learned to speak. They are more racially and ethnically diverse than any other US generation and are on their way to being better educated.
They know hardship. Generation Z has had family members experience job loss and adversity. In a March 2020 Pew Research Center survey, half of the oldest Gen Z members reported that they or someone in their household had lost a job or taken a cut in pay because of the pandemic.
Watching family members suffer during the 2008 recession and during COVID19 has made them wary of big business and that government is required to solve problems and reverse global warming. Fewer than half of Generation Z and millennial respondents see business as having a positive impact on society, according to Deloitte’s research.
Research from several sources such as Deloitte, Gallup, and the ADP Research Institute (Marcus Buckingham) reveal that both millennials and Generation Z report high levels of stress and mental health issues, especially during the pandemic. As remedies, they want an employer who provides for work/life integration and balance, paid time off, good health care, and wellbeing at work.
A majority of both millennials and Generation Z members (70 and 69 percent) believe that businesses prioritize their own agendas over the good of society, and most (62 and 59 percent) also believe that companies have no ambition beyond making money.
Workplace safety and flexibility are particularly important to them. While Generation Z understands they will be called to return to the office a few days a week, they do not want to return until they believe it is safe. Younger workers often do not have the home environment conducive for hybrid and remote working like older generations. However, they still want work/life balance — and options to avoid disruptions at work and long commutes.
Employers who want success recruiting Generation Z will need to work on their employer brands to show the value they bring to society. These brands need to articulate how they have kept their employees safe during the worst of the pandemic, their options for hybrid working, and testimonials from Generation Z employees on the chill working environment.
They expect the job application and work experience to be like shopping on Amazon. If it takes them more than 10 minutes to apply for your jobs online, they will probably not finish the application. Their social media presence is vastly different from previous generations, according to Pew Research. Generation Z members report that they are on social media either constantly (at 45 percent) or several times a day (at 44 percent). When recruiting them, you probably will not find them on Facebook, Twitter, or LinkedIn. Their top social media channel is YouTube at 85 percent, followed by Instagram at 72 percent, Snapchat at 69 percent. Facebook is at 51 percent, and Twitter is much lower. See Pew Research’s chart on social media usage at right.
When recruiting them, I recommend you try YouTube, Instagram, Snapchat, and now TikTok.
At work, they will expect that their employers have intelligent, easy-to-use digital technology. They expect answers to their work-related questions to be as fast and easy as ordering a product from Amazon or finding an instruction video on YouTube. If your onboarding process is onerous or if they have to call and wait for an answer from an HR or IT team member or get a help desk ticket number for a service, they will probably leave your company for a more digitally savvy organization.
To identify the top concerns of workers under the age of 30, Cause and Social Influence researchers conducted a quantitative online survey fielded June 25, 2021, of 1,000 young Americans (ages 18-30) – a nationally representative sample based on census-projected ethnic and demographic composition. With this response rate, the data has a 95 percent confidence interval and a three percent margin of error.
Their research found that the number one priority for these young workers was salary, at 36 percent, followed by employee benefits such as health insurance, retirement plans, and bonuses, at 23 percent.
Adding credence to Cause and Social Influence’s research is the surge in salaries and wages in the past three months. Total private-sector US wages are now up 7.9 percent from February 2020, and the wages for low-wage earners in leisure and hospitality are up 10.4 percent, according to the US Labor Department.
Giving the issues Generation Z is facing today and what they want from an employer, I recommend five strategies:
- Reach out to Generation Z where they are online. While they do look at job postings, you need to find them on social media such as YouTube, TikTok, Instagram, and Snapchat. The typical, written job posting won’t attract them. Your initial post ought to be a 30-second video of a Generation Z employee talking authentically about the positive work environment in a self-made video on a hand-held device. Other topics can include the chill work your organization does, the learning offered, and how you kept — and will continue to keep — employees safe during the pandemic. It is not just one video, but a stream of them that continue a dialogue on your work environment and brand. Forget the slick marketing. They will not believe it. These strategies also work as part of your college recruiting.
- Pay market wages and offer good benefits. This workforce knows there is a shortage, and they will not work for the businesses that pay poorly. The number of rejected offers and ghosting of interviews and offers has gone through the roof. Your planning for next year’s salary structure change should be in the range of 6.5 percent, depending on your industry and region of the country. Good benefits include health care benefits, paid time off, and 401(k)s with an excellent match.
- Offer flexible working options and wellbeing to address work-life balance. Several surveys, such as Limeade and Gartner, show that around 60 percent of the workforce does not want to return to work in the office five days a week, 9 to 5. I learn of stories every week of employers who have had to reverse calling all office workers back to the office because of workers saying they will quit rather than return. While younger workers have more issues with working with small apartments or young children, they also want options to address work-life balance.
- Provide digital transformation of HR and work processes. Young workers are digital natives. They expect the workplace to be as easy to navigate, collaborate, and transact as it is on Amazon. I have a few questions for you. Is your job application process one click? Is your onboarding process as easy as making purchases on Amazon? When employees have a question, do they have to call a call center and get a ticket? Do you provide easy-to-watch learning videos (either internally produced or online) and coaching? Can remote team members collaborate with each other as easily as collocated teams? If you answer “no” to these questions, you need to make serious investments in digital technology.
- Show Trust. Generation Z is suspicious of business. It would be best to have managers who can relate with them. It starts with trust and building relationships. Certainly, managers need to cover the big picture, set goals and expectations, define team norms, and provide timely feedback and coaching. But study after study shows that of all of these actions, the most important is to build trust with employees, especially with new, younger employees.
The US labor shortage isn’t dissipating quickly. You need to put in place these strategies to attract and retain Generation Z workers.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting, managing partner of InnovationOne, and Sales Advisor to MeBeBot. He works with companies to transform HR, implement remote work, recruit executives, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at www.VictorHRConsultant.com.