Generation Z is coming of age. Rarely has the world experienced so much change as has happened in their brief lifetimes. Politically, socially, technologically and economically, we are moving at warp speed.
These changes have created a generation very different from Millennials or any previous generation. Many retailers have already felt the wrath of Gen Z as consumers, who are well informed and have high expectations.
With the oldest now in their twenties, members of Gen Z are becoming key players in retailers’ talent strategies, and the moment of truth will soon arrive: will Gen Z, the true digital natives with “anything is possible” attitudes, be your next challenge or your biggest asset?
To ensure they become the latter requires an understanding of their mindset today. To that end, EY conducted a multigenerational survey of 1,800 people across the US. While we set out to gain insights into Gen Z, we also discovered important facts about Millennials.
A new generation enters the workforce
In the competition for talent, many companies have focused on understanding the needs of Millennials — those born between 1981 and 1996 — who they see as their current and near-term labor pool.
However, Gen Z are now entering the work force, and theirs is far from just another Millennial story. They are a unique generation with a global view and an entrepreneurial spirit. And they are ready to work hard to earn success.
For retailers and service industries, teenagers and those in their 20s have always been an important employee demographic. But we believe these young people are now more important than ever. They can help retailers to outcompete in our mobile-first, experience-obsessed society. This is their world, and they can help retailers understand it and succeed with unimagined innovations.
A more nuanced view of the Millennial workforce
Millennials tend to have higher and, some might say, unrealistic expectations about their lives and opportunities. This is likely the result of their growing up in a time of greater economic stability and their being raised by Baby Boomer parents who sheltered them from many of the dangers of the world and gave them a strong sense of their specialness.
This trait is reflected in the work attitudes of the subgroup we’ll call Older Millennials, those born between 1981 and 1988, who have challenged norms, are demanding more from employers, and have reshaped today’s workplace to be more casual, open and flexible.
These workers are coming into their own and are eager to fill today’s middle and senior management roles. Most companies recognize them well, even if they still struggle to make them feel fully embraced.
However, the working demands of Older Millennials are not consistent with those of younger generations. Younger Millennials, born 1989–96, and Gen Z, born 1997–2004, have different and arguably more realistic expectations.
Employee expectations have evolved with Younger Millennials and Gen Z
Harsh economic realities have been part of the lives of Younger Millennials and Gen Z as they’ve matured. They have experienced the global recession and its lasting impact and are living in a time of great social change.
They are the first generations for whom digital technology is native to their lifestyle, and so their parents were less able to shield them from frightening and upsetting stories in the news.
As a result, Gen Z and Younger Millennials are fundamentally different from Older Millennials, with new attitudes, values and life goals and different employment demands.
Younger Millennials and Gen Z have a “do-it-myself” mentality and entrepreneurial spirit. They’ve grown up turning to the internet, YouTube and their global peer group for answers. They’ve watched people their own age create successful companies.
This independence and entrepreneurial view is carrying over to the workplace. Unlike Older Millennials, they do not want a lot of guidance and do not expect frequent feedback from employers. More than half prefer independent work to teamwork. They want employers who won’t micromanage them and who will give them opportunities to create new processes and solutions.
When we asked Younger Millennials and Gen Z about the benefits they most wanted from employers, “feeling my ideas are valued” ranked very highly (#1 and #2, respectively). This ranked #4 for Older Millennials. The younger groups’ expectation is that their value will be recognized and financial benefits will follow as a result.