Next-gen workforce: secret weapon or biggest challenge?

By Marcie Merriman

EY Americas Cultural Insights & Customer Strategy Leader

Student of human behavior, lover of transformative design. Living at the intersection of culture, commerce and technology to build human-centered experiences. Catalyst. Entrepreneur. Mom.

8 minute read 1 Jun 2016

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Consumer products companies have long focused on Millennials. But could Generation Z represent a bigger challenge?

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.

Top 3 benefits wanted from employees

Gen Z Younger Millennials Older Millennials
Health insurance coverage Feeling my ideas are valued Health insurance coverage
Feeling my ideas are valued Health insurance coverage Work-life balance
Recognition for my contribution Work-life balance Vacation/paid time off

Outside of health insurance coverage, Younger Millennials and Gen Z do not rate benefits like vacation, paid time off and work-life balance as highly as Older Millennials.

Volunteering and community work are not the high priority for Gen Z and Younger Millennials that some companies may think (or the media has suggested). Granted, this may be attributable to age and life stage, or how long they’ve been in the workforce. So perhaps this will change as they get older.

On the other hand, it may be a fundamental change based on what’s important to younger workers (purpose-driven pursuits rather than economic ones, for example). Companies cannot safely assume younger employees will want what the current workforce wants.

Being part of their community (beyond family and friends) and contributing to the social fabric are actually more important to Older Millennials than to any other group. Perhaps stronger now that they themselves are having children, these priorities were evident in Older Millennials even in their teens and early twenties. This difference between the older and younger generations is worth noting for companies that use volunteering programs as a way to attract younger talent.

Gen Z, Younger Millennials and Older Millennial have different priorities

Q: What’s important to you as you think about your life today and your future goals?

Enjoying time with friends and family

78% — Older Millennials

69% — Younger Millennials

65% — Gen Z

Taking vacations

66% — Older Millennials

47% — Younger Millennials

44% — Gen Z


47% — Older Millennials

36% — Younger Millennials

33% — Gen Z

The gender story is a complex one

Overall, flexibility and a balance between work and life responsibilities are now as important to men as they are to women. In fact, more Older Millennial men than women say a balance between work and life is important to them (81% vs. 73%).

Both men and women want the option to work remotely away from the office and flexible working hours. It is no longer accurate to assume women alone want these benefits, or that this is driven strictly by family-related needs.

Work-life balance is important to both men and women

  Men Women
Balance work-life responsibilities 73% 73%
Flexible working hours 63% 65%
Able to take extended time off for personal interest 58% 58%
Option to work remotely 53% 49%

Q: When considering job satisfaction or career goals, would you consider this one of the three most important job benefit?

Will the gender equality gap widen with Millennials?

Women from younger generations are pushing back from the notion exhorted by their Boomer mothers that they can “have it all.” Only 55% of Millennial women aspire to be in a leadership position, only 50% want a high-level position or title and only 61% aspire for a high-level salary — figures about 20 points lower than for men of the same age.

This creates a major challenge for companies looking to hire future female leaders. Companies need to figure out how to avoid losing this generation of female leaders. And they need to address this issue immediately, because it does not mark a trend away from valuing women’s rights — Gen Z sees gender equality as a vital and nonnegotiable right — and this generation is entering the workforce now.

How to turn next-gen into competitive advantage

  1. Feed younger generations’ hunger to learn
    Younger Millennials and Gen Z are realists who believe they can never be too prepared or know too much. Career-focused perks and professional development opportunities, e.g., higher education benefits and training courses that help them stay ahead of the curve, are more important than flexible schedules and open work environments.
  2. Recognize differences among Millennials
    Don’t assume Millennials as a group have consistent needs and desire similar work benefits. This large segment of the workforce is in fact divided into different groups, in different life stages formed by very different life events. Attracting and retaining Older and Younger Millennials, as well as different genders, may require a range of approaches.
  3. Speak to their independent nature
    Gen Z and Younger Millennials want to take things into their own hands when it comes to the workplace. They want to set their own goals and have their opinions heard. Entrepreneurial companies can more easily take advantage of this mentality, while large companies can add entrepreneurial opportunities to their operating models.
  4. Understand life priorities matter ... and evolve
    Our research shows that as employees get older, achieving work-life balance becomes more important for both genders. It is no longer enough merely to suggest better balance opportunities; employees are often reluctant to take advantage of them in fear of how they might be perceived by coworkers and management. Employers must change organizational norms by openly recognizing the importance of priorities outside work.
  5. Crack the gender equality code
    While companies are increasingly recognizing the advantages of having diversity in leadership, women remain reluctant to take the leap. Companies that identify and work through the perceived or imposed barriers to gain the loyalty of these women will gain short- and long-term competitive advantage.



To succeed with Older Millennials, Younger Millennials and Gen Z, retailers must understand how they differ not only from previous generations, but also from each other.

About this article

By Marcie Merriman

EY Americas Cultural Insights & Customer Strategy Leader

Student of human behavior, lover of transformative design. Living at the intersection of culture, commerce and technology to build human-centered experiences. Catalyst. Entrepreneur. Mom.