Making sense of Gen Z: employers seek answers on managing younger workers

Two years ago Jackie Cooper, chief brand officer at public relations firm Edelman, asked a panel of top marketing executives to name their biggest challenge. The answer took her by surprise.

“Every single one of the six said ‘Gen Z’,” she recalls. “I was knocked over by this.” The executives from a range of big companies, including a drinks group, media conglomerate and luxury goods maker, faced the same issue – how to better understand the next generation of consumers and the youngest cohort of their workforce.

The revelation led Cooper to launch Edelman’s “Gen Z lab”, which produces research and gives advice to business leaders trying to get to grips with the perceptions and motivations of the demographic now aged between about 14 and 26.

In 2022, Edelman surveyed more than 20,400 people across 14 countries to discover how Gen Z differs from older generations. It found the youngest respondents worried more about issues such as health and finances, were heavily involved in social and political causes, believed companies could do more to solve societal problems than governments and consumed based on their values.

“After we shared the data, companies were saying to us, ‘We love this … but what do we do with it now? How do we make this constructive for my marketing and, importantly, what do I do about my own workplace?’” says Cooper.

Those questions are fuelling the rise of Gen Z “whisperers” – advisers ranging from 20-something social media influencers and young employees, to big consulting firms, which are guiding the boardrooms of multinational companies to think strategically about recruiting and managing workers and capturing new customers.

They are encouraging company executives to adopt new practices – from communicating better with younger workers to seeking their views on issues such as transparency, sustainability and work-life balance.

Anxiety about younger people in the workplace has always been a feature of business life and issues differ across regions, levels of education and social class. But growing up with technology, coming of age during the pandemic and being more comfortable talking about private, social and political issues at work have stretched the gap between them and their older colleagues.

Gen Z and millennials, the generation that preceded them, now make up nearly half (46 per cent) of the full-time workforce in the US, according to research group Gallup, and is forcing companies to adapt in ways they have not had to before. The Edelman data shows Gen Z is influencing how we receive our news, what we buy and how we work and manage our finances.

“Our corporate clients … are not used to the extensive questions … Gen Z has [about] work-life balance, control over what they work on and how they do it, as well as the more expected demands for good pay, financial stability and fulfilment,” says Cooper.

Alison Taylor, clinical associate professor at NYU Stern School of Business, who also advises companies on ethical business practices, notes that “this generation is very difficult to impress”. “They have elevated expectations on everything from mental health to climate change … They’re skilled on social media and they don’t remember a time when companies were neutral on big issues.”

Gen Z’s support for social and political causes is already boosting activism within workplaces, putting pressure on management teams to be vocal on issues that they may have previously stayed silent on. “These individuals are getting to the commercial heart of decision making, and the guts of a business, and it’s really threatening,” adds Taylor.

Maxime Lakat, the 25-year-old co-head of Canadian non-profit Re-generation, which aims to mobilise young people to create a greener economy, says “companies are very worried about their ability to recruit or retain talent among the younger workforce. They’re definitely feeling that it’s becoming harder to get these individuals.”

He says Gen Z’s views about work and life have been shaped by the failures of people in power – from the fallout of the global financial crisis and effects of climate change to chaos in politics and minute-by-minute updates to their devices about tragic global wars. They are keen to work somewhere they can make an impact.

Earnest and armed with pages of statistics about Gen Z preoccupations and demands, he says: “A lot of younger people are becoming disillusioned with their jobs.” Many are unable to achieve certain milestones, such as buying a house, are more distrustful about those in authority, less patient about pay rises and promotions, and are not as loyal to employers, he adds.

“We are starting to see C-suite people getting more headaches about how to keep a positive reputation. Employee advocacy has become such a source of potential change that it can outweigh the power of a CEO.”

The fear that Gen Z consumers, or worse, a company’s own workforce, could publicly bring them down is one reason businesses are seeking external help. LinkedIn, PepsiCo and Snapchat are among those working with individuals pitching themselves as Gen Z experts, such as Jonah Stillman, Connor Blakley and Tiffany Zhong. These advisers are providing companies with insights into Gen Z’s preferences and expectations on issues such as flexible working to help businesses stay relevant and competitive.

Stillman, who runs a consultancy with his father seeking to understand generational differences, gave an example of the divide at a conference last year. They had asked workers what their preferred mode of communication was: email, text, phone or face to face. “Overwhelmingly, each time we’ve run the study, the answer was face-to-face communication … Just under 85 per cent of Gen Z said they preferred face-to-face communication.” However, he points out that means something different to younger workers – more than half of the respondents defined video calls such as on Zoom as face to face.

Communicating effectively with a generation that has less respect for corporate hierarchies and less tolerance of perceived wrongs is another challenge for employers. Phenomena such as “Quit-Tok”, where younger workers have been secretly filming video calls in which they are fired or leave their jobs, are an example of new reputational risks. Other grievances often end up on social media or with journalists. Many corporate advisers say for younger people it is about holding companies accountable and taking action in a considered manner. “This generation sees a lack of personal agency as a real dilemma. Accessing dirty secrets and then putting it all on social media … to them, this is really a constructive way forward,” says Taylor.

While multinational corporations have traditionally been viewed as a source of secure, stable incomes and steady career progression, there is a risk this is now changing. Michael Franklin, a 24-year-old speech writer who also advises businesses, is a good example of the challenges employers face in recruiting and retaining younger workers. “I don’t want one stream of income,” he says. “The way I see all these lay-offs happening, the instability of workforces and management changes at major corporations, I definitely don’t want to be stuck with one organisation. Finding different streams of income is a source of freedom and empowerment. If something isn’t working, I can … cut that work out, it’s way less risky.”

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Younger workers like him want flexibility and are less inclined to commit to one employer, says Franklin, often opting instead for portfolio careers from a young age, taking on work project by project.

“We have other interests and passions. For example, if you want me to do extra work, then we need to negotiate that. And I care about deliverables rather than the amount of time spent in a particular place or office,” he says. “Older generations have dealt with a lot of workplace trauma. They’re used to burnout and hustle culture. My generation, generally, are not living to work.”

Copyright The Financial Times Limited 2024