Playbook For Attracting, Managing, And Retaining The Gen Z Workforce

Understanding and motivating the next workforce generation

With labor shortages surfacing in nearly every industry, companies are increasingly turning to Gen Z workers who are entering the workforce to fill vacancies. In fact, it is projected that nearly entry-level positions in the country will be occupied by Gen Z workers by 2030.
 
As digital natives, Gen Z workers have the potential to bring unique skills and valuable perspectives to the organizations where they work. Having experienced significant challenges at a young age—including the Covid-19 pandemic and entering the workforce during a period of considerable uncertainty—Gen Z workers possess a distinctive combination of resilience and empathy that can greatly benefit the modern workplace. If organizations want to effectively engage Gen Z employees, though, they need to understand what motivates this generation on a deeper level. By understanding, investing in, and nurturing this population of employees, companies and their managers can help shape the next generation of leaders.

 

Understanding Expectations and Motivations to Attract Gen Z Workers

Attracting and retaining talent across all generations is dependent on offering adequate compensation. But with the rise of wage transparency tools such as Glassdoor and Reddit, Gen Zers are particularly attuned to the importance of fair and equal pay. In Adobe’s Future Workforce Study, a majority of Gen Zers reported that their interest in submitting an application for a job significantly decreases if the company fails to disclose a salary range within the job posting. Since Gen Z workers are known to openly share information about their salaries with each other, they expect the same level of transparency from their employers regarding compensation.
 
Additionally, Gen Zers expect reassurance that their employer truly values their well-being and their physical and psychological health. Gen Z is very attuned to the importance of mental health and the need for employers and managers to support their psychological well-being. They are very comfortable discussing their mental health challenges and seek to normalize the discussion of anxiety, depression, neurodivergence, and other mental health topics in the workplace. 

Companies and managers must also be sensitive to Gen Z’s concern regarding avoiding toxic workplace cultures. They do more due diligence than previous generations to vet workplace culture before accepting a position and they can be skeptical of workplace well-being perks, such as “unlimited” vacation days, viewing them as band-aid solutions to larger problems or as superficial attempts to camouflage corporate culture that places undue emphasis on overworking and prioritizing one's career at the expense of one’s personal life.

Playbook for Attracting Gen Z:

1. Publish Pay Scales in Job Openings and Internally: Ensure salary information and pay scales are published for all job openings. While reviewing pay scales, conduct research to ensure pay scales reflect the market value of positions and that they are consistently applied across the organization.

2. Share How Pay is Determined: Have open and honest conversations with Gen Z employees about salary and career advancement in order to establish a sense of trust and commitment. Communicate transparently about pay practices, including how pay is determined and how it may be adjusted over time. Encourage employees to provide feedback and ask questions about pay practices, which can help to identify areas for future improvement.

3. Communicate Mental Health Support to Current Employees and Applicants: Ensure current employees and prospects are aware of all available mental health-related benefits and practices that support employee well-being.

4. Create and Promote Mental Health ERGs: Give employees time off for mental health days and offer and support mental health-related employee resource groups (ERGs). 

Adjust Management Styles to Support Gen Z Employees

A recent GoodHire survey found that 82% of employees said they would quit their jobs because of a bad manager. However, increasing the retention rates of Gen Z employees is only part of the goal when it comes to managing this generation. Managers have a unique opportunity to cultivate the full potential of this capable, committed group of young people, and to do so they must seek to understand their unique characteristics and expectations and adjust their managerial approaches accordingly.
 
To establish a stronger relationship and gain the trust of Gen Z, it is essential to adopt a philosophy of open communication. Rather than limiting information transfer to a "need-to-know-only" basis, adopting a more "open-access" information-sharing policy better satisfies Gen Z’s desire for more information and greater transparency. This recommendation even applies to information that may be difficult to hear or ultimately disadvantageous to the listener, such as news about budget cuts, supply chain challenges, or unsatisfactory business performance. Such transparency helps alleviate Gen Z's anxieties, provides them with a sense of control, and enables them to process a situation more effectively.
 
Generation Z also demands regular feedback. Having been raised in the era of social media, where rewards and likes are promptly granted, Gen Zers crave more feedback from their managers than previous generations. In fact, according to a survey on the State of Gen Z, 40% of Gen Z crave daily interactions with their managers and if they do not engage with their managers with this level of frequency, they often believe they have done something wrong.

Playbook for Managing Gen Z:

1. Create Numerous Channels for Communication: Gen Zers want a hyper-communicative leader. Managers should use various communication channels such as email, messaging apps, team meetings, or video conferences to ensure all employees have access to the information.

2. Be as Transparent as Possible: Managers should discuss results, performance, and outlook during team meetings. Employees across all age groups, but especially  Gen Z employees, want context for the information being shared to understand why it's important and how it impacts their work. Managers should create opportunities for the team to share and discuss the organization's strategy and their role in it while also being honest about business decisions. When possible, managers should also involve their team in the decision-making process.

3. Cultivate a Culture of Openness: Beyond communicating transparently, managers must foster open communication by providing platforms for dialogue, discussion, and collaborative problem-solving where there is a concerted effort to make sure that everyone's voice is heard. Managers should also display empathy and nurture a team culture that emphasizes openness, vulnerability, and mental recuperation time.

4. Tie Work to Business Value: Help employees understand the impact and importance of their work and allow them to take ownership and make decisions. Provide opportunities for autonomy in assignments handed to Gen Z employees and be careful not to micromanage them.

5. Support Mental Health Needs: By treating mental health on par with physical health, managers can enhance their team's overall productivity. Managers should check in with team members to assess their well-being and mental health. They should also be encouraged to share their own feelings, concerns, and ways of coping with challenges.

Tips for Retaining Gen Z Workers

Adequate compensation and enjoying the work are not enough to retain Gen Z employees for the longer term. Organizations must also offer ongoing professional growth and development opportunities. Gen Zers regularly mark themselves to market and ask themselves on a frequent basis whether they can envision a future at the company and whether there are sufficient opportunities for career advancement.

For Gen Z employees, a strong sense of purpose in their day-to-day work is a powerful motivator. Establishing a meaningful workplace mission and core values is paramount to earning the respect and loyalty of Gen Z employees, who place great emphasis on social awareness and expect their employers to make a tangible impact. Gen Z employees are wary of organizational statements regarding values and purpose that are not supported by actions or are perceived as disingenuous. 

They are more likely to engage with organizations that demonstrate a genuine commitment to their stated societal purpose. Organizations that create space for Gen Zers to be a solid part of that purpose and execute a personal mission will attract and retain top talent.

Playbook for Retaining Gen Z:

1. Establish a Sense of Purpose: Managers should arrange meetings and gatherings to deliberate on the team's vision and how it contributes to the organization's objectives. Dedicate time to elaborate on how the organization's broader purpose has a beneficial impact on society, aiming to overcome the perception that companies prioritize selfish interests over societal welfare and have no aspirations beyond making profits. Managers should help each Gen Z employee to connect the dots between their specific contribution to the team, the impact their work has on the greater organization, and visualize how their work makes a difference.

2. Actively Help Employees Develop New Skills: Provide employees with development opportunities and access to learning resources to enhance their skill sets and facilitate long-term employability in a constantly evolving work context. Assign challenging projects that correspond to their professional objectives and interests.

3. Provide Regular Performance-Related Feedback: Managers should double down on coaching by providing more ongoing and specific feedback to Gen Z team members that includes detailed examples and actionable steps to improve performance. They should ask probing questions like: What are you learning? What has been challenging for you? Gen Zers may require extra coaching support in areas such as how to listen, build relationships, work effectively on a team, and resolve conflict.

4. Chart a Career Progression Path: Encourage employees' career progression by arranging frequent development discussions, devising individualized career development plans, and openly discussing professional growth prospects. Clarify how each job role contributes to career advancement and how roles and responsibilities will evolve in the future.

As digital natives, Gen Z workers have the potential to bring unique skills and valuable perspectives to organizations. Given the importance of Gen Z and growing concerns regarding widespread employee disengagement, the question becomes how organizations can work to better engage this growing population of employees. 

Gen Z is the most achievement-oriented of all generations in the workforce. That spells an opportunity for organizations which tailor their policies, approaches, and strategies accordingly to win the talent war for Gen Z and cultivate the full potential of this capable, committed generation.

Heide Abelli is the Co-founder of SageX Inc. She is an Adjunct Professor of Management at Boston College where she has taught Gen Z students for nearly a decade. Heidi has held senior leadership positions at leading educational technology and training providers such as Skillsoft and Harvard Business Publishing where she developed award-winning, ground-breaking corporate training solutions. She is a seasoned veteran of product development, innovation and product management in the fields of corporate training and ed tech.