For the first time, there are four and sometimes even five generations in the workforce. More people are working well into their 60s, 70s and beyond. At the same time, Gen Z – those born between 1997 and 2012 – have begun entering the workforce.
This great multigenerational convergence brings new challenges as well as opportunities for employers already grappling with fundamental changes at work.
In-office or hybrid? Email or messaging apps? “There's just a lot more choice and confusion and fewer rules about how to work than when the workplace was more dominated by Boomers," says Lindsay Pollak, a workplace expert and New York Times best-selling author of The Remix: How to Lead and Succeed in the Multigenerational Workplace.
In Deloitte’s 2021 Global Human Capital Trends survey, 70% of organizations said leading multi-generational workforces is important or very important for their success. Just 10% feel well prepared to do so.1
Getting it right will be a prerequisite for success. To fill the roughly 10 million job openings in the U.S. amid one of the tightest labor markets in recent history, employers will be leaning heavily on young Millennials and the first wave of Gen Zers entering the job market. Understanding this diverse, values-driven demographic will be key to attracting and retaining talent in the years ahead.
Hello, Gen Z
So who are these young workers?
For starters, they're the most ethnically diverse generation in history – 52% of Gen Zs living in the U.S. are white, compared with 75% for Baby Boomers. They embrace flexible notions of identity and relationships. They're also the first cohort to grow up not knowing a time before smartphones and the Internet. These digital natives are steeped in social media and global culture, and accustomed to having a say.2
Where a company stands on social and environmental issues has a significant impact on Gen Z and Millennials' decisions to stick with an employer, according to a 2022 Ernst & Young survey. 3
40% of Gen Zs are looking to leave their jobs within two years.
– Deloitte Insights
And they're willing to jump ship if a company doesn't live up to those expectations. Gen Z and young Millennials were at the forefront of the Great Resignation and the quiet quitting trend – 40% of Gen Zs and nearly a quarter of Millennials are looking to leave their jobs within two years, according to Deloitte's latest survey of more than 22,000 global youth. Pay was the top reason, however 2 in 5 of those surveyed have rejected a job or assignment because it did not align with their values.4
That fact has fed an impression that these young adults are disloyal job hoppers. The reality is more nuanced. A generational lens does not capture the sheer variety of humans who happen to be born in the same time period and is just one way to analyze a workforce. When asked his opinion, David Mallon, vice president and chief analyst at Deloitte Consulting, says that it is more useful to look at job types to understand trends – for example, creatives and engineers.
Life, Interrupted
There is no doubt that people are profoundly shaped by the events and experiences that defined their coming of age, and for Gen Z and young Millennials, the Covid-19 pandemic looms large. The lockdown upended their lives and threw them into uncertainty just as many were starting their careers. Some were furloughed before they barely got started; others watched parents and family members lose jobs as the economy shut down. Supply chain disruptions have driven an inflationary cycle not seen since the 1970s.
From that perspective, their focus on well-paying jobs is not surprising. In the Deloitte survey, 29% of Gen Z and 36% of Millennials singled out cost of living as their greatest concern. Almost half live paycheck to paycheck and worry about covering their expenses. More than a quarter of Gen Zs and Millennials expressed concern that they will not be able to retire comfortably.5
Climate change, gun violence and the pressures of social media also weigh on them. Even before Covid, young people reported significant levels of depression. The isolation and anxiety of the pandemic amplified those issues, prompting the U.S. Surgeon General to declare a youth mental health crisis in late 2021 amid an alarming rise in suicides and self-harm.6,7
Gen Z workers report higher levels of stress than other age cohorts: 53% are highly stressed in a typical week and 44% feel depressed or anxious at least a few times per week.
– 2023 Future of Benefits Study, The Hartford
Covid has abated, but mental health concerns have lingered. Gen Z workers report higher levels of stress than other age cohorts: 53% are highly stressed in a typical week and 44% feel depressed or anxious at least a few times per week, according to The Hartford's latest Future of Benefits Study. “The future of work depends on meaningful action today to support next-gen workers' emotional and mental well-being," said The Hartford's chairman and CEO Christopher Swift.
On-site yoga, massage and meditation rooms proliferated over the past decade in Silicon Valley and other workplaces. But now, post-Covid mental health benefits are key. Depression and anxiety cost the global economy some $1 trillion a year in lost productivity, according to the World Health Organization.8
The U.S. Surgeon General's health advisory recommends employers provide comprehensive, affordable, and age-appropriate mental health care for all employees and their families, including dependent children. It also suggests creating space for employees to speak up about how they are feeling and encourages managers to discuss mental health and model healthy behaviors.
More than three-quarters of U.S. employers currently offer or plan to offer mental health resources, according to a 2022 workplace mental health report by SHRM Foundation. And young workers are taking them up. Roughly three out of four of Gen Z and Millennials have made use of mental health benefits offered by their employers, according to one recent analysis.9,10
Roughly three out of four of Gen Z and Millennials have made use of mental health benefits offered by their employers, according to one recent analysis.
COVID's Curveball
Every generation has suffered from stereotypes. And Gen Z, being new to the workplace, may also be misunderstood.
Gen Z employees are still making up for the curveball they were thrown and worry they are being judged. Steven Gakos, a 24-year-old from Hoboken, New Jersey, had graduated from college and was looking forward to starting a prestigious training program at a big accounting firm when COVID hit. Instead of immersing himself in the corporate culture and bonding with fellow first-year recruits, he logged in remotely from his parent's basement.
“Companies need to realize that we started in this weird environment, and we might be a little behind compared to the people before us, but not due to us not working hard," says Gakos. “We were given a slight disadvantage, but it's something we can overcome.”
Now he goes into the office at the Fortune 500 company where he works for three days a week – an arrangement that provides both the flexibility and the deeper connection he craves. “Going into the office gives you more of a sense of purpose,” says Gakos. “You feel like you're accomplishing something together more when you're in person.” He says he is also able to pick up the broader context of projects he's working on from conversations in the office.
Like Gakos, the majority of Gen Z and young Millennial workers prefer a hybrid work environment. In Morning Consult's State of Workers 2023 report, Gen Z workers led their cohorts in preferring to work in-person. A survey of more than 11,000 high-performing high school and college students backs that up: 67% expect in-person training from their prospective employers. And, while work-life balance and a flexible schedule score high, unlike their older workforce counterparts, just 8% cited the opportunity to work from home as a key perk.11
Rethinking The Workplace
The pandemic and ensuing Great Resignation present an opportunity for organizations to reassess the work environment and provide a more fulfilling experience for all their employees. Baby Boomers may be working longer, but the old conventions and top-down hierarchies that may have characterized some workplaces are giving way to a more flexible, transparent and balanced approach. There is no one-size-fits-all template, but listening to every cohort of workers can lead to changes that benefit employees across all age groups.
“Some of the things that Gen Z and Millennials seem to want from work and from their employer, well, lots of people want those things," says Delottie's Mallon.
Gen Z and Millennials are less likely to belong to civic organizations or attend church, so they “are seeking that connection at work in a lot of ways."
– Lindsay Pollak, a workplace expert and New York Times best-selling author of The Remix: How to Lead and Succeed in the Multigenerational Workplace
That starts with values and purpose. Gen Z and young Millennials are less likely to belong to civic organizations or attend church, so they “are seeking that connection at work in a lot of ways," says Pollak. “Purpose resonates across all generations, but it is particularly important [for young workers].”
Social media-saturated Gen Z also wants to have a voice. Pollak suggests that companies make use of employee surveys and town halls with senior leaders to address that need. She is also an advocate for reverse mentoring, where senior leaders are matched with a young employee that they can listen to and learn from.
Reverse mentoring is a practice many companies use to understand everything from Tik Tok to how to further their diversity, equity and inclusion goals. The benefits flow both ways: senior managers gain new understanding, while their young mentors feel listened to and valued. Diverse perspectives have been shown to improve corporate performance.
To suit hybrid work environments and far-flung employees, remote mentoring has also proven effective at companies including The Hartford. Such flexibility can foster an inclusive culture for employees who may have different caregiving, health and ability needs.
“When you have a multigenerational workplace, not to mention all the other aspects of diversity, you have to offer different choices,” says Pollak, whether that be benefits or work schedules or communication methods. Companies should retain the best practices of traditional workplaces and add in new ideas, she says, the way you "remix" an old song to update it.
Gen Z will influence the workplace for years to come – at least until Gen Alpha comes along and potentially upends it all.
1 “The Postgenerational Workforce,” Deloitte Insights, May 15, 2020
2 “What We Know About Gen Z So Far,” Pew Research Center, May 14, 2020
3 The 2022 EY US Generation Survey: Addressing Diverse Workplace Preferences, Ernst & Young, 2022
4 The Postgenerational Workforce,” Deloitte Insights, May 15, 2020
5 The Postgenerational Workforce,” Deloitte Insights, May 15, 2020
6 Most U.S. Teens See Anxiety and Depression as a Major Problem Among Their Peers, Pew Research, Feb. 20, 2019
7 Protecting Youth Mental Health: The U.S. Surgeon General’s Advisory, 2021
8 Mental Health at Work, World Health Organization, Sept. 28, 2022
9 Mental Health In America: A 2022 Workplace Report, SHRM Foundation, 2022
10 “More younger employees use workplace mental wellness benefits, say they are ‘very important’,” Securian Financial, March 06, 2023
11 State of Workers 2023, Morning Consult, April 2023
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