Hiring and retaining Generation Z
Published on 5 October 2023 by Andrew Owen (5 minutes)
Economist and former Greece finance minister Yanis Varoufakis has a new book out called “Technofeudalism: What Killed Capitalism”. I’m waiting for it to come out in paperback. From the dust jacket:
Insane sums of money that were supposed to re-float our economies in the wake of the financial crisis and the pandemic have ended up supercharging big tech’s hold over every aspect of the economy. Capitalism’s twin pillars – markets and profit – have been replaced with big tech’s platforms and rents. Meanwhile, with every click and scroll, we labor like serfs to increase its power.
Varoufakis says that, on average, old-style conglomerates pay between 80% to 85% of their revenue to workers while Facebook pays 1%. He argues that the upshot is that there is less money in circulation, less demand and less investment.
He also notes that young people are constantly angst ridden about their social media because they know that when they apply for a job the interview panel will look at it. As a result, he says they are constantly trying to create the self that they think is going to sell in the labor market. If you are Gen Z, stop doing that right now and go buy a copy of “Hacking Capitalism” by Kris Nóva and Ashley Bishcoff.
At this point I have to take a detour because I just found out that Nóva, who I knew a little from interactions on Hachyderm and Twitch, has died in a climbing accident. The tech world is a poorer place, and I encourage you to read this obiturary by Steven J. Vaughan-Nichols. My thoughts are with Nóva’s loved ones. I want to just end the article here, but I feel like Nóva would want me to finish writing it.
Big tech has a certain appeal to would-be employees and is sitting on piles of cash it can throw at the hiring problem. But if you’re a normal-sized tech company, an old-style conglomerate or a small to medium-sized enterprise, you may have experienced difficulties hiring and retaining Generation Z (those born from the mid-1990s to the early 2010s).
Gen Z is the generation that grew up with the internet. They have technical abilities, excellent communication skills and are able to adapt quickly to new situations. Soon they will make up a third of the world’s population, and not long after that a third of the global workforce. For socio-economic reasons that you probably need to be an economist to understand, Gen Zers are in a position where they can be choosy about who they work for.
However, in 2020 a US National Academy of Sciences report warned employers about taking generational stereotypes into account when shaping recruitment, retention and other management policies. But what they meant was: don’t treat young workers as lazy and older workers as change-resistant.
The secret is that if you build the kind of workplaces that Gen Z wants to work in, it will attract workers of all ages who appreciate that kind of environment (perennials). Here’s a shortlist. The more boxes you check, the more attractive you’ll be as an employer.
A 2022 survey by KPMG in the UK found one in three respondents aged 18-24 had turned down a job because they disapproved of the employer’s ESG commitments. And a 2023 survey by Deloitte of 22,000 Gen Z and millennials across 44 countries reported:
As they rethink the role of work in their lives, work-life balance remains a top priority with flexible work arrangements, including part-time jobs growing in popularity. They cite cost of living as the top societal concern, with more than half of respondents saying they live paycheck to paycheck. Stress and anxiety levels remain high, driven by financial and environmental concerns, as well as workplace pressures. They want employers to help prepare them for the transition to a low-carbon economy.
The Gen Z specific numbers are revealing:
Employers have made progress since pre-pandemic times, but business is still not meeting expectations. Satisfaction levels were:
In summary, young people entering the workforce and early in their careers hold their employers to higher standards than ever before. And some industries may face additional challenges. In the UK, for example, technical communications is rarely a first career choice, and wages have been stagnant for over a decade.
One option for employers is to set up reverse mentoring schemes. A report by Hays found the benefits of junior staff teaching and influencing senior staff include improved employee satisfaction and engagement. And Gen Z has a lot to teach their older colleagues about social responsibility and environmental literacy.
There’s a lot to unpack here. This is a much longer post than I had originally intended. And in my head, I can hear The Disposable Heroes of Hiphoprisy and William S. Burroughs’ “Words Of Advice For Young People”. Time to stop writing.