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Ben Davern

Ben Davern

8th May 2024

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Regaining Trust: How to Win with Gen Z Graduates

Beanbags, free beer and bring-your-pet-to-work days: these are all it takes to attract recent Generation Z graduates, right? Because Gen Z doesn’t care about salary, just some vague words about “meaningful” work?

Wrong. In fact, nothing could be further from the truth.

Pandemic, mass layoffs, cost of living, economic and geopolitical uncertainty have taken their toll on graduates. Trust in employers (and the concept of stable employment) has been eroded. What may have worked with Millennials about ‘meaningful’ and ‘mission-driven’ work ahead of traditional benefits (salary, job security) is quite rightly being rejected by Gen Z.

Salary and Career Progression

Recent studies underscore a seismic shift in the priorities of Gen Z job seekers, with compensation emerging as their paramount concern. Over 62% of Gen Zers prioritise salary as the most important criterion for a job over job satisfaction, company culture, and social impact initiatives – a sharp increase from previous years. This focus on financial stability can be attributed to the unprecedented economic challenges faced by this generation, including skyrocketing costs of living and a precarious job market. Over 50% of Gen Zers said they were “extremely worried” about not having enough money, while 39% listed financial insecurity as their top stressor – the highest of any generation.

Moreover, a desire for rapid career advancement is palpable among Gen Z candidates. It’s been reported that 54% of Gen Zers expect a promotion within their first year on the job, although other studies suggest this number has fallen from a high of 75% in 2022 to 32% in 2024. Nevertheless, Bain research suggests learning and growth opportunities are valued closely behind compensation – all of which suggests there has been something akin to a return to the “traditional” benefits package.

Dissatisfaction and Mental Health

However, with job satisfaction and company culture taking a backseat to financial considerations and quick promotions, this may explain why Gen Z are reporting far higher job dissatisfaction compared to other generations. Gen Z’s job satisfaction is also primarily linked to output – i.e.  If they sense they have been under-rewarded, or their efforts haven’t translated to satisfying financial returns, they feel worse about their job. By contrast older employees’ job satisfaction is primarily linked to input — i.e. if they contribute meaningfully to a task, they’re more satisfied with their job.

Unrealistic expectations of the workplace – potentially accentuated by the deluge of social media influencers over LinkedIn, TikTok and YouTube, dispensing highly prescriptive and “inspiring” career advice – may also be a contributing factor to Gen Z graduates’ dissatisfaction. Not only do these impressionable young minds have a constant sense of the grass always being greener elsewhere, but the relentlessly positive and productivity-obsessed influencers and gurus often try to instil feelings of guilt or shame into those who spend their weekends hanging out with friends or watching Netflix – rather than taking ice-baths and running marathons!

The mental health crisis is very real with Gen Z. 64% of employers said they’d seen an increase in the number of student hires seeking help with mental health issues, while nearly a third said graduate hires had lower levels of resilience than they expected. This may be less about Gen Z graduates being less resilient than previous generations, and more to do with an unwillingness to sacrifice mental health for career progression. Nevertheless, fostering a supportive environment where employees feel comfortable seeking support, discussing their psychological struggles, and accessing resources available to assist them is vital.

Erosion of Trust

Yet perhaps the largest factor, and one almost entirely overlooked, may be a shift in the employer-employee relationship and an overall erosion of trust in leadership.

While Gen Z are prioritising things that may resemble a return to a “traditional” benefits package – job security, compensation, career progression – there is a key difference between now and decades gone by. In the past, an employee could expect a good salary, pension, perhaps health and insurance benefits – but most importantly a career they could grow at a company for 20 years. By contrast, 83% of Gen Z consider themselves to be “job-hoppers”, with over half already being employed by two or more places in their short careers.

This is less about Gen Z being job-hoppers by choice – it’s by necessity. While millennials were sold on false promises that sacrificing salaries and traditional benefits initially for more “meaningful” work – with expectations to be always “on” and digitally available – would lead to a steady climb up the career ladder and pay-scale, Gen Z are far less naïve. They can’t afford to be.

This shift didn’t happen overnight. While 2018/2019 research showed recent graduates did not consider compensation to be the leading factor when making career decisions, by late 2020 there had been a distinct shift in the priorities of candidates. On the heels of an economic collapse brought on by the global pandemic, Gen Z graduates witnessed high-profile layoffs and job freezes, internships and job offers being rescinded, and a state of total uncertainty. Since then, compensation continues to outweigh other factors like company culture and job satisfaction.

A brief economic recovery put the power back into the hands of candidates, further deepening a demand for high pay and quick promotions, with many 2021 and 2022 graduates enjoyed a thriving economy that came with multiple offers, sign-on bonuses and promises for ambitious career paths at the organisation. However, by late 2022 the rebounding economy was beginning to falter and by early 2023, news of economic turmoil and fresh layoffs meant candidates began to lose confidence in their job prospects. Mass layoffs, particularly in Tech, are still a regular occurrence. Uncertainty is the only constant.

This isn’t unique to Gen Z. The most recent Microsoft Work Trends Index report found that lack of confidence in leadership was the main reason workers (at all levels) switched roles over the last 12 months, while 54% of survey respondents feel their leadership is out of touch and 53% finding trust difficult to build.

How to Win with Gen Z

Organisations that care about bringing in a diverse set of Gen Z workers should understand that caring about compensation is the baseline requirement. It’s not about the money or salary itself; but the psychological safety of having a salary that can support them is essential, especially for a demographic that has witnessed turbulent economic times, geopolitical unrest and unprecedented uncertainty. While Gen Z is driven by a strong entrepreneurial spirit, with one survey claiming over 50% want to become entrepreneurs or start their own business, employers trying to attract Gen Z grads should focus on offering job stability and security with clear career progression.

The rise of remote and hybrid work models has introduced a new layer of complexity to working relationships. Virtual communication barriers, feelings of isolation and the lack of face-to-face interaction present unique challenges for professionals striving to cultivate meaningful connections in a digital landscape. Misalignment can be more likely to creep in under remote conditions, and it is often harder for dispersed employee at all levels to connect with an organisation’s mission, vision and values – especially for recent inexperienced graduates.

In a recent IMI focus group, senior managers and leaders from some of Ireland’s top technology and IT companies noted new Gen Z hires — working under remote and hybrid conditions — were not progressing at the rate of previous office-based cohorts. They felt this was due to a loss of “learning by osmosis”, whereby team members soak up critical work-related knowledge by working in proximity to their more experienced peers.

Nevertheless, the genie of remote and hybrid working cannot be put back into the bottle: it is the responsibility of management and leadership teams to overcome the challenges these models give rise to. Gen Z, raised in a digital age, embraces remote work as a non-negotiable aspect of their professional lives. However, they also crave in-person interactions and collaborative environments, highlighting the importance of hybrid roles that blend the best of both worlds.

L&D and AI

It’s crucial to invest in upskilling and continuous learning initiatives; not only for graduates to keep pace with evolving technologies and industry trends, but to develop and enhance their communication skills, emotional intelligence and adaptability. 87% of undergrads say learning and development (L&D) benefits are either important or essential when evaluating a job opportunity, while 23% said that they would consider resigning from a company if this opportunity was not offered.

With IMI’s graduate development programme, you can accelerate the development of your top young talent, creating your organisation’s next generation of leaders ready to deliver value today. The IMI graduate development programme gives your graduates and developing talent the commercial acumen, leadership and thinking skills needed in the workplace – problem solving, critical thinking, communications, and working in teams.

Simultaneously, Gen Z exhibits a keen interest in artificial intelligence (AI) and its transformative potential. Familiarity with AI tools such as ChatGPT is widespread, with a significant portion actively seeking opportunities to harness the power of AI in their careers. Organisations must navigate the integration of AI into their operations while ensuring that Gen Z employees are equipped with the skills to thrive in an AI-driven workforce. However, the integration of AI into recruitment processes raises questions about fairness, bias and transparency, necessitating careful navigation by employers.

Pay Them, But Don’t Forget the Other Stuff

Amidst these seismic shifts, employers face an array of challenges in attracting and retaining Gen Z graduates. Engaging employer branding, personalised communication and a focus on sustainability and D&I remain essential for attracting and retaining Gen Z candidates – but unlike with millennials, this comes alongside fair compensation and a good salary, rather than instead of. Organisations must continue prioritising flexibility, learning and development opportunities and robust mental health support to meet the needs of this generation who crave job stability alongside opportunities for growth. Graduates are still interested in meaningful work, but they want to be paid accordingly. Likewise graduates are less interested in whether their office has beer on tap and ping pong tables; they want an employer that invests in their professional development and offers L&D opportunities.

Invest in your graduates, and regain the trust that has been eroded in recent years. For organisations that prioritise transparency and fairness, this creates a great opportunity to win with Gen Z.

If you don’t invest in your talent they won’t invest in you. Learn more about the IMI graduate development programme here.

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