In this episode of All Things Work, host Tony Lee speaks with David Stillman, author of Gen Z @ Work: How the Next Generation Is Transforming the Workplace about workers in this generation and how companies can engage them.
Members of the first generation of digital natives, Gen Z, come to the workplace with their own unique identity, perspective and needs. In this episode of All Things Work, host Tony Lee speaks with David Stillman, author of Gen Z @ Work: How the Next Generation Is Transforming the Workplace about workers in this generation and how companies can engage them.
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This episode of All Things Work is sponsored by ADP.
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Speaker 1:
Business success requires thinking beyond today. That's why ADP uses data-driven insights to design HR solutions to help your business have more success tomorrow. ADP, always designing for HR, talent, time, benefits, payroll and people.
Tony Lee:
Welcome to All Things Work, a podcast from the Society for Human Resource Management. I'm your host, Tony Lee, head of content here at SHRM. Thank you for joining us. All Things Work is an audio adventure where we talk with thought leaders and tastemakers to bring you an insider's perspective on all things work. Today we're discussing generation Z, the youngest cohort now in the workplace. Members of gen Z, defined as being between the ages of 10 and 25, report that they feel more emotionally distressed than any other generation. In fact, a quarter of gen Z respondents rate their mental health as poor or very poor, according to a survey by McKinsey. That's almost double the percentage of millennials and gen Xers who feel the same way. Of course, every generation has been shaped by traumatic events, though members of gen Z truly are unique in that they're the digital natives and the first to be bombarded constantly through their cell phones with news, opinions, conspiracy theories, falsehoods, you name it, that they're left to decipher. Facebook, the iPhone and Twitter all were introduced and gained traction during their childhood.
Joining us today to talk about this generation and how companies can engage these employees is David Stillman. David is a strategist in Minneapolis who wrote the book Gen Z @ Work: How the Next Generation is Transforming the Workplace, which he wrote along with his 23-year-old son, Jonah. David, welcome to All Things Work.
David Stillman:
Thank you, Tony. Honored to be here.
Tony Lee:
Well, we're very pleased to have you. So let's start by what is making this generation different from the generations that came before them? Are they truly unique?
David Stillman:
Definitely. I've had a whole career dedicated to studying generational differences, and the theory really is that each generation has its own events and conditions that take place during their formative years. And what's key about that, Tony, is your formative years is really when you're adopting your own lens at which you look at the world. So the mistake to make is, yes, we all go through the same events in life, but if some of these events are taking place during your formative years, it does shape the lens at which you look at the world. And so, of course, gen Z is unique, no different than millennials, gen X, baby boomers, because they've had their own unique events and conditions. What I am seeing right now is how many people are still just lumping the younger workforce together and more often than not still calling them millennials. And you'll see some buzz about gen Z in the consumer space, but still in the workplace it really blows me away how many people and executives will say to me, "Those kids today," and they're just referring to everyone under 30, and they don't realize the distinction that there is a whole new generation.
Tony Lee:
It sounds like a baby boomer making that comment. "All those young kids."
David Stillman:
Well, baby boomer, I think would like it. I've had a lot of people say, "I'm going to wait to get to know gen Z." What that is code for, Tony, is, "I'm going to wait until they become a little bit more like me." It's interesting because when I got into this... I'm a gen Xer, and when I got into this, it was the baby boom generation all the time. 80 million had really gotten all this attention. The workplace had to figure out policies and procedures to navigate 80 million. Then you had the marketplace catering and selling all these products and services to them, that when my generation showed up, it was like, oh, they'll behave and act just like us. Everyone tried to treat gen X like the baby boom, and whoa, did that backfire. And what's crazy to me is history is repeating itself with our kids, all this buzz all day long about boomers' children, the millennials, an awesome generation, but all this buzz and talk about them that people don't realize there's a whole new generation, gen X's kids, gen Z, showing up. And I do see history repeating itself. And if people wait too long to get to know gen Z, I think the opportunity to recruit and for sure retain them in today's competitive environment, it'll be too late.
Tony Lee:
Yeah. No, that's a great point. So you mentioned that each generation goes through a formative period. So I've read that gen Z is most motivated by money since they lived through the last great recession where their parents lost their homes in the mortgage crisis, and maybe they lost the child's college funds. So it had a very direct impact. Do you see that as the case?
David Stillman:
Absolutely. In fact, to put it a little into perspective, so historically, just to get this, baby boomers raised millennials, gen Xers raised gen Z. Now, it doesn't apply to absolutely everyone, but in general, you could say that. And during that last recession, the net worth of gen X... So that'd be gen Z's parents... did fall by 45%. So you can only imagine those dinner time conversations. Compared that to when baby boomers were raising millennials. It was the go-go nineties. Anything was possible. And you had boomers telling their millennial kids you could be anything you want to be. Anything's possible. The world's your oyster. And they set off into the world with that attitude. Well, gen Z was told it's a tough world out there. You're going to have to fight really hard. And elements that millennials maybe fought for fell down the list for gen Z. And like you're saying, we got back to some basics, money and pay, benefits, top of the list for gen Z. In other words, if you're not paying competitively, you don't have the benefits, let's not even talk about all the things I'm going to do. I'm not even going to enter the door.
Well, that wasn't the case for millennials. If we compare millennials to gen Z, the millennials came of time during a lot of excitement. And a lot of the message was find passion and meaning in everything you do. And millennials really set forth. If I'm going to come work for you eight to 10 plus hours a day, I want to be moving the needle on something. And you saw so many organizations focus on meaning, making a difference, teamwork. Well, along came gen Z. And of course finding meaning in your job's important, but it was not top of the list. And the gen Z attitude is I'll find meaning a host of ways, but top of my list will be money, pay, benefits, the basics, because if I can't get those when I walk through the door, it won't matter what meaning I can find. I need to start there.
Tony Lee:
Yeah. So, I mean, we're seeing incredibly high turnover rates period, but gen Z seem to be at the top of the list. Is it because they're not being paid enough? Or is there something else that gen Z is looking for on top of money that you can use to retain them and not have them hit the pavement?
David Stillman:
Oh, I'm not convinced that we're losing gen Z employees right now. I think we're losing a lot of millennial employees. I think we're having a hard time attracting gen Z employees to even come through the door to work for us. Our research shows if you can get gen Z in the door, loyalty is way higher amongst gen Zers than millennials, because if they're being paid well and they feel that stability, opportunity to grow, that's going to have huge payoff in terms of retention.
Tony Lee:
Okay. So it sounds like gen Z is really taking advantage of the intense talent shortage, that they're getting paid perhaps more than market rate because of talent shortages. So what happens if the economy turns south? Is gen Z going to have a big wake-up call?
David Stillman:
No, I think gen Z had their wake-up call when the economy went south during their formative years.
Tony Lee:
So they're ready.
David Stillman:
Oh, yes. I think, again, advancing conditions result in a generational personality. So if you're a generation that grew up during the recession, we also have had extreme political upheaval and unrest, that this is a generation that has always been in survival mode. What I think how that's signed to play out in the workforce is it's the era of the side hustle. So a lot of gen Zers, and it's a very high rate, and I think employers would be, not only surprised, but I'd go as far as saying alarmed at how many of their gen Z workforce have a side hustle, meaning they come work for you all day, but maybe they also have got a website that sells tennis shoes or they build bird houses, whatever that is. And so I think the survival mode made them really hungry for side hustles. I think COVID had a lot of gen Zers at home and tinkering with technology and launching side hustles, many times with their parents. And so a lot of them are debating do I lean into my side hustle? Is My side hustle creating enough? Or is there a place for me to go to work and have my side hustle? But this is not a generation where it'll be either or. They're going to come to you and have a side hustle.
Tony Lee:
It's funny. I had a great conversation recently with an HR director at a pretty good size company who said, "Yeah, we know that our gen Z employees have side hustles. And for the most part it's okay." But then she explained two wake-up calls that she had. Number one was she started hearing from the gen Z's colleagues, who said, "All this person does is tell me about their side hustle and try and get me to buy something that they're selling." And then the second was they found a gen Z employee who had two full-time jobs and was balancing the two because they were working remotely. Can it go overboard?
David Stillman:
Well, I think that's a little extreme. Two full-time jobs with employers getting benefits, no. So let's be clear. A side hustle... The rest of us, Tony, I don't know for sure what generation you're a part of, but as a gen Xer, I can tell you people did it, but we called it moonlighting. It was definitely something you did on the side to make a little extra cash. A couple of factors here. One is it is so much easier to start a business. I mean, Tony, if right now you and I had an idea, within 24 hours we could have a website. We could have an LLC application. We could have a phone number, business cards, boom, and looks like we are full in business. So it's a lot easier.
Going back to your friend's wake-up call, a couple of things. One is I think a wake up call is to revisit non-competes. I think what's happened with non-competes is you can't really uphold those in court. They don't really mean anything. They're so watered down that people sort of ignore them. And I think it's time to really revisit those, because I'm not convinced that gen Zers completely understand what's in and out of bounds on a non-compete. So for example, if I'm working at say General Mills and I make bird houses, no one should care. If I work at General Mills and I'm inventing a cereal, you should have a problem. And that's the type of thing when your colleague says, "I'm aware they have side hustles." I would be really looking into that because they do.
And look at the non-compete element. The other part where it shows up... And this is where, to be honest, employers have a really, really hard argument, is let's just say, Tony, someone works for you and you found out they have a side hustle selling tennis shoes. You walk by their desk in the middle of day, and you see this employee uploading tennis shoes to a website that they're selling. I can only imagine your immediate response is going to be, "Excuse me. You work for me 9:00 to 5:00. I am not paying you to sit here and upload tennis shoes to a website that you're making money on." Seems very fair, correct?
Tony Lee:
Well, but I know where you're going.
David Stillman:
Exactly. Okay, I'll let you finish it. So where do you think I'm going?
Tony Lee:
I think that if this person is doing their job and doing it well, they should have some flexibility to be able to do things on the side, as long as they don't overdo it, they don't take advantage of the company.
David Stillman:
Yes. Or I'd even go one step farther. Let's say you said to me, "You work for me 9:00 to 5:00. I don't want to see you uploading things on the internet." And I'd be like, "Okay, great. Then no emailing or contacting me after 5:00 PM ever-
Tony Lee:
And that too. Right.
David Stillman:
"Because I have something else I'm working on." People just get quiet immediately, because the workplace has no problem infiltrating our everyday out of the 9:00 to 5:00 boundaries. And therefore, gen Z sees it as, well, then I'm going to spend a little time doing my side hustle here. And to be honest with you, I don't think it's such a bad attitude. And those workplaces that sort of get out of this 9:00 to 5:00 mentality and embrace side hustle, I think this is really going to be one of the first areas to look at things differently and be able to embrace gen Z. If I were your colleague, yeah, I'd have a hard time if that person's spending all their time all day if it was disruptive talking about their side hustle, but if they're excited about it, I'd be leaning in. I'd be broadcasting it. And I'd be saying, "Hey, we're a workplace here that celebrates side hustles," what makes people unique.
And then what I'd be doing is saying, "Is there any part of a skillset in your side hustle that we should be capturing? Is there some skillset you could be bringing to our workplace? You're really good at uploading stuff to the website there. We could use some help on our website," is how I'd be looking at it, but I would not be fighting it. And those that do will find gen Zers will for sure go somewhere else.
Tony Lee:
Yeah. No, it's a great point. And let's talk a little bit more about that, about employee engagement especially. So one of the other things that research has shown about gen Z is that they tend to want to hear information in person, that they don't necessarily trust what they read on social media or, frankly, even in an email. So how can companies communicate best with gen Z to make sure they're getting the message? The old HR argument is you have to send someone something seven times before they finally hear it and understand it. What about gen Z?
David Stillman:
I mean, what was surprising to so many people... And we ran this survey, believe it or not, three times. And we said, what's your preferred way to communicate? I got to be honest. And I'm a gen X parent, and I study generations, and I got this wrong. I thought for sure texting, for sure texting, but no, face-to-face was a resounding in the 80 percentile. They all want face-to-face. So I think there's a level of a few things. I want to look you in the eye and see it. There's a level of cutting through the clutter. There's a lot of noise. All day long, they're looking at so many feeds of input. And there's a level of how do I know what's real, what's not, what's fake, what's AI? So there's just something about just getting rid of anything else, being able to look someone in the eye. It really is because they're used to so much other clutter.
Beyond that, I think what you're really seeing with gen Z is trust. I really want to see you. I want to hear it firsthand. And that's how I'm going to build trust with you. With millennials, there was group mentality, a lot more group. What does everybody think? And I think with gen Zer, we're seeing a lot more independent, one-on-one, less group mentality. And they're able to do that a lot more by just face-to-face. Last but not least what I'd say, all communication needs to be backed up with why? Now, why are we doing this? We do this, and the last thing you're going to say is because that's the way it's always been done. Gen Zers are hungry to understand why. So oftentimes we think we're communicating. They want to understand how did you arrive at that decision? Not just what the decision is. How did you arrive at it? Who contributed to it? How final is this decision? They want to hear everything that went into that. So a lot more behind the scenes, but if you think about it, it's a generation that's always had information at their fingertips on anything, how we got the decision. How did you arrive at it?
Tony Lee:
Gotcha. So let's talk about you mentioned earlier the importance of attracting gen Z into the environment. So benefits. Companies are really going out of the way to enhance benefits, come up with new benefits. What benefits would gen Z value? I mean, a student debt repayment seems like an obvious one. Are there others?
David Stillman:
That would be an obvious one. I think that would apply to millennials more than anything. I think millennials are the ones who are going to be sitting with way, way more college debt than gen Z. So that would be one thing. I think that we are going to see a lot of gen Zers who maybe opted out of a four-year degree. So companies that maybe are leaning into certification programs, extra types of education for gen Z will go a long way. Other benefits that we know for sure pay if I want to be paid competitively. People like an environment too that shows the more I do, the more I earn. What we had with a lot of millennials was this mentality of group think. You're only as strong as your weakest link. We operate in groups, teamwork. I mean, millennials are brilliant at teamwork. The problem that you had was somebody would be like, "Oh, did you hear? We're all getting a raise today?" No, Johnny's getting a raise, not all of us. It's sort of what happened to one happened to all, where you have with gen Zer a lot more independent thinking.
And so a lot of benefits aren't going to be like, oh, this goes for everybody? So a little bit more of an a la carte, where let me pick what I want, that's going to apply to my life, that works for me. That'd be a benefit rather than one size fits all. And the funny thing is everyone tries to play the fairness game. Well, if I do this for one, I got to do it for everybody. Gen Z doesn't even believe in that. They're all about earn it. Put it out there. Tell me what I need to do to earn that, and I'll go for it. And so I think it's going to be a lot of a la carte, let me earn things, but not group mentality. And what you're also going to see is a level of competition that we have not seen since the baby boom generation. Gen Zers are so fiercely competitive that I think a benefit's going to be a culture where there's opportunity to climb. The more you do, the more you perform, the more you can climb. Competitive cultures are going to be where they thrive. Not the case as much with millennials. And so bringing back that competitive drive, I think, is going to be a huge benefit for gen Z. Baby boomers are loving that, by the way.
Tony Lee:
Yeah, no question. Well, it sounds like just demonstrating that promotion from within is not just available, but likely. That if you work hard, you will get the promotion will probably make a difference to gen Zers, right?
David Stillman:
Well, for sure. And not tenure-based, like as long as you do this job for two years, then you're eligible. Tenure makes no sense. All performance-based for sure.
Tony Lee:
So one other area that we know gen Z is probably more comfortable with than really any other generation is probably inclusivity in the market and in the workplace, that everyone is treated equal, everyone gets an opportunity. Yet a lot of companies are struggling to show that they're inclusive, that they have a culture where everyone can succeed. Any tips there for specifically what gen Z might be looking for?
David Stillman:
Well, I think you're dancing around a topic of, to be honest, race and ethnicity.
Tony Lee:
Of course.
David Stillman:
And the thing is that you really do have a generation that's more colorblind. They're more about performance. They don't pay attention to things. If you talk to a baby boomer woman after a job interview back in the day, they'll tell you how many men were in that waiting room, how many women. They'll know exactly who was the applicants? You talk to a gen Zer, they don't even pay attention. They don't know. And so for gen Zers, I really think it's going to be about, again, not necessarily the way everything looks. It's really going to be more about the culture. And diversity's got a much more broader definition. Look, if you're from places like I am, Minnesota, they tend to be more White, but that doesn't mean we're not diverse in thinking styles, attitudes. And so I think they just have a more broad definition of diversity. And those that try to make it so obvious, White, Black, Asian, Hispanic, other, I think it's very dated model of diversity.
Tony Lee:
One last area that I want to cover with you is mental health. We know that a lot of gen Z, frankly, a lot of everybody, but gen Z specifically have been struggling with mental health issues and are looking to their employer for help. And a lot of employers are stepping up and providing it. How critical is that for this generation?
David Stillman:
To your point, Tony, let me say it is critical for every single generation. And I could go through everyone for different reasons. But since we're focused on gen Z, let me tell you where we find a lot of the mental anguish and angst is coming from that I definitely feel employers can help with. What happened when the pandemic hit is obviously we all went online. Everyone went to Zoom and whatnot, and all the buzz was about baby boomers, even my generation, being like, "Unmute yourself. I can't hear you. Get on. No, turn on your video." It was like trying to make it work. And no one worried about gen Z because in true form, they logged on, were ready to go instantly, didn't even skip a beat. But because of that, everyone just assumed that gen Z was okay. And then we proceed for two years in this pandemic and they're on the meetings. They show up, and they're fine. But what people don't realize that got stripped from them is probably the most critical thing for anyone's career, and that is the opportunity to build social capital.
Think about you, Tony. I'd be willing to bet that you got to where you are because at one stage in your career you stayed late at a meeting, and someone had a conversation, and you asked what it was, and they said, "Oh, Tony, you should join us for this." Or maybe you were hanging out by the proverbial water cooler, and people were like, "We're doing this new thing. You should join us. Stop by afterwards." Just that stuff by being around and being at the right place at the right time truly led to opportunity. Well, in the last two years, gen Z has been stripped of any and all opportunity to build social capital. We're now at a point if you're on Zoom meetings, half the people don't even turn on their video. And as soon as that meeting's over, it's leave meeting, leave meeting, leave meeting, and done. There's no extra chitchat happening where I could learn about maybe an extra opportunity, get a little more FaceTime or exposure. There's no water cooler where I'm hearing about some new strategy or thing being rolled out at the company. I'm not walking down the hallways where executives are getting to see and know me and become familiar with me.
And so they've had no opportunity to build social capital, and yet they're trying to get ahead in their careers. And if managers and leaders could encourage their employees in a digital environment, stay on that Zoom call a little bit longer, invite someone in for a face-to-face, do a chat, if you are having in person in the office, do more brown bag lunches where people just get to talk about what they're working on and they're doing, in a nutshell, anything employers can do to help gen Zers build social capital will most definitely help their mental state.
Tony Lee:
Well, that's great advice. That is going to do it for today's episode of All Things Work. A big thank you to David Stillman for sharing his insights into generation Z. Before we get out of here, I want to encourage everyone to follow All Things Work wherever you listen to podcasts. Also listener reviews have a real impact on a podcast visibility. So if you enjoyed today's episode, please take a moment to leave a review and help others find the show. Finally, you can find all of our episodes on our website at shrm.org/podcasts. Thanks for listening, and we'll catch you next time on All Things Work.
Speaker 1:
Business success requires thinking beyond today. That's why ADP uses data-driven insights to design HR solutions to help your business have more success tomorrow. ADP, always designing for HR, talent, time, benefits, payroll and people.