HIring in the Gen Z age

Look out workforce there's a new generation on the horizon. Employers are, hopefully, getting comfortable with the changing hiring landscape that Millennials have cultivated. But not too comfortable. For the first time since Millennials took over the top spot in the workforce, the next wave is coming of age. Gen Z, those born after 1996, are entering adulthood and will be submitting resumes.

The numbers

Millennials are persons born between 1981 and 1996. The Pew Research Center estimated that Millennials surpassed baby Boomers in 2016 and now are the "Old Salts" in the labor force. While Baby Boomer numbers are declining and Millennials are taking the mantel, Gen Z has been sneaking up. Bloomberg estimates that Gen Z will surpass Millennials in 2019 comprising 32% of the world's population. By 2020 they will be the majority in the workforce.

Millennials hit the workforce in such numbers and such differing personalities from Gen Xers and Baby Boomers that they changed the way business was done. Both in marketing and hiring. In order to court new hires from this generation employers had to change practices. The marketing world has gone to great lengths to shape campaigns to attract Millennial customers.  A generation literally changed the way business was done. Just as the business world had things were figured out it appears that changes will again have to be made. 

Who is Gen Z?

Millennials seemed to get a bad rap in the workforce but by sheer numbers were able to change how business is done. Every generation has its own idiosyncrasies. Technology advanced so quickly over the past thirty years children and grandchildren grew up much differently than their parents and even from each other. Gen Z is the first post 9/11 generation and the first generation in which smartphones are bodily attachments. According to Buzzfeed, here are a few things that Gen Z never heard of or are curious about: Payphones, Floppy discs, VHS and cassette tapes, The phrases-"Roll down the window" or "Hang up the phone", pound sign, pencil sharpener, film or film canisters, Gameboys or game system cartridges. At least some early Millennials may have come across these things or their remnants.

Generational differences

A Cultural trends report by Endeavor Global Marketing lists three major differences between Millennials and Gen Z. Gen Z is described as having non-binary beauty or gender fluid beauty concepts. They are a progressive foodie culture in which stories are part of the experience. The report says, "Expect to see a shift from photogenic, Instagrammable, food to the emergence of the stories of those behind the dishes". Gen Z will expect a more connected theater experience in which shows are releasing soundtracks early and streaming shows which generate more viral interest.

According to Inc.com, Gen Z prefers conversation to mass communication. Instead of being absorbed in social media they are more interested in quality, personal relationships. While Gen Z is less interested in their friend count, they are interested in getting their news via social media or the Internet. Compared to Millennials Gen Z is more interested in entrepreneurship.

Hiring Gen Z

What does all this mean to employers and hiring? Knowing what is coming next and how to adjust. Just as you know the qualities you are looking for in an employee you need to know what qualities the employee pool has to offer and is expecting. As you and your business age, the hiring pool is getting younger. Gen Z has aged in a different time from Millennials. Knowing about what will soon become the largest generational workforce is how employers will attract and retain employees.

Concordia University-St Paul released a study on what to expect from Gen Z in the workforce. Gen Z tends to be more like their grandparents when it comes to privacy and practicality. As mentioned, they have never known life without a digital connection at their fingertips. They are multitaskers, using on average of five screens. They believe that social media is a big part of their lives but crave more personal relationships and worry that social media erodes this. They are frugal shoppers and distrust big brands. 35% plan to start retirement savings in their 20's. 

The study continues with an assessment of Gen Z in the workplace. This generation is hard working. They are deeply driven by security and are motivated by salary and health benefits. They are willing to put in the extra hours if they are rewarded for it. They prefer to work independently and value skills and self-improvement. They feel that they are responsible for driving their own career. They view technology as a tool. They want to be coached and trained.

There you have it. Everything you need to know about hiring the perfect young candidate and providing them with a long and successful career. Well, not everything. But it's a good jump on knowing who will be sitting in your interview chair. The point is, there is so much more than just putting up the Help Wanted sign. Knowing your candidates will go a long way in making the proper hire and saving everyone a lot of headaches.  

More blogs on generations and the workplace at https://mazzellainvestigations.blogspot.com/search/label/millennials

Experience v. Youth

Speaking to a friend about retirement she told me that she had a few more years to go. She wanted to get her financial foundation a little sounder before making the decision. She went on to say that she recently received a retirement assessment package from her employer outlining her current and future pension options. The package was personally addressed and written as a response to her inquiry. The thing was, she hadn’t made an inquiry. As time went by she heard from other employees similar to her age and seniority who had also received their “requested” retirement materials. When it came to hiring and promotions of late there appeared to be a bias towards younger people. Was the company sending a message with the retirement package mailings?

It is not unheard of. Some corporations feel older employees are more expensive due to their salary and benefits. Younger, newer hires do cost companies less money. They can be hired for a substantially less salary and are willing to accept it. Many companies are eliminating pension programs, instead, offering new employees 401(k) matches and other savings programs. Saving the company money in the long term. Companies embracing a youth movement are looking for new ideas from employees who are more familiar with current technology. 

Targeted “retirements”

In March 2018, ProPublica, an independent non-profit newsroom, published a report claiming that IBM systematically laid off 20,000 employees age 40 and over between 2013 and 2017. Up into the 1980s, IBM was the technology giant. As the technology rapidly changed over the next twenty years and companies like Apple challenged IBM, they were faced with a massive and aging workforce. To compete, IBM felt that they needed to reduce their workforce and begin hiring younger, more tech-savvy employees.

ProPublica’s investigation revealed, in part, that IBM devised performance point-rating systems that favored younger employees with fewer years on the job. Older employees were rated as their skills being out of date. These employees were offered retirement packages or were relocated to an office across the country with the ultimatum to move or retire.

The Older Workers Benefit Protection Act (OWBPA) was passed by Congress in 1990. The OWBPA prevents employers from discriminating in benefits based on age, firing only older workers when cutting staff, or demanding that older workers waive rights and without taking safeguards into consideration. However, the burden of proof is on the employee to show that the company let them go based solely on age. Without records, overt acts, or documentation this can be difficult for an individual employee to prove. In the IBM case, the corporation went so far as to have employees who accepted packages to sign agreements that they would not take part in any future class actions.

But what about experience? 

Is it worth pushing out experienced workers to make room for youth? Does cost cutting make up for the loss of institutional knowledge? Older employees have a lot to offer. They’ve been with the company through thick and thin. They are able to mentor younger employees in systems and procedures. Historically, older employees are dedicated to doing the best possible job and are often the ones who find and correct errors. Errors that could cost the company lots of money if overlooked. While a new set of eyes is always welcome, past experience can sometimes save hours of work that will eventually end up at the same conclusion.

Savings?

Cutting bloated salaries and benefits might sound good but the overall cost of turnover may not justify it. Jack Altman, CEO of Lattice, posted an article in the Huffington Post in January 2017, How much does employee turnover really cost? Altman cites research by the Center for American Progress who determined that the average economic cost to a company of turning over a highly skilled job is 213% of the cost of one year’s compensation for that role. He uses the following example, ”If you are a 150 person company with 11% annual turnover, and you spend $25k on per person on hiring, $10k on each of turnover and development, and lose $50k of productivity opportunity cost on average when refilling a role, then your annual cost of turnover would be about $1.57 million.”

Altman summarized by saying that companies should analyze four major areas:

·       Cost of hiring

·       Cost of onboarding and training

·       Cost of learning and development

·       Cost of time with an unfilled role

He also provided this link to Calculate the Cost of Employee Turnover for yourself. 

The quick decision to cut costs through salary and benefits should be closely examined. There are not always textbook answers to everyday issues. You need veterans of your business to lead and show the way.