With 27% of the workforce predicted to be made up of Gen Z by 2025, it’s obvious that it has become a necessity for businesses to understand our newest generation of available workers. Although you may have been able to attract Gen Z employees, it is proving to be difficult to retain them in the long run. Turnover rates are sky-high (close to 48%!), and if you aren’t careful, it can cost your business thousands of dollars.
This problem is exacerbated by Gen Z’s attitude toward unfulfilling work, making them more likely to jump jobs compared to previous generations. 65% of Gen Z employees have left, or are planning to leave their jobs in the first year or less, which spells out a bad financial situation for your company unless you know how to adapt.
In order to better retain Gen Z employees, you have to understand their demographic. Gen Zers want it all, from high pay to maximum flexibility and benefits. And because they’re also a smaller generation, that means they have the leverage to negotiate for what they want in a workplace and in their positions.
Due to the massive amount of open positions, it’s likely that Gen Zers will have the ability to job-hop without much consequence. The COVID-19 crisis has already established a labor shortage with The Great Resignation, but coupled with the looming skills gap problem, businesses need to try especially hard to retain young talent or risk having inadequate staff to grow into the future.
However, Gen Z isn’t going to stay at your company just because you give them free coffee or another floating holiday. There is a lot more to understand about Gen Z in order to increase your retention rates. But how can you do that, especially if there is a generational gap? Let’s discuss some ways to make sure you can retain the next generation of talent at your company.
What Gen Z is Looking For From Businesses
Compared to previous generations, Gen Z expects much more from work. Gen Z has been called “the first fully global generation” and it makes sense considering what they’ve already been through in their short time on the planet. Between the rapid emergence of technology and global crises such as the 2008 recession, Gen Z has witnessed first-hand how events such as economic downturns and uncertainty can directly affect employment and wages. They want to be paid more, and they have no qualms about leaving a job if they aren’t.
We’ve already established that Gen Z has the leverage to ask for higher pay, so one of the most obvious ways to retain Gen Z is to pay higher salaries. Obviously, it’s not a simple decision for any company, but competition will continue to heat up for the top Gen Z candidates and most businesses will have to increase their salary ranges to keep up.
Ideally, the extra cost will be worth it when you can hire great candidates for the long-term. By factoring in the cost savings that come with reducing employee turnover, your business can pay higher wages without affecting your bottom line. You can also consider offering performance-based bonuses that are tied to revenue metrics, so that when your employee earns your business more, they earn more as well.
A Perfect Match
A great employee that fits your company’s needs and culture is absolutely worth a higher salary. This is especially true when the overall cost of replacing an employee can range anywhere from 90-200% of an employee's wage, counting everything from recruiting, training, and onboarding costs, as well as the lost productivity while you’re replacing the lost employee. In this way, finding the perfect candidate can ultimately save your business money, and it’s also what Gen Z workers want as well: to work at a company that fits.
One of the best ways to get that right fit is not by hoping you get lucky with the right candidate, but by creating that right candidate for your business during an internship. By establishing internships for younger talent while they are still in college, you will be able to help form their skillset, their values, and their aptitude for roles at your company. You can also keep the pay lower by using Pre-Placement Offers to hire great candidates at the end of their internship, before any of your competition.
Work Flexibility & Career Growth
Luckily, pay isn’t the only thing Gen Z wants. 40% of Gen Z employees are willing to take a pay cut if a job offers better flexibility and career growth. As important as a good salary is, it seems that Gen Z would rather have the flexibility to maintain a work-life balance, and see opportunities to be promoted, than simply max out their paychecks.
Remote and hybrid work are the keys to making this a reality. Allowing remote work is already a benefit of its own, since it can save more than $11,000 per employee, but with the added bonus of helping to retain Gen Z, it can keep you ahead of competitors. A lack of a work-life balance has become the number one reason Gen Z would quit, so addressing those concerns is important to preventing turnover at your business.
Gen Z also wants opportunities to upskill and climb higher. Consider hosting workshops where experienced managers can teach Gen Z employees about specific leadership skills and how they’ve achieved their own promotions. Bring in experienced people from the industry to host talks, or teach new skills. Not only are these meetings mutually beneficial for employee productivity and eliminating the skills gap, it also helps Gen Z feel more included at your company. 94% of employees (including Gen Z) say they’ll stay at a company if it is invested in helping them learn, so showing a personal investment is another way you can get employees to stay. If a new intern is concerned about a project or onboarding, personally helping them and answering their questions makes them feel like their concerns are being listened to.
By hosting these meetings, an employer would not only be eliminating imposter syndrome in employees, but also helping them build a skillset foundation to achieve their own dreams. Gen Zers are just emerging in the workforce and they have the drive to climb the corporate ladder. If you can’t help them learn the skills to do so, then they’ll leave and find a company that can.
Company Culture & Values
Rather than finding workplace friendships, Gen Zers focus more on whether the company culture would be a good fit. 77% of Gen Z consider it important that their company supports diversity, equity and inclusion efforts, so in order to retain Gen Z talent, make sure that you act on it. Tout your company values openly and make sure you engage in activities that put your money where your mouth is.
Consider hosting Employee Resource Groups (ERGs), where employees-led teams from different backgrounds help foster an inclusive environment within their workplace. Or maybe your company can include a few mental health days a year to help employees relax and feel less burnt out. More and more companies are becoming sensitive to the plight of mental health issues, and are including more resources for employees to mitigate them.
And keep in mind, although many Gen Zers are approaching working age, employers need to remember that they’re still young. For many of your Gen Z employees, this may only be their first or second job, so ease them in and allow them to find enjoyment and fun in the day-to-day. Doing team events, such as a lunch meetup with staff or company outings, will allow them to more easily transition into a work environment and help them feel like they are part of a team. The main goal is that Gen Z employees want to feel like they are part of a brand, which naturally helps to cultivate better employee-supervisor relationships and thus lowers the risk of quitting.
Novelty in Work
Gen Z employees also want novelty. If marketing to Gen Z should have taught anything to employers, it’s the fact that trends change fast. Gen Z employees want new opportunities and excitement in their work lives. Unlike other generations, they don’t want to sit at a desk and do the same routine over and over again; rather, they want some to try different tasks and learn new skills, which is ultimately a benefit for your company.
Consider involving Gen Z employees in your company's newest initiatives just as they are getting off the ground. Not only does this provide a low-risk area for Gen Z to learn and test new skills, it also provides unique troubleshooting opportunities where employers can test innovative ideas to see what fits. Although you may need certain employees on certain assignments, letting them dedicate at least 20% of their time to other tasks allows innovation and excitement at the workplace.
Ultimately what Gen Z wants is for their work life to be fun as well as balanced. They want to learn new skills but also want the flexibility to work at their own pace. With certain changes to your company procedures, this seemingly contradicting balance will become much easier to achieve.
It’s not easy building a Gen Z-friendly brand that draws in job applicants. PathMatch can help. Click here for a free demo of our talent-matching app today.