5 Ways to Be a Better Employer for Millennials and Generation Z

Since 2015, Generation Z has been moving into the workforce. And as they do, they're bringing change. Not only will they challenge the way we work and bring new demands to the labor force—which already consists of four generations—but they are also colliding with millennials, who now make up more than half of the working population.

US Labor force, Millennials

According to the Pew Research Center, millennials are defined as the generation born between 1981 and 1996. They're important not only because they make up the majority of today's workforce, but also because they have revolutionized the way we work. Like no generation before, millennials are mobile, they challenge the traditional top-down structure of companies, and they want more collaboration in the workplace.

Generations defined, Millennials and Generation Z

Generation Z are the ultimative technology natives. They are more than ever dependent on feedback, since they are used to receiving it from a young age, and having grown up in the era of start-ups and crowdsourcing, they are likely to aspire to being entrepreneurs.


Considering these developments, "companies need to step up their game in order to support a workforce that's not only made up of five generations—and therefore has the most diverse demands ever—but is also showing declining levels of engagement."   In order to meet employee needs and improve your abiloity to attract, retain, and engage, employers need to make greater efforts than ever before.


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#1 Creating Value for Your Employees Is Becoming More Important Than Ever

Generation Z is largely motivated by money.


The driving forces behind Generation Z in the workplace are financial rewards and career advancements—more so than any other generation before them. This isn't hard to understand: while wages for young workers have been stagnant since 2000, prices for health care and college tuitions have been consistently rising.


Financial woes Millennials and Gen Z

Consequently, like no generation before, Generation Z worries about their financial situation.


While 84% of Generation Z workers say that they'd like to follow a purpose and work for a company in which they believe, financial security has greater relevance.


This also means that Generation Z is most likely to be headhunted. In addition, these workers see their first job as being a stepping stone, and they're likely to change their job up to ten times between the ages of 18 and 34.


In order to engage Generation Z employees, managers need to offer financial rewards and promote career advancement. But they should also pay attention to creating a culture and a team spirit that can bind them to your company and motivate them to stay put. Creating such advantages will help lessen turnover, ensure employee engagement (and higher revenues), and ultimately result in Generation Z deploying their full potential.


In comparison, millennials aren’t as motivated by money, although they're still known to job-hop, meaning that employers now face the challenge of retaining their millennial employees.


21% of millennials have changed their job within the past year and another 44% plan on leaving their current employers in the next two years. A Randstad survey estimates that millennial turnover costs the US economy $30.5 billion annually.

Number of companies within the first 5 years of graduation, Millennials and Gen Z, turnover rates

The main causes for high millennial turnover are low engagement, lack of career advancement opportunities, and insufficient recognition.


Less than half of all millennials and members of Gen Z feel connected to their jobs, resulting in more than 40% saying they would make a change if another opportunity arose.


HR and management should redefine their processes to avoid even higher turnover rates in the future. "The main reason people stay in their jobs is that they enjoy the work they do. An overwhelming 67% of employees are of that opinion." 


It is therefore central to create workplace value with an appealing company culture, greater work-life balance, and modern workspaces that integrate technology and inspire creativity.


#2 Technology Is on the Rise

With the demographic change taking place within the workforce, the need to incorporate social and digital technologies increases. And while millennials and Gen Z want these technologies, they also battle with the distractions they produce. But with the entry of Gen Z into the workforce, one fact has become inevitable: managers will need to meet the needs of the digital native generation.


This generation will be increasingly spread out: they will work from different locations, travel more for their jobs, and want to stay connected 24/7. 26% say they plan to work in two countries, and 19% want to work in three countries. Employers who recognize the distinct advantages of emerging mobile social and networking technologies will therefore thrive.


For this generation, providing opportunities for internal communication goes far beyond Facebook or the intranet. The future of the workplace will be wearables, robotics, and virtual reality.


The NHS, for example, has begun to train their doctors and nurses with the help of virtual realities. Instead of learning their trade in real-life operations and emergencies, VR technology enables them to acquire and train their skills safely. These new methods can potentially save lives. And they have the potential to change workplace practices in a wide variety of industries.

New Technologies in the workplace, Gen Z and Millennials

While these new devices and platforms offer advantages in terms of productivity, reach, and time, the dark side is the fact that they can be extremely distracting. Constantly checking Facebook, Twitter, and Instagram distracts millennial and Gen Z employees from their daily tasks.


Research suggests that it takes us up to 25 minutes to return to regain focus after an interruption. A study conducted by CareerBuilder suggests that the top three distractions in the workplace are in fact texting, the internet, and gossip.


"Between the Internet, cellphones, and co-workers, there are so many stimulants in today's workplace, it's easy to see how employees get sidetracked," Rosemary Haefner, chief human resources officer at CareerBuilder, said in a statement.


In addition, studies suggest that Gen Z attention spans have shrunk to eight seconds and that they’re unable to focus for extended amounts of time. Other studies have actually argued that Gen Z has what are called highly evolved "eight-second filters." Gen Z grew up with unlimited access to information and has therefore learned to filter extreme amounts of information in a very short span of time. They are intensely committed to and focused on the information they do deem worthy of their attention.


The challenge for businesses in the next years will be to balance the efficiency and distraction of modern technologies.


Employee communication should not just rely on social media-like internal tools but more on validated and curated channels that can be interactive and fast while ensuring the effective company-wide distribution of (validated) information. Employees shouldn't need more than 5–10 minutes per day to see and understand all of the relevant communication and information in their workplace and organization.


According to a Future of Work study from 2016, developments show that employee apps are going to be the driving force in workplace communication tools in the next three years. 58% of technology companies are in fact considering implementing an app. App’s provide the possibility for bridging the gap between non-desk and desk-bound workforces with a device that is unquestionably the young generation's lifeblood: the smartphone.

Employee apps on the rise fr workplace technologies

#3 Millennial Managers Are Not Equipped for Their New Role

One quarter of all millennial workers will move into managing positions as Baby Boomers retire and Generation Z moves in. Still, millennials feel unprepared and unequipped for this change.


“Although Millennials have the highest number of college graduates according to the recent Ranstad and Future Workplace study, they feel unprepared to solve conflicts, negotiate, and manage other people.“


They feel like they don’t have the necessary soft skills and are not capable of overseeing generations older than themselves.

Millennials unprepared for management positions

In addition, 45% of Baby Boomers and Gen Z feel that this deficiency could have a negative influence on companies. Employers, in conclusion, will need to consider developing the following skills for their millennials: Persuading and influencing, communicating articulately, managing conflict, and navigating policies.


#4 Millennials and Gen Z Want Frequent and Ongoing Conversations

“Only 55% of employees worldwide currently give their organizations high marks for effective collaboration across departments and functions.“  This percentage is tragically low given the fact that Gen Z and millennials want conversation and frequent feedback more than any generation before them.


"Gen Z named 'co-workers who like to collaborate' as being the type of worker who would help them do their best work, second only to co-workers who work as hard as they do," said Jim Link, chief human resources officer at Randstad North America. "Companies seeking to be an employer of choice must leverage the collaborative revolution taking place and provide the technology, tools, and processes that facilitate and encourage it."


While such conversation and feedback can be digital, the rumor that the younger generations no longer value face-to-face conversation simply isn't true. About 4 out of 10 employees prefer personal conversation and teamwork in meetings over emails and text messages.


The challenge in the next years will therefore be to meet needs for technology while keeping up with this desire for personal interaction. 

Millennials at work

#5 Fighting High Stress Levels

Future Workplace has analyzed stress as the biggest obstacle keeping millennials and Gen Z from performing higher.


37% of Gen Z and 39% of millennials feel hindered in their development due to stress and looming burn-out.


According to this study of Stress in America, 18–33-year-olds and 34–47-year-olds report an average stress level of 5.4 on a scale od 10, compared with a national average of 4.9. The report also indicated that Americans define 3.6 as being a healthy level of stress.


The report also stated: “Millennials and Gen Xers are most likely to say that they are stressed by work, money, and job stability.” 

The cost of stress to your company, Millennials

Stress has been called “the health epidemic of the 21st century” and costs the American economy up to $300 billion in hidden costs every year. How? Stress causes headaches, muscle tension, dizziness, and fatigue.


This leads to employees being less concentrated and hence less productive, in addition to higher healthcare costs and more sick days taken. 52% of employees have called in sick due to stress, and up to 80% of accidents on the job happen due to stress-related fatigue.


In correlation, the highest ranking employee benefit is workplace flexibility, with 75% of employees calling it their top benefit. Flex time, more vacation days, and longer breaks can do wonders for employee satisfaction and your company willsee long-term benefits from these measures.


In Conclusion

Future employers will have to be more flexible than ever before. The following measures are among the most important to take in order to prepare the workplace for the demands of millennials and Gen Z:


  • Collaboration: Collaboration tools are key to fulfilling the communication needs of Gen Z and millennials. Integrating them into your workflows will maximize performance.
  • Career advancement: Development opportunities for both generations that ensure their engagement and connection to their companies will help to avoid high turnover and elevate employee happiness.
  • Financial stability: Providing recognition and rewards that deliver financial security will help your company long term, even if it hurts now.
  • Technology: Integrating emerging technologies that will satisfy the Gen Z desire for social tools will ensure higher productivity and help to manage distractions.
  • Management training: Development initiatives and training will help you to avoid high turnover rates and support your employees in attaining their full potential. Millennials especially will profit from management training that increases their soft skills and competence.
  • Work/Life balance: Creating Work/Life programs will help younger generations manage stress, lead to increased productivity and minimized costs.

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Written by Sina Kaye Lockley

Sina is a communication specialist at Staffbase. She wants to help companies engage their employees and find ways to make work more fun. She writes about internal communication, mobile employee engagement and how to use an app in today's evolving workforce. She religiously reads one book a week and sleeps with pen and paper next to her head.