Since 2015 Generation Z is moving into the workforce. And they are bringing change. Not only will they challenge the way we work and bring new demands into the labor force, which already consists of four generations, but they also collide with the Millennials, who make up more than half of the working population since 2015.




US Labor force, Millennials




According to the Pew Research Center Millennials are defined as the generation born between 1981 and 1996. They are not only discussed because they make up the majority of today's workforce, but also because they have revolutionised the way we work. Millennials like no other generation before them are mobile, challenge the traditional top-down structure of companies and want collaborations in the workplace.




Generations defined, Millennials and Generation Z




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


“Considering this development companies need to step up their game in order to support a workforce that is not only made up of five generations and has, hence, the most diverse demands ever, but is also showing declining engagement.“ In order to balance their needs and improve acquisition, retention and engagement you will have to become a better employer than ever before.




#1 Creating value for your employees is becoming more important than ever

Generation Z is largely motivated by money.


The driving force behind Generation Z are financial rewards and career advancements – more than in any other generation before them. Thinking about it, this fact makes complete sense. While wages for young workers have been stagnating since 2000, prices for health care and college tuitions have constantly risen.



Financial woes Millennials and Gen Z



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


Their number one motivation for work and the one thing that drives their engagement is money. While 84% say they would like to work for a company they believe in and follow a purpose, financial safety has a higher relevance for them.


This also results in Generation Z being the part of your workforce that is most likely to be headhunted. In addition, Generation Z sees their first job as a stepping stone and is likely to change their job up to 10 times between the age of 18 and 34.


In order to engage the new workforce managers need to offer financial rewards and career advancement but should also pay attention to creating a culture and a team spirit that will motivate Gen Z to stay, something that binds them to your company. Pushing these advantages will help to avoid high turnover rates, ensures employee engagement (and that means higher revenue) and will then result in Generation Z deploying their full potential.


While Millennials in comparison aren’t motivated by money as much, they are still known to job-hop and employers now face the challenge of needed Millennials but not being able to hold them.


21% of Millennials have changed their job within the past year and another 44% of them plan on leaving their current employers in the next two years. A Randstad survey has estimated 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 the high turnover are low engagement, lack of career advancements and lack of recognition.


Nearly half of all Millennials or Gen Z feel connected to their job which results in over 40% saying they would change if another opportunity arose.


In total, HR and management will have to prepare for even higher turnover rates in the future and should redefine their processes to avoid these.“The top reason for people to stay at their job is that they enjoy the work they do. An overwhelming number of people, 67%, are of that opinion.“


It will, therefore, be central to create additional value through an appealing company culture, work-life balance and an modern workspace that integrates technologies and inspires creativity.




#2 Technology is on the rise

With the demographic change taking place within the workforce the need increases to incorporate social and digital technologies. While Millennials and Gen Z want these technologies, they also battle with the distraction they produce though.


With the entry of Gen Z workers the fact is inevitable: The future of businesses is a networked one and managers will have to meet the needs of the digital native generation.


This generation will be more spread out, works from different locations, travels more for work, are the most diverse and want to stay connected 24 hours a day. Up to 26% say they plan to work in two countries, 19% in three countries. Employers who recognize the distinct advantages of using social and emerging technologies will, hence, thrive.


Providing opportunities for internal communication goes far beyond facebook or the intranet for this generation though. The future of the workplace will be wearables, robotic and virtual realities.


The NHS for example is starting to train their doctors and nurses with the help of such virtual realities. Instead of learning their trade in real-life operations and emergencies the new technologies enable them to safely acquire and train their skills. These new methods can potentially save lives in healthcare and have, in the future, the potential to increasingly change our workplace in all over industries, too.



New Technologies in the workplace, Gen Z and Millennials



While these new devices offer advantages in terms of productivity, reach and time, the dark side to this development is the fact that especially social networking is extremely distracting to both Millennials and Gen Z. Constantly checking Facebook, Twitter and Instagram distracts employees from their daily tasks.


Research suggests that it takes us up to 25 minutes to return to the original assignment after an interruption. A study conducted by Career Builder suggest that the top three distractions at 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 of 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. However, maybe that’s just a myth. Other studies have actually found that Gen Z has what is called a highly evolved "eight-second filters." Gen Z grew up with unlimited access to information and have, hence, learned to filter extreme amounts of information in a very short time. The information they do deem worthy they are intensely committed to and focused on.


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 an effective company-wide distribution of (validated) information. Employees should not need more than 5-10 minutes every day to see and understand all relevant communication and information around their workplace and the organization.


According to a Future of Work study from 2016 developments show that employee apps are going to be the driving force in the next three years. 58% of technology companies are in fact considering to implement an app. App’s provide the possibility to bridge the gap between the non-desk and desk workforce while using a device that has become the young generations heartbeat: 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 up to managing positions as the 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 soft skills required and are not capable to oversee generations older than themselves.



Millennials unprepared for management positions




In addition, 45% of Baby Boomers and Generation Z feel that this lack could have a negative influence on the company. 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 organisations high marks for effective collaboration across departments and functions.“


Which is a tragic number concerning the fact that Gen Z and Millennials want conversation and frequent feedback more than any generation before them.


"Gen Z workers named ‘co-workers who like to collaborate' as 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 this conversation and feedback can be digital, the rumour that the younger generations don’t value face-to-face conversation anymore is not 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, hence, be to combine the need for technology with keeping up personal interaction.



Millennials at work





#5 Fighting high stress levels

Future Workplace has analyzed stress as the biggest obstacle that gets in the way of Millennials and Gen Z performing higher.


37% of Gen Z and 39% of Millennials feel like they are hindered in their development by stress and looming burn-out.


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


The report 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 American economy up to 300$ billion dollars every year in hidden costs. How? Stress causes headaches, muscle tension, dizziness and fatigue.


This leads, on the one hand, to employees being less concentrated and hence less productive and, on the other hand, to higher healthcare costs and more sick days. 52% of employees have called in sick before due to stress and up to 80% accidents on the job happen due to stress related sleepiness.


The highest ranking employee benefit in correlation is workplace flexibility. In fact, 75% of employees (and 74% of those unemployed) ranked it as their top benefit. Flexi times, more vacation days and longer breaks can do wonders and your company will benefit from these measures long-term.




In conclusion,

employers in the future will have to be more flexible and willing than ever. Among the most important measures to take in order to get the workplace ready for Millennials and Gen Z are:


  • Collaboration: Collaboration tools are key to fulfill the Gen Z and Millennials need to communicate and integrating them into your workflows will maximise performance.
  • Career advancement: Development opportunities for both generations that ensure their engagement and their connection to your company 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 social and emerging technologies that will satisfy the Gen Z desire for tools will ensure higher productivity and help manage distractions.
  • Management Training: Development initiatives and training will help you to avoid high turnover rates and support your employees in exploring their full potential. Especially Millennials will profit from management training increasing their soft skills and competence.
  • Work/ Life balance: Forming Work/Life programs will help younger generations manage stress and, hence, increase their productivity and minimize your costs.





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Written by Sina 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.