We recently conducted a research study called Navigating The New Changing Landscape, where we surveyed business leaders and senior HR professionals to better understand what their most pressing talent challenges are – and how they plan to overcome them.
When asked about the biggest talent challenges they are facing in the current market, 74% of business leaders told us it is important that their organization is able to successfully attract, develop and retain the next generation of talent (Gen Z) in order to support business growth.
It’s easy to see why this is a common concern. Our Talent Index Seventh Edition found that those aged 18 to 24 were by far the most likely to have plans to leave their current job in the next 12 months (65% vs. 51% overall).
Meanwhile, only 48% of business leaders we surveyed think their businesses currently understand what this next generation wants from work and their employers “to a great extent”. There’s a clear disconnect between what today’s employers provide and what younger talent expects.
So how can organizations effectively build a workforce for the future?
What does Gen Z really want?
According to Cigna International Health’s 2023 global survey of almost 12,000 workers, Gen Z is the most stressed age group in the workplace – with an overwhelming 98% reporting symptoms of burnout and 91% experience work-related stress. So what needs to change?
Employers that offer transparency, stability, flexibility, and an equitable and inclusive work environment are likely to stand out among young workers. According to our Talent Index survey, those aged 18 to 24 were the least likely to say a high salary was an important factor in choosing a new job – meanwhile, flexibility in the workplace is imperative.
We asked business leaders, “What does your organization need to do to better attract and retain the next generation of talent?” 58% said they had already adapted their workplace design to make it more collaborative, and 56% said they had built “a culture where every employee is treated equally”. But leaders agreed that there is still room for significant growth in these areas.
77% of leaders said the workplace demands of Gen Z have inspired genuine discussion about how work should work. In fact, 94% of organizational leaders (96% at the C-level) think that adapting talent approaches based on the needs and expectations of Gen Z will have a positive ripple effect across the entire organization.
In general, Gen Z is known for being the most outspoken generation in the workplace, but the truth is, they are often just saying what others are thinking. Almost everyone desires to feel valued, trusted and appreciated by their employer, and they want opportunities to develop in their careers. That’s not unique to Gen Z, but they certainly have earned a reputation for shouting the loudest about this – and voting with their feet.
Internal mobility programs, flexible working arrangements, an inclusive culture, transparency, and tailored learning and development opportunities are all steps that businesses can take to help attract, and retain, top notch Gen Z talent. The most important thing is to listen to what the workforce truly wants, and find efficient ways to personalize the talent experience.
What does building a workforce of the future look like in practice?
Match people to opportunities
In a 2022 Deloitte survey, 29% of young talent (Gen Z and millennials) claimed that learning and development opportunities were the top reason why they chose to work for their current company. In our Talent Index Seventh Edition, this age group was also the most likely to either already be participating in a learning and development program at work, or very eager to start.
With a good Talent Marketplace, you can more easily keep young talent engaged, motivated and productive at work. But offering opportunities for experiential learning, on-the-job training, and lateral moves is not the only way an AI-powered Talent Marketplace can be used to engage Gen Z talent. It can also provide personalized recommendations for mentorship programs and potential career paths – showing individuals the skills needed for each path and how they can be attained over time.
With Gen Z talent being so hungry for development opportunities, this is a crucial aspect of any good talent engagement strategy. When Gen Z talent believes they have room to grow with their current employer (and has the support from management to do so), they are far more likely to stay engaged.
Matching people with opportunities is important for internal candidates, but don’t forget about external candidates. When filling roles with external talent, a common skills language coupled with explainable AI helps you personalize the candidate experience – recommending open roles based on each individual's existing skills and potential.
While many companies have slowed hiring due to the economy, there’s still an opportunity to collect relevant skills information from potential candidates via your careers site, and add them to your talent community, where they can be nurtured with tailored communications and sent suitable roles when you are back to hiring actively.
Give employees the flexibility they desire
Gen Z is known as the first “digitally native” generation and they are no strangers to connecting with each other online, but Gen Z is also known for their desire to build relationships in the workplace. Genuine connection is important to young talent, but this doesn't mean they don’t also crave the freedom and flexibility that comes with hybrid work.
In fact, our latest research shows that Gen Z is the least likely group to be in the office five days a week. And our Talent Index data backs this up – 17% of respondents aged 18-24 said they were considering quitting their job this year due to a lack of flexibility.
The workforce of the future will likely continue to view “hybrid working” as more than just the ability to work from where they please. With powerful insights and greater workforce agility, employers will be able to offer employees genuine flexibility – around how, where and when work gets done – and trusting them with that ability.
Be open and transparent with your talent
In our Talent Index, 37% of respondents were worried about being laid off – 24% of that group were Gen Zs, and said the reason for their worry was a lack of transparency from leadership. The next-generation workforce expects open communication from the top of the organization – about the health and future of the business, benefits, and pay.
Transparency is one (low-cost) way to keep Gen Z employees engaged, but you must also consider the level of transparency you offer to external candidates and applicants. An overwhelming 90% of those aged 18 to 24 said they would be more likely to apply for a job if the salary (or at least the pay range) was shared in the job ad. This was the highest proportion of any age group by far and, among that 90%, 36% said it was essential to see a salary range before applying.
Gen Z has made it clear that total pay transparency is important, and we can appreciate that this can be a heavy lift internally. But by at least putting pay transparency on your roadmap, you are moving in the right direction.
Create a culture of diversity and inclusion
In 2023, it’s hard to dispute the importance of strong DE&I initiatives in the workplace. Businesses who have diverse teams are proven to perform better than their less diverse competitors. But what does the next-generation workforce have to say about DE&I?
Gen Z is the most ethnically diverse population in history. This young talent is also the most open-minded and accepting generation, and they expect nothing less than equity and inclusion from their employers.
Most organizations have set diversity goals – to drive better outcomes (business and societal) – actively working to reduce conscious and unconscious bias in their talent processes. A personalized approach to talent management, powered by skills data, helps employers encourage internal and external talent to apply to opportunities they might not have felt “qualified” for otherwise – ensuring that everyone has a fair shot at a new opportunity.
Engaging with talent based on their unique set of skills (as opposed to other factors) offers a far more equitable experience. To offer this level of personalization at scale, you need the right tools, backed by explainable AI.
If there’s anything that business leaders have learned in the last few years, it’s that the world of work is changing rapidly, and in order to succeed in the future, it’s imperative to develop the necessary workforce. The skills your organization needs to thrive today likely won’t be the same skills needed for tomorrow.
Digitally native Gen Z is soon to be the largest generation in the workforce, and the importance of attracting, engaging and developing young workers cannot be understated.