Dispatches from the Potomac#42 | Gen Z Bringing Changes to Company-Employee/Individual Relationships

This is a translation of an article originally written in September 2022 for publication in the October 2022 edition of the Marubeni Group Magazine, M-SPIRIT.

Washington D.C. Office General Manager, Marubeni America Corporation    Yoichi Mineo

Behind Gen Z’s Demands: Their Background

“I don’t understand younger generations” (“Kids these days...”) was once a very common complaint, particularly among members of the Gen X or older generations, myself included. But this gripe has rarely been heard since the turn of the 21st century. So, it was much to my surprise to hear this exact phrase from two American friends recently. The two claimed that the young employees they supervise take days off while being assigned time-sensitive tasks and refuse to take on assignments they do not find interesting. I shudder to think of what would happen to my own work if my team members said the same, but I may be naïve in my conceptions of what my young colleagues are thinking, and what these young colleagues do (or don’t) may well be a new norm in the office. But at least my friends and I are united in our lack of understanding—and it seems we are not alone. Actually, I regularly encounter articles in newspapers, periodicals, and social media covering Gen Z, which I believe is a good proxy for the “younger generation,” regarding their working behavior.

Gen Z is defined as the generation born between 1997 and 2012. The Gen Z population has now reached 72 million, or 20% of the entire U.S. population. The oldest members of the cohort are now 25 and have recently started working. Therein lies the reason for the media and experts’ attention on the group’s relationship with work. Their coverage suggests that Gen Z displays some unique characteristics. First and foremost, those in Gen Z are detached from employers, with one survey concluding that more than 40% of them intend to change their current jobs. Additionally, they demand (from their employers) (i) the top prioritization of their mental health, (ii) a diversified workplace in terms of gender, race/ethnicity, and sexual orientation, (iii) prioritization of mitigating climate change over profit, and (iv) work-life balance. These expectations are very different from the ones I had of companies when I started my career. But where did these differences come from? I would like to explore the answer by first looking back on the era in which Gen Z has lived.

They were born after the Cold War into a post-Soviet world and lack clear memories of September 11. Instead, the major crisis they encountered in their early adolescence was the Great Recession. Then, during the very first years of their careers, COVID-19 shut down the world. Now, Gen Z doesn’t see the United States as the world’s savior from communism or terrorism. Instead, they witnessed the government helping Wall Street while people on main street were evicted from their homes during their formative years. Gen Z is also the first generation to have grown up with 24/7 access to the internet: Broadband users outnumbered dial-up users in 2004, and the word “Google” officially became a verb in 2006. When members of Gen X (again, myself included) tried to learn something when they were in school and during their early stages of their career, they went to libraries, bookstores, and schools. They had to go there physically and talk with people face-to-face to find what they needed to learn. For Gen Z, the first choice is turning to the internet. No need to go anywhere or talk with anyone that way!

At the risk of oversimplification, I would like to highlight two points from Gen Z’s life experiences to address the reasons for the differences seen in their relationship with work today. First, Gen Z may not trust organizations in general, as their government (which itself is an organization) helped out companies (other organizations) while ignoring them. Second, Gen Z may believe they can live without, and be independent of, organizations, thanks to their full access to and utilization of the internet. For them, joining a company is their choice, not a necessity.

With that background, it’s no wonder their attitude toward companies is different from mine. I have long thought that I belong to a company, while they very much do not. For them, working for a company is but one option among many possible work formats, and when they do consider joining a company, they demand that the company prioritize their wellbeing, political agenda, career development, and work-life balance. Unless those demands are met, Gen Z will pick another option.

Keeping an Eye on the Public's Evolving Relationships with Companies

Many companies have been amenable to accommodating Gen Z’s demands under the tight labor market. Working from home or hybrid work setups have become a new norm. Some companies have even introduced a 4-day workweek. Onboarding and career-acceleration programs have also garnered much attention as a way to attract and retain young people. However, this relationship between Gen Z and companies may change going forward. Talent retention initiatives, such as mental health wellness programs and work-life–balance guarantees, don’t come without cost. To justify these costs, companies will analyze Gen Z behavior and develop more efficient programs. The current tight labor market will eventually become more balanced or even shift back toward the employers’ side, and it can hardly be believed that companies will continue all those programs once they are in a buyer’s market. In any case, Gen Z’s working behavior will have long-term effects on the company-employee relationship. Going forward, we should keep our eye on how both parties respond to these new dynamics.