Generations

PERSPECTIVE

To harness the energy of their workforce and succeed in a challenging decade, organizations must quickly integrate Generation Z. These new employees offer refreshing points of view and vibrant personalities that can elevate existing cultures. Moreover, because they share cultural priorities and preferences with other generations, integrating them well can improve employee experiences for everyone. The key to success is leadership. Every generation responds best to modern leaders who handle inter-generational conflicts by fostering collaboration and valuing individual differences. We say individual, because all generations of employees are remarkably similar.

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INTRODUCTION

It’s been more than a decade since a debate began about the interactions of multiple generations in the workforce. When Millennials entered offices in the mid-2000s, their expectations and approach to work created almost immediate friction between their generation and the two before it, Generation X and Baby Boomers. Today, we’re starting to see similar chafing with the arrival of Generation Z, the youngest cohort (as old as 23) who are just launching their careers.

These generations will only function successfully together when organizations fully understand them and integrate them into their cultures by building strong employee connections.  

The best approach to this applies the principles and practices of modern leadership in which leaders act as mentors and advocates for their new Gen-Z colleagues, as well as more tenured employees.

Our research indicates Gen Z is not fundamentally different from other generations. Perceptions that they are poor communicators who would rather hide behind screens than interact with others are unsupported. In truth, Gen-Z employees prefer face-to-face communication and want to feel that they belong. They are also willing to work hard when given purpose, opportunities to grow, and concern for their wellbeing. These traits combined with impressive digital literacy make Gen Z extremely valuable.

As we’ll demonstrate in this chapter, inaccurate stereotypes only hinder connection and collaboration, generational fault lines are more imagined than real, and each of the generations are more similar than they are different. While there are some nuances worth noting in how to lead each generation, ultimately, they all need the same things from their culture: a sense of purpose, connection, and appreciation—all of which are possible with the right strategies in place.

“Every generation, no matter how paltry its character, thinks itself much wiser than the one immediately preceding it, let alone those that are more remote.”
—ARTHUR SCHOPENHAUER, GERMAN PHILOSOPHER

GENERATIONAL FRICTION AND SUPERIORITY

Multigenerational workplaces have never been easy for leaders. The latest data show 75% of managers believe managing multigenerational teams is a challenge, and 77% of employees (across all generations) say “different work expectations” are a challenge.¹

Misconceptions can create conflict when employees of different generations work together. Millennials may see Baby Boomers as old and out-of-touch and get frustrated when they are slow to adapt to new technology or new ways of working. Gen X might believe Millennials are lazy and narcissistic and feel annoyed when they skip over normal processes and apparently cut corners to get work done. Baby Boomers are aghast when Gen-Z employees leave work at 3:00 to attend a yoga class.

When it comes to collaborating, our study found the generations have various comfort levels with each other. For example, when a Gen-Z employee is working with a Gen-X peer, there is a 67% increased likelihood the interaction will be frustrating for the Gen-Z employee. Similarly, Millennials have a 57% increased likelihood of frustration when interacting with a Gen-Z employee and a 46% increased likelihood of frustration when working with a Baby Boomer.

Gen-X employees have a 38% increased likelihood of frustration when they interact with someone from Gen Z and an almost identical increased likelihood (39%) when it’s a Millennial. And when Baby Boomers interact with Gen Z or Millennials, there’s a 26% and 78% increased likelihood (respectively) that it will be frustrating for the Baby Boomer.

Millennials are the most likely (53%) to project a sense of superiority and admit that they approach things differently than other generations, but they also feel their approach is better (52%). Likewise, they acknowledge they have difficulty relating to coworkers of other generations (37%), but believe stereotypes of other generations are accurate (47%). Boomers, on the other hand, do not feel their organization should tailor the employee experience to fit their needs.

On a positive note, despite common misperceptions, all generations have a preference for in-person collaboration, which reinforces the need to promote opportunities for connection in the workplace.

“When we decided not to sell our business, people called us a lot of things besides crazy—things like arrogant and entitled. The same words that I’ve heard used to describe our generation time and time again. The Millennial Generation. The ‘Me’ Generation. Well, it’s true. We do have a sense of entitlement, a sense of ownership, because, after all, this is the world we were born into, and we are responsible for it.”
—EVAN SPIEGEL, CEO, SNAPCHAT

GENERATIONAL PREFERENCES

We asked employees to assess their likelihood of joining and staying with an organization for at least five years based on several attributes. The results show similarities and differences between the generations, but there are many more of the former than the latter. Culture is far and away the most crucial element employees consider when joining and staying with an organization, regardless of the generation they belong to. And employees from all generations want leaders who regularly recognize them from their contributions.

The key takeaway is that even if generations have different nuanced preferences, they still all have the same ultimate desire: to work for an organization that cares about and appreciates them.

As the table below shows, culture is the top priority, particularly for Gen Z and Baby Boomers, and, perhaps not surprisingly, job security is least important to Gen Z. Income is more important than benefits to Gen Z and Gen X.

The benefits of most interest to Gen Z include paid time off, mental-health days, and activities that create a sense of community for them—things that help create a healthier lifestyle and strong sense of wellbeing. In general, Gen Z also cares less about the brand name or reputation of an organization, and more about its purpose and culture.²

We also examined the importance of the Talent Magnets (six attributes of workplace culture most important to a person’s decision to join, engage, and stay at an organization: purpose, opportunity, success, appreciation, wellbeing, and leadership) compared to their direct leader and the work itself. We found Talent Magnets to be slightly more important for the younger generations. For Baby Boomers, the Magnets, their direct leader, and their work have nearly equal importance.

On a more granular level, we found the Talent Magnets of opportunity, purpose, and wellbeing resonate most with Gen Z. This makes sense given that Gen-Z employees say they want to make a difference, grow, and be challenged at work; however, they are also less willing to devote their entire lives to work. For Millennials, the most important Talent Magnets are opportunity, purpose, and success. Gen X places the highest importance on wellbeing and opportunity. Boomers choose purpose and appreciation.

When we looked at different leadership attributes, we found employees of every generation want leaders who regularly recognize them for their contributions. Gen Z and Baby Boomers both seek leaders who regularly connect with and teach them. Millennials strongly prefer the same enlightening leaders, and Gen X leaders who connect their work to the overall purpose of the organization. All generations place a high value on connecting to purpose, accomplishment, and one another.

The final set of preferences we analyzed involve the actual work employees do. Work that helps employees feel like they’ve accomplished something is critical to every generation. Gen Z favors work that’s customer-focused, while Millennials and Gen X prefer work that’s more internal-facing. Baby Boomers identify most with work that strongly influences their direct environment.

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“Employers can appeal to Gen Z talent by keeping things interesting. It’s essential to offer roles with clear progression and training programmes so that talent will continue to grow and learn. We also find that offering unique rewards and benefits, such as flexible working hours, along with regular team-building exercises also pays dividends.”
—BEN GAMBLE, HEAD OF AGENCY, SHOUT ABOUT

Bottom line: The four generations in the workforce today are far more alike than their stereotypes would have you believe. Hence, organizations can engage and create great employee experiences for everyone simultaneously if they focus on improving common drivers like purpose, connection, and recognition.

THE IMPORTANCE OF MODERN LEADERSHIP

In last year’s report, we examined the importance of modern leadership—leaders who mentor and coach rather than just direct. Modern leaders champion, support, and empower their people instead of simply command and supervise.

One in three Gen-Z employees say they would work harder and stay with an organization longer if their leader was a “supportive” one.⁶

Baby Boomers with direct reports may be more inclined to hold onto traditional leadership practices, such as judging productivity based on time vs. outcomes or gatekeeping career development. (After all, that’s the model many of them know best.) But our research shows Baby Boomers thrive when their leader practices modern principles—more than any other generation in most cases.

Another thing to note: diversity and inclusion matter greatly to Gen Z, and not just as they relate to race and gender, but also identity and orientation.⁷ Over three-fourths (77%) of Gen-Z employees say an organization’s level of diversity affects their decision to work at the company,⁸ and 69% of those who work at a diverse company would stay longer than five years (compared to 27% whose company is not diverse).⁹

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“Gen Zers are enthusiastic, willing to take risks and explore new ideas. They value diversity in experience and encourage the inclusion of everyone from all walks of life, which is highly beneficial to teamwork, especially across different generations.”
—DANNY BROOKS, CEO AND CO-FOUNDER, VHR

A NEED FOR REGULAR RECOGNITION

Every generation in our research says “recognizes accomplishments regularly” is the most important attribute in leaders. For Gen Z, recognition is crucial to help them feel they are making a difference and to retain them longer. In a separate study of 600 Gen-Z employees, 79% said more recognition would increase their loyalty to their employer, yet 76% said they are “seldom to never” eligible for rewards and 50% didn’t feel their leaders recognize strong job performance.¹¹

In our Recognition chapter, we lay out the importance of different elements of recognition: where it occurs, how it’s presented, and what awards are most effective. In this chapter, we’ll recommend meaningful ways to recognize three types of accomplishments (years of service, achievement, and everyday effort) for the four different generations.

Years-of-Service Recognition

How: A presentation is most important to Gen X (31% relative importance) and least important to Boomers (27%). All generations (except Gen Z) rank “appreciating the impact on the team” as an important component of this recognition. Gen Z prefers to have stories told about their above-and-beyond achievement.

Where: All generations generally prefer celebrating career anniversaries in front of their teams. And while a scenario with no presentation is predictably the least desirable, Gen X employees also balk at video messages and department town halls.

What to include: Gen Z employees, in particular, prefer an experiential gift.

Achievement Recognition

How: Gen Z places slightly higher importance on the presentation than other generations. They like to hear how their work contributes to the organizational purpose and see how it impacts customers. The other generations’ preferences are consistent with the findings in our Recognition chapter.

Where: Gen Z, Millennials, and Gen X favor achievement recognition in front of their teams. Employees of all generations generally do not want video messages for achievement recognition. (It ranks at the bottom next to “not having a presentation.”)

What to include: Gen Z highly values an experiential gift. The other generations’ preferences are consistent with the findings in our Recognition chapter.

Everyday-Effort Recognition

How: The method here is much more important to Gen Z than their predecessors. Presentations that demonstrate how they contribute to the success of the organization are most valued.

Where: Gen Z, Millennials, and Gen X like recognition in front of their teams. Video messages are demotivating for Gen Z and Boomers. Both would rather forego recognition for everyday effort than receive it via video message.

What to include: Gen Z once again prefers an experiential gift to cash. They also appreciate a meal out. For Millennials, cash or gift cards and experiential gifts are equally desirable.

“Generation Z are good multitaskers and desire constant feedback. They also want clear goals, rewards, and personal challenges to keep them involved in the workplace and their personal lives.”
—DR. ROBYN JOHNS, SENIOR LECTURER IN HUMAN RESOURCE MANAGEMENT, UNIVERSITY OF TECHNOLOGY (SYDNEY)

RECOMMENDATIONS & IMPACT

To help employees thrive, organizations should consider taking or improving the following actions:

1. Practice modern leadership

All generations, but especially Gen Z, thrive under modern leaders who mentor and help them feel connected. This includes sharing information, creating a sense of belonging, periodically checking on their wellbeing, and valuing their career goals.

Interestingly, for Gen Z employees, these trait preferences differ based on the generation of their leader. The older the leader, the more important mentorship is. If the leader belongs to the Millennial or Gen-Z generations, the employee looks for more transparency and support.

The importance of modern leadership can’t be overstated. Employees of all generations highly value leaders who are clear and open about their processes and decisions. In order to fully engage and inspire employees, organizations must practice modern leadership, no matter the age of their leaders.

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2. Recognize accomplishments regularly

Preferences and best practices may vary by generation, but leaders should be sure to give meaningful, personalized recognition often. As examples, here are three common types of recognition applied to Gen-Z employees:

To recognize extra effort, call out the specific ways employees contribute to the success of the organization. Receiving the recognition in front of their team, along with a meal out or an experiential gift, is preferable.

To reward an achievement, emphasize how it contributes to the organization’s purpose or how it impacts customers. Typically, Gen Z likes the recognition to be public with an experiential gift as an award.

To celebrate years of service, share specific stories about how the employee has contributed over that time. For this type of recognition, experiential gifts and custom symbolic awards generally mean the most to Gen-Z employees.

3. Foster in-person collaboration

During our focus groups, Gen Z underscored the need for personal collaboration. In situations like selecting or staying with a company, they say it can make all the difference.

We often hear that Gen Z would rather text than talk, that they grew up behind smartphone screens, and that they don’t know how to communicate in person. We found the opposite to be true—Gen Z craves collaboration and feels interactions are most meaningful when face to face. In fact, three-fourths of Gen Z employees prefer in-person feedback from managers.¹³

According to our research, when Gen Z is part of a workplace culture that provides regular opportunities to collaborate face-to-face, the odds of an increased engagement score were almost 10x higher.

Collaboration is also strongly linked to modern leadership, and better in-person interactions will impact engagement, eNPS, and work culture for all employees.

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CONCLUSION

One of our biggest discoveries this year inspires a lot of hope for organizational cultures wrestling with the challenge of integrating four generations of employees. Contrary to stereotypes and anecdotes, research shows the generations are more alike than they are different. They all want to feel appreciated for their work and connected to their organization’s purpose, which confirms that culture is the most important job attribute for everyone, and that everyone thrives under modern leadership.

However, there are nuances organizations should address in the employee experience:

Baby Boomers want leaders who will mentor them and teach them new skills. They also enjoy doing work that has a high amount of influence in their environment. And they have strong feelings about receiving recognition via video. (The advice: steer clear.)

Gen-X employees are looking for purpose in their work. In terms of recognition, they prefer presentations with their teams over larger gatherings or video.

Millennials value opportunity. They want to develop new skills and test them with challenges. They respond best to leaders who champion their decisions and recognition that involves experiential awards.

Gen-Z employees care most about purpose, opportunity, and their wellbeing. They like to see how their work connects to the organization’s purpose and impacts customers. They want opportunities to do great work. And they want to be recognized regularly with experiential gifts, symbolic awards, or even a meal out.

Over the next decade, organizations should prioritize culture, modern leadership, and consistent recognition to improve engagement among Gen-Z employees. (These priorities will uplift the other generations, too.)

Organizations that have great cultures, modern leaders, and excellent recognition also see business success. Specifically, they are 4x more likely to have grown in revenue and 3x less likely to have laid off employees in the past year. Those are results employees of any generation can enjoy.

GENERATIONS—4 KEY TAKEAWAYS

Gen-Z employees are not fundamentally different from other generations.

Gen Z wants to work for organizations that care about them and regularly show appreciation for their contributions.

Contrary to popular belief, Gen Z prefers face-to-face interactions.

Modern leadership enables employees of every generation to thrive.

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