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The Next Generation Gap

The Next Generation Gap

How will millennial managers—as well as the rest of the workplace— react to the first wave of Gen Z entering the workforce this summer?

Last summer, for the first time ever, Optum Technologies, a division of the Eden Prairie-based health services giant Optum, brought in high school interns. It was a big change for a company that had previously focused its recruiting efforts on college graduates. “That’s way too late in the game for the current generation,” says Patrick Keran, Optum Technologies senior director of innovation research and development. “They’re coming in better prepared today.”

Move over, millennials—there’s a new generation hitting the workforce. The leading edge of Generation Z, born between 1995 and 2012, graduated from college this spring. Analysts say they are independent, pragmatic and fiercely competitive. They’re entering college with focus not seen in previous generations, and coming out with tons of opportunity, as the corporate world prepares for a wave of baby boomer retirements. That has many industries—from health care to accounting—becoming more aggressive about recruitment, and more willing to accommodate the demands of a generation that has grown up with a smartphone in their hands.

“The cost of education is so high now that the word is out: If you don’t know what you’re going to do, take time off,” says Beth Kieffer Leonard, managing partner for Minneapolis-based accounting firm Lurie LLP. There are currently more CPAs retiring than joining the profession, she says, and that has Lurie thinking hard about how to attract members of Gen Z and retain them. “They know they’re going to have jobs in accounting. The question is how do you [attract] them earlier?”

Big corporations, particularly in traditional fields such as accounting and insurance, are feeling the pressure to appeal to Gen Z. “We really need to tell them we’re not just a stodgy health insurance company,” Keran says. “We need to show them how we’re trying to be game-changers, and we need young people like them to do it.”

When Optum brought in high school interns last summer, managers balked. But when it came to technology and data analytics, Keran says, “there wasn’t a lot of difference between the high school students and our college interns.”

“These kids have multiple social media accounts. They know how to do so many things on their phones. They’re coming in well armed and tooled—more so than people already in the workplace,” Keran says. “We’re steeped in health care. We’ve been doing this stuff for years. We need to engage Generation Z and say, ‘You guys bring new tools, the excitement—help us combine these two.’ ”

Optum expects to hire 1,500 students out of college this year—800 interns and 700 full-time employees. Next year, it could be 2,000.

“The good news for these employers: Generation Z craves stability,” says Jim Kwapick, district president for professional staffing firm Robert Half in the Twin Cities. “They saw their parents scrambling for work, they understand the cost of college today. You might think Gen Z would be enamored with startups. Be careful what you assume.”

The anti-millennials

There’s been a tendency to label anyone under 30 as “millennial.” After all, there are a lot of them: 75.4 million Americans born between 1980 and 1994, according to the Pew Research Center, which makes millennials the largest living generation in the U.S. Gen Z isn’t far behind, at nearly 73 million, but they’ve come of age more quietly—favoring Snapchat’s vanishing photos over Instagram’s public posts—as their parents have drilled into them the dangers of oversharing on social media. Meanwhile, millennials—half of whom are now parents themselves, according to Time magazine—have been more talked about than any generation before. At the office, they wanted open spaces and constant collaboration. They sought meaning over money. And now those idealists are going to be managing a generation of realists.

“Millennials want to change the world at any cost. Gen Z wants that, but also wants to make sure they’re getting ahead in their careers—money and meaning,” says Twin Cities-based generations expert David Stillman. Ironically, the nuances hit Stillman when he stepped away from his work helping companies bridge generation gaps. After two best-selling books on the topic and 20 years on the speaking circuit, he set those boomer/Gen X/millennial conflicts aside and took a job as U.S. strategist for WE Day, a program that encourages youth to take social action.

“I was meeting with potential sponsors and program partners, and they’d talk about teenagers, referring to them as millennials. I realized there was a disconnect in how they were perceiving this generation. My gut, and observing my own kids at home, told me there’s going to be another shift.”

To confirm his instincts, Stillman teamed up with the Institute for Corporate Productivity to pilot one of the first national studies on Gen Z workplace attitudes. Among the findings: They’d rather work independently than collaborate. They’re interested in creating their own job descriptions and they’re not afraid to try different things—even simultaneously. They are picky about working for digitally sophisticated companies, and prioritize organizations with social values that align with their own.

Now Stillman is back on the speaking circuit, as companies from Land O’Lakes to 3M prepare for the next wave of workers. This time, he’s bringing a reinforcement: his Gen Z son Jonah Stillman, who just graduated from Minnetonka High School. In his junior year, Jonah participated in Minnetonka’s Vantage advanced professional studies program and many of his classmates helped conduct research that made it into the father-and-son duo’s new book, Gen Z @ Work: How the Next Generation Is Transforming the Workplace.

“We haven’t seen this level of [competitiveness] (among contemporaries) since the baby boomers,” David Stillman says.

Millennials were brought up by baby boomers, who taught them that if we all work together we can all be winners. Gen Z is largely a product of skeptical Gen Xers who know that 401(k) accounts don’t always grow, jobs often get cut, and there are always winners and losers, with no extra points for “participation.”

“Our parents taught us that in the real world, you might win and you might lose,” says 17-year-old Jonah. “We’re willing to fight for a job and to challenge the way things are being done.”

Attention deficit: college not required

Despite its success with high school interns, Optum is pressing pause this summer to retool its pilot program for Gen Z. There was too much lecturing, Optum’s Keran says, too much sitting. According to studies, Gen Z has an eight-second attention span. Constant connectivity has made them “fearful of missing out” (that’s FOMO, for you old-timers), which means they might try to juggle many pursuits at once. They’re skeptical of the value of schooling/training—why spend time on theory and lectures when you can just watch an instructional video on YouTube?

The New Culture Clashes at Work

 

Three workplace issues Gen Z sees differently.

1 - Yes to a “side hustle”
Working a second job is something full-time employees used to describe as “moonlighting” and tried to keep under wraps. Gen Z doesn’t see the conflict with doing other work on the side.

2 - No to non-competes
Gen Z expects flexibility from a full-time employer to do more than one thing. “If it doesn’t compete directly,” generational consultant David Stillman says their attitude is “Nothing to worry about.”

3 - No to phone bans
Management still views a smartphone as a distraction. But taking it away from Gen Z “is like cutting off an arm,” Stillman says. “Don’t assume they’re distracted in a meeting—they might be taking notes or doing research. They do everything on their phones.”

 

“We have to think about the way they consume things,” says U.S. Bank executive vice president Jeannie Fichtel, who is charged with enterprise education. “Small bites, lots of variety. More discussion. There’s going to be a war for talent—we have to make certain that we have an environment to learn and grow with them.”

Like Optum and many other others, U.S. Bank is starting to offer skills training to high school students—“making sure they know we are more than just bankers,” Fichtel says. “They could work in technology, finance, wealth management. We give exposure to multiple options.” In their research, the Stillmans found 75 percent of Gen Zers would be interested in having multiple roles in one place of employment.

U.S. Bank has recently introduced a training program that will help today’s students make practical decisions. That includes help paying off student loans for new employees hired straight out of internships.

But increasingly, the question is whether or not high school students even need a college education to succeed professionally. “If I was recruiting for Medtronic, I’d partner with local high schools to find the most brilliant kids. I wouldn’t have them go to college—I’d have my own university right there on campus, like Google and Pixar are doing,” says Brenda Cassellius, Minnesota’s commissioner of education. She pointed to pipeline programs where businesses are partnering with schools on skills-based training. “There are all of these opportunities kids don’t know about—thousands of jobs that require specific training.”

Blackboard, a Washington, D.C.-based company that provides high-tech tools for educators, is working quickly to make its programs more consumer-oriented, from mobile compatibility to implementing aspects of social responsibility, which rates as important to a whopping 90 percent of Gen Z. But Craig Chanoff, Blackboard’s vice president of education services, worries that colleges and universities in particular aren’t moving quickly enough. “I see institutions feeling paralyzed about the amount of change required,” Chanoff says. “These students don’t view the world in 50-minute, three-credit classes. If our mission is to prepare kids to be successful, the thing you have to prepare them for more than anything is adaptability. No one knows what the world is going to look like in the next 10 years.”

Cultural change: They want it now

Five years ago, recruitment specialist Jeff Boodie noticed an uptick in job candidates coming to his web-based employment platform through mobile. “That was revolutionary,” Boodie says. “I thought, who is this next group? They’re not millennials.”

That led to his new venture, JobSnap, a smartphone app that bills itself as the “hiring voice of Generation Z.” Designed for first-time job seekers with little or no work experience, JobSnap lets users upload a 30-second video to showcase their personality. That’s second nature to Gen Zers, who’ve grown up on camera. JobSnap has been described as the Tinder of job hiring because both candidates and employers have the option to swipe right or left. When both do the same, they get matched. JobSnap is currently being used by 250 Los Angeles-based companies—primarily in hospitality industries. Boodie plans to expand nationally this year.

But it’s not just hiring processes that need to change.

Companies that celebrate individuality are going to have an easier time working with Gen Z, Stillman says, pointing to NxtBook Media, a digital publishing company in Lancaster, Penn., where employees create their own job titles. One of the sales reps is the Duke of Solutions. A designer calls himself the Digital DaVinci. The human resources director is Master of Smooth Operations. If that sounds gimmicky, Chief Inspiration Officer Michael Biggerstaff has an explanation. “Most people come to a job and are told, ‘This is who you are.’ It doesn’t really mean a whole lot,” Biggerstaff says. “One of the things we do is give employees an opportunity to get into the job and figure out what it is. The worst part is the stress of coming up with something cool.”

Baby boomers at NxtBook have come around to the idea of naming their own job, though many tend to call it their “fun” title, while using a standard description outside the office. But millennials get into it, Biggerstaff says, and the current Gen Z interns love the idea.

On-the-job feedback must evolve as well, human resources executives say, to keep up with a generation that measures moments in “likes” and communicates in instant messages. Suddenly an annual performance review seems arcane.

Mission Health, the largest employer in western North Carolina, scrapped its annual employee reviews last year in favor of weekly digital check-ins in which employees are asked eight quick questions, including what they loved, what they loathed, and what they need from their team leader.

“We find our young people in particular want instant feedback,” says Taylor Foss, senior vice president of organizational transformation at Mission Health. “If they have a problem, they don’t want to wait a year to discuss it.”

The weekly check-ins get a big thumbs-up from employees. Foss says Mission’s employee engagement scores are up 83 percent. “What’s great about it is the instant information for both team members and leaders. We want to create a conversation culture.”

In Minneapolis, Lurie is doing something similar. A new software tool rolled out by the firm in October makes it easy for managers to offer instant feedback. “We’re hoping it will be used for both positive and constructive or redirectional notes,” says Tammy Dehne, director of human capital. The constant communication flow that young people want can feel burdensome to managers who’ve gotten along for years on annual reviews, so Dehne hopes the new platform provides a good compromise. “Our leadership has embraced it as something we need to do for the future.”

It’s the sort of change that Lurie hopes will be good for morale and productivity throughout the organization—not just for its newest entry-level employees.

“We’ve joked for years that you’ve got to be ready for millennials to email the president of the company and expect invitations to the most important meetings,” says U.S. Bank’s Fitchel. “The funny part is, we see the same thing with Generation Z.”

For every company actively preparing for Generation Z, there are many more that don’t see them as all that different than new hires from decades past.

“Once you’re in an organization, I care about your engagement, not your age,” says Carol Grannis, an organizational development expert. After years of consulting for Anytime Fitness, she’s going in-house this fall as their first chief human resources officer. As is the trend, however, she’s decided to call herself “chief self-esteem builder.” She says her biggest concern for new hires is interpersonal skills, and extra training may need to be aimed at Gen Z. But overall, Anytime Fitness will continue to focus on engagement and help employees lead a full life, which, in turn, makes them happier at work.

“The research on engagement shows that the reason why people love their job is very similar across generations,” Grannis says. “We all want to feel valued. We all want to have purpose in our lives. We’re learning from each other.”

Stillman insists that the generations are not apples and oranges. He emphasizes the differences in hopes of helping companies make adjustments before collisions occur. “I’m not saying you have to start all over. Many things are working, and it’s not all about catering to Generation Z,” Stillman says. “But we do take our generational personality with us, and by being open to gaps and identifying areas where you’re going to struggle, recruitment goes up, and so does retention.”

The Generations: from T to Z

Traditionalists.
Born before 1946, they lived through the Depression and World War II. Sometimes called the Silent Generation or Greatest Generation, they’re known for being patriotic, fiscally conservative and loyal.

Baby boomers.
Born 1946 to 1964, they grew up in a post-war era of growth and prosperity, which made them idealistic and optimistic. Growing up with television in its infancy exposed them to the world and made it seem as if anything were possible.

Gen X.
Born 1965 to 1979, these adults grew up in a time of disillusionment, with the Challenger disaster, rising divorce rates, the Iran hostage crisis, the first cases of AIDS, and corporate greed epidemics of the ’80s. They were accused of being slackers, but their skepticism came to be seen in a more positive light. They’re known for being independent, entrepreneurial and comfortable with change.

Millennials.
Born 1980 to 1994, their childhood was marked by terrorism at home: 9/11, the Oklahoma City bombing, the Columbine school shooting. But they also had helicopter parents to make them feel secure and hopeful. Globalization was exploding, which made them feel responsible for global issues and to hold companies to the same standards. They are tech savvy and collaborative.

Gen Z.
Born 1995 to 2012, they grew up with screens—in their cars, homes and hands—since they can remember. They are the first generation that doesn’t know life without Internet connectivity. They have come of age during the worst economic downturn since the Depression—they’ve seen their parents lose jobs and college costs skyrocket, which has made them pragmatic and focused on success.

 

Seven Key Traits of Generation Z

From Gen Z @ Work
by David Stillman and Jonah Stillman

{1} Phigital. Gen Z is the first generation born into a world where every physical phenomenon (people and places) has a digital equivalent. For Gen Z, the real world and the virtual world naturally overlap.

{2} Hyper-Custom. Gen Z has always worked hard at identifying and customizing their own brand for the world to know. From job titles to career paths, the pressure to customize is turned up.

{3} Realistic. Growing up post-9/11 as well as living through a severe recession, creates a pragmatic mindset. Colleges and universities were the first to struggle with Gen Z’s pragmatism, and the workplace is next. With idealistic millennials as their immediate managers, the potential for disputes with Gen Z is huge.

{4} FOMO. Gen Z suffers from a preoccupation with fear of missing out. That means they stay on top of trends and competition. But it makes them anxious about professional advancement. Seventy-five percent of Gen Z would be interested in a job with multiple roles.

{5} Weconomists. From Uber to Airbnb, Gen Z has only known a world with a sharing economy. They will push the workplace to leverage the collective in new and cost-effective ways. Gen Z will leverage the power of “we” in their role as philanthropists. Ninety-three percent of Gen Z says that a company’s impact on society affects their decision to work there.

{6} DIY. Gen Z is a do-it-yourself generation. Having grown up with YouTube tutorials, Gen Z believes they can do just about anything themselves. On top of that, they have been encouraged by their independent Gen X parents not to follow traditional paths. Seventy-one percent of Gen Z said they believe the phrase “if you want it done right, then do it yourself.”

{7} Driven. With parents who drilled into them that participation is a bogus award and that there are winners and losers, it’s no wonder that Gen Z is one driven generation. Pressure will be on for companies to convince Gen Z that they are the winning team. Seventy-two percent of Gen Z said they are competitive with people doing the same job.

Jonah Stillman (left) and David Stillman - Katy | Matt Blum Photography

AdVantage Minnetonka High

The school’s unique offerings put Gen Z teens in business settings.

Caribou Coffee was trying to figure out how to turn teens into loyal customers. Instead of spending thousands with a marketing firm for help, they turned to the peer group itself: students in Minnetonka High School’s Vantage advanced professional studies program. Vantage conducted market research for Caribou. It helped Aspire Beverages name its next drink. Analytics collected by its students saved Best Buy an estimated $1 million, according to Vantage directors.

“This is a generation that is questioning a college degree and feeling pressure to get experience at a younger age. What they’re doing at Vantage shows them a deeper connection between what they’re learning and how it applies,” says generational expert David Stillman, a member of the Vantage business advisory board. Stillman’s son Jonah participated in Vantage last year.

Vantage students didn’t just shadow executives at Fortune 500 companies including Cargill and General Mills; they actually work for them. “That’s one of our requirements,” says Vantage chairwoman Melissa Olson. “We want the projects to provide value to both client and student. Kids today really need to see why. Why am I learning this? How does it make the world a better place? We need to change the way we’re delivering education.”

High schools throughout Minnesota and nationwide are responding with professional apprenticeship programs, and many of them are looking to Vantage as their guide. At least 20 school districts from Minnesota and Wisconsin have visited Vantage in the past two years, Olson says. What sets the Minnetonka program apart from many is its academic rigor. Vantage students take microeconomics, environmental science and other AP and IB courses. A course in global food sustainability is being added next year, driven by industry demand. “It’s a growing need for many of the companies we work with,” Olson says.

Vantage started out four years ago with 35 students; it will have 200 in the fall. A strong GPA is not a requirement for admission. “It’s responsibility,” Olson says. “A lot of students that don’t do well in regular high school do well here—it’s a different type of learning.”

Allison Kaplan covers retail for MplsStPaul Magazine and is a regular TCB contributor.