Gen Z’s Rising Influence: Is It Time for Corporations to Adapt?

Gen Z is now a dominant force in the workforce. However, their working style is quite different from that of Millennials.

Many corporations face challenges in adapting to Gen Z’s preferences, such as a strong demand for work-life balance, flexibility, and mental health support. Gen Z also prioritizes diversity, inclusion, and alignment with personal values in the workplace.

It’s unclear whether these issues are due to Gen Z’s characteristics or the current economic conditions. That’s why it’s important to understand the world that has shaped Gen Z, as it greatly influences their behavior and expectations.

Gen Z: A Generation Shaped by Technology and Social Change

Generation Z, also known as Gen Z, includes individuals born during the late 1990s and early 2000s. This generation makes up a large part of the U.S. population, with about one in five Americans being a part of it.

Globally, Gen Z consists of over 2 billion people, making up approximately 30% of the total population. By 2025, it is expected that Gen Z will account for around 27% of the global workforce.

Gen Z is the first true digital native generation. Unlike millennials, who lived through the rise of the Internet while still growing up with cable television and landline phones, Gen Zers have lived their lives fully connected digitally.

Most of Gen Z doesn’t remember life before smartphones and has grown up with constant access to streaming and social media. Their online interactions differ from those of previous generations.

Gen Z is tech-savvy, expecting seamless digital experiences. They are also the most diverse generation, valuing inclusion and being open to different cultures, identities, and perspectives.

Gen Z is socially conscious, focused on issues like climate change, social justice, and sustainability. Shaped by economic uncertainty and events like the COVID-19 pandemic, they prioritize stability and security in their careers and personal lives.

The Most Pressing Issues Facing Gen Z Right Now 

The pressures on Gen Z are unlike those faced by previous generations. As they start their careers and move into adulthood, it’s important to understand the challenges they face today.

Housing Hurdles: Gen Z’s Struggle for Homeownership

One of the most pressing challenges facing Generation Z is the inaccessibility of homeownership.

Data from the Decennial Census, American Community Survey, and the US Department of Housing and Urban Development show that the ratio of average home prices to average incomes rose from 6.1 in 2000 to 8.5 in 2021, making homeownership increasingly difficult for those with moderate incomes.

According to Census Bureau data, homeownership in the U.S. varies greatly by race and ethnicity. In the fourth quarter of 2023, the homeownership rate for non-Hispanic white Americans was 73.8%, followed by Asian Americans at 63%, Hispanic Americans at 49.8%, and Black Americans at 45.9%.

The gap between white and Black homeownership in 2023 was 27.8 percentage points, which is larger than it was in 1960, when discrimination in home selling and financing was still legal.

The 2023 Current Population Survey shows the long-term effects of discrimination, with white adult Gen Zers almost twice as likely to own a home as Black adult Gen Zers—30% compared to 16%.

A large number of Gen Z, 34%, think owning a home is something they may never achieve. This worry comes from several reasons, including the fact that the average age of first-time homebuyers is now a record 36 years old.

Many Gen Zers are staying at home longer to save on rent, contributing to a notable increase in young adults living with their parents in both the U.S. and Australia. The disparity between home prices and wages is stark: it now takes Gen Z 6-7 years of income to afford a home, compared to just 2-3 years for Baby Boomers.

Youth Unemployment and Job Market Challenges for Gen Z

Youth unemployment is also a big problem for Generation Z, particularly in countries like Spain, Greece, and Italy, where the rates are over 25%. Sri Lanka also faces a high youth unemployment rate of 27%.

Even in Sweden, known for its strong social support systems, youth unemployment is 23%. In China, economic uncertainty and many young people pursuing higher education contribute to over a third of degree holders possibly being unemployed.

In wealthier countries, youth unemployment averages about 13%, the lowest since 1991. However, this figure doesn’t fully reflect the reality, as many young people have stopped looking for work or are working part-time jobs, which distorts the numbers.

In 1994, the U.S. government changed how unemployment was measured, excluding those who stopped job hunting or only have part-time work. Many other countries followed this change, so current unemployment rates may not show the true job market situation.

Experts have different views on how Gen Z is doing in today’s job market. Economist Lawrence Kotlikoff says, “This is a tougher climate for sure parents need to realize that their kids are in trouble”.

While technology can offer new opportunities, it also brings challenges, like the impact of AI on jobs in the next decade. Still, Gen Z has found ways to adapt. They have learned that changing jobs more often can lead to higher earnings, with some reports showing Gen Z workers earn almost 30% more by switching jobs.

In the U.S., hourly pay for workers aged 16 to 24 has increased by 7% year-on-year, compared to just 1.3% for those aged 25 to 54. In the U.K., pay for workers aged 18 to 21 rose by 15%, outpacing other age groups.

Even with pay increases, many Gen Zers still face financial insecurity. Since they often begin with lower wages, salary raises may not make a significant impact on their overall income. Despite earning more, it may still be insufficient to live comfortably, highlighting the ongoing challenge of turning higher pay into true financial stability.

The Impact of Inflation on Gen Z: Struggling with Rising Costs

What’s more, inflation lies at the heart of Gen Z’s financial struggles. As they are mostly just starting their careers, they are likely earning less overall, making the rapid inflation seen since the 1970s a real shock for any young adult.

In 2022, the inflation rate in the United States reached 9.1%, marking the highest increase in 40 years.

“Gen Z’s experience with inflation has been different than all other generational cohorts,” says Moody’s economist Matt Colyar. “It’s been hotter.”

The pandemic caused supply chain problems, making goods more expensive. To avoid a stalled economy, governments printed a lot of money, which later contributed to inflation.

As a result, everyday essentials like groceries became 8% more expensive, and prices for fuel, airfares, rent, transportation, and education also rose. Gen Z has never experienced such fast price increases, leading to what some call “psychological scarring” from inflation.

Inflation was also high from the mid-1970s to 1981, peaking at 20%. During this time, wages were stagnant, and many families needed two incomes to get by, which led to more women joining the workforce.

Overall, inflation has gone down a lot from its 40-year high of 9.1% in mid-2022, according to the Labor Department’s consumer price index (CPI). However, after dropping last year, inflation increased again in early 2024 and has been around 3.4% since autumn.

While inflation rates have slowed worldwide, Gen Z needs to understand that higher prices are likely here to stay. Higher wages may help, but for young people just starting their careers, inflation makes it harder to achieve financial stability.

Some economists believe that the real inflation rate is higher than reported, as the way inflation is calculated has changed since the 1980s.

The Educational Challenges of Generation Z

Education is also a major challenge for Generation Z, with different issues depending on the region.

A recent report by McKinsey senior partner Jimmy Sarakatsannis and his team shows that student performance worldwide has either stalled or worsened in some cases. The report looked at data from 73 countries over the past decade. It found that only 23 countries managed to improve student outcomes.

Some countries that saw consistent improvement include Singapore, Estonia, and Poland. In 17 countries, student performance declined, while 33 other countries saw no progress. This trend happened despite an increase in education spending in countries across all income levels.

In South Korea, young people are highly educated—almost 70% of those aged 25 to 34 have a degree, the highest rate among OECD countries. However, this success comes with intense stress and competition.

Despite their education, more than half of South Korea’s youth face asset poverty, meaning they don’t have enough savings to cover their basic needs for three months.

In the United States, education is also a financial burden. Tuition fees have been rising faster than the costs of medical care, child care, and housing. Student debt is a major issue, with many recent graduates saying they would rather spend a week in jail than deal with their debt.

This has led some Gen Zers to turn away from traditional college and look for alternative paths, like pursuing trades or attending community colleges, which are more affordable and often offer more practical education.

As a result of economic pressures, many students are choosing degrees that lead to more secure jobs, such as those in science, engineering, and medicine, while humanities degrees are becoming less popular.

Gen Z is also facing rising debt, with debt levels increasing by 15.4% between 2022 and 2023, the highest rise among all generations. At the same time, they are earning $7,000 less than people their age did a decade ago, adjusted for inflation.

The Problems Within Gen Z

While Gen Z faces numerous external pressures, they also have internal struggles that shape their attitudes and expectations. Growing up in a rapidly changing world, with the constant evolution of technology, societal shifts, and global challenges, has led to a generation that approaches work differently from previous ones.

Gen Z and Work Attitudes: Challenging the Stereotypes

Employee confidence and morale are low across all generations, not just Gen Z. However, Gen Z stands out as the most disengaged at work, with only 44% reporting job satisfaction, compared to 67% of older workers. This has led some to think Gen Z is lazy or entitled, but the situation is more complex.

A 2022 survey found that Americans aged 15 to 24 spent 25% less time on work-related activities than those in 2007. Also, fewer American 12th graders see work as a central part of life.

Gen Z’s work preferences show they want mentorship, real connections, flexibility, and work-life balance. They find traditional office jobs with long commutes less appealing. Older generations often misunderstand this shift, seeing it as a lack of work ethic.

In fact, Gen Z is the most difficult age group to manage. A recent survey showed that 60% of U.S. bosses have fired Gen Z workers, citing complaints that they wanted to leave early, start late, and expected high pay.

Gen Z’s Workplace Expectations: Balancing Work, Flexibility, and Diversity

Gen Z places a strong focus on maintaining a balance between work and personal life. In fact, 77% of Gen Z considers work-life balance a key factor when choosing a job. This generation wants careers that allow them to pursue personal interests alongside their professional goals.

The COVID-19 pandemic has further highlighted the importance of flexible work options, with many Gen Z workers now preferring remote or hybrid models. Flexibility in job schedules is also a priority; approximately 72% of Gen Z workers have either left or considered leaving a job that didn’t offer flexible work policies.

For Gen Z, diversity, equity, and inclusion (DEI) are vital aspects of the workplace. Around 75% of Gen Z considers a company’s commitment to DEI when deciding whether to apply for a job. They value workplaces that are diverse in terms of gender, race, ethnicity, and other factors, believing that a diverse team is essential for innovation and growth.

Companies that don’t prioritize DEI may find it challenging to attract and keep Gen Z talent. To this generation, DEI isn’t just a trend but a fundamental requirement that shapes the culture and success of a company.

Gen Z’s Struggles: Real Challenges or Signs of Entitlement?

The challenges Gen Z faces have led to a debate about whether these issues are real problems or just a sign of younger generations being seen as lazy or entitled. Let’s take a look at both sides to better understand the situation.

On one side of the argument, it’s clear that Gen Z is grappling with unprecedented financial, educational, and societal pressures that previous generations didn’t experience to the same extent.

Rising inflation, student debt that continues to climb, and a housing market that feels increasingly out of reach have all contributed to a sense of economic instability.

Furthermore, the cost of education has risen sharply, creating a barrier to upward mobility for many young people. According to ConsumerAffairs, the cost of public and private school tuition has increased by 310% and 245%, respectively, since the 1970s

In addition to these financial burdens, Gen Z faces a highly competitive job market where job security is uncertain, and many feel that traditional career paths may not offer the same stability or opportunities for advancement as they once did. Given these realities, it’s understandable that Gen Z might feel overwhelmed, anxious, and uncertain about their future.

A study by Ernst & Young found that less than a third of Gen Z feel financially secure, with more than half (52%) very or extremely worried about not having enough money. Many are working multiple jobs to hedge against financial instability.

On the other hand, some critics argue that the way Gen Z responds to these challenges suggests a lack of work ethic or a sense of entitlement.

Terms like “quiet quitting” and “bare minimum Mondays” have emerged, often used to describe behaviors where employees do only what’s necessary to avoid getting fired but show little ambition beyond that.

Critics argue that Gen Z’s pursuit of work-life balance and emphasis on mental health can be seen as a refusal to make the sacrifices that older generations made in their careers. They may perceive the generation’s desire for flexibility and autonomy as a lack of resilience or unwillingness to work hard.

This perception is compounded by the increasing number of young people who are turning to side hustles or non-traditional career paths rather than pursuing conventional career tracks.

However, this perspective fails to account for the unique challenges that have shaped Gen Z’s worldview. Growing up during the Great Recession, witnessing economic instability, and facing a global pandemic has instilled a sense of urgency in them to not only seek financial security but also prioritize personal well-being and purpose.

The American Psychological Association’s 2023 Stress in America report found that young adults (ages 18-34) report higher stress levels than older generations, with an average stress level of 6 out of 10 compared to 3.4 among those aged 65 and older. Gen Z is more likely to report mental health concerns, with 91% experiencing at least one physical or emotional symptom due to stress.

It’s not that Gen Z is lazy; rather, they’re redefining what success means in a world that is constantly evolving. The challenges they face are real, and their approach to navigating these obstacles is a reflection of the changing economic landscape and societal values, not a lack of effort or ambition.

Building a Better Tomorrow: How Governments Aid Gen Z

Governments are actively implementing policies to support Gen Z in various ways, addressing their unique challenges and needs.

For instance, on June 25th, 2022, President Joe Biden signed Executive Order 14035, urging agencies within the federal government to promote diversity, equity, inclusion, and accessibility within the federal workplace.

This order also encourages the government to reduce its reliance on unpaid internships, which often create barriers for low-income students and first-generation professionals. Additionally, there are significant efforts to increase funding for mental health services in schools and communities, providing better access to counseling and mental health resources.

As noted in the article “Future Leaders: Generation Z’s Involvement in Government” published by Elon University, “In spite of the issues that could arise if Gen Z is not properly integrated into the federal workforce, there are policy options available for government agencies to improve their recruitment and retention of Gen Z workers.”

First and foremost, the government must offer a salary that is at least somewhat competitive with the private sector. While it is impossible to ask the federal government to match the salaries of private firms, it still must provide a living wage that allows its employees to not only survive but thrive within their respective communities.

Second, government agencies must continue to operate in a way that allows workers to maintain hybrid work schedules. Following the chaos brought about by the Covid-19 pandemic, many young workers have come to see that not all work must be done in the office.

Local governments are also making a difference. Many cities are reforming zoning laws to increase affordable housing, a key concern for Gen Z due to rising living costs.

Furthermore, governments are focusing on climate change policies, an issue of great importance to Gen Z. This includes investments in renewable energy, sustainability programs, and stricter environmental regulations.

Corporations also need to adjust to the unique working style and expectations of Gen Z to attract and keep this new generation of workers. Gen Z values flexibility in their work schedules and locations, with 75% looking for ways to earn extra income, such as changing jobs or taking on side hustles.

They also prioritize diversity, equity, and inclusion (DEI) in the workplace, expecting companies to actively support DEI initiatives, as mentioned above.

Gen Z wants meaningful work that matches their values, with 69.3% hoping to land their dream job in the next 10 years. They also value continuous learning and career development opportunities.

Future-Proofing Gen Z: Adapting to Economic Realities

To adapt to the current economy, Gen Z can take some steps to ensure their success and stability. First, improving skills and education is important. Gen Z can stay competitive by taking online courses and earning certifications in areas like digital literacy, coding, and data analysis. These skills are in high demand and can help them stand out in the job market.

As many corporations have shifted toward more flexible work arrangements, Gen Z needs to embrace adaptability in the workplace. This generation’s desire for remote or hybrid models may require them to develop strong communication skills, time management, and self-discipline to remain productive in less structured settings.

However, they must also balance this with the expectations of employers who may prefer in-office or collaborative environments.

A study by Barnes and Noble College reveals that today’s students, especially Gen Z, don’t want to be passive learners. They’re not interested in just attending class, taking notes, and memorizing information for exams. Instead, they want to be actively involved in the learning process.

Gen Z students do better when they can fully engage with their education and enjoy the challenges that come with it. For example, 51% of students said they learn best by doing, while only 12% said they learn through listening. These students also prefer class discussions and interactive lessons over traditional lecture-based teaching.

Financial literacy is also crucial. Understanding how to budget, save, invest, and manage debt will help Gen Z navigate economic challenges. There are many online tools and resources available to improve financial knowledge.

Building a strong professional network is important as well. Connecting with others through virtual or in-person events can open up new job opportunities and provide valuable advice. Seeking mentorship can also help guide Gen Z on their career paths.

Prioritizing mental health is essential for overall well-being. Gen Z should use mental health resources available at schools, workplaces, and in their communities. Taking care of their mental health and practicing self-care can make a big difference in managing stress.

Lastly, adopting an entrepreneurial mindset can offer Gen Z more career control. Many in this generation are already running their own businesses, and companies increasingly value employees who bring innovation and creative thinking.

In fact, 13% of Gen Z-ers already run their own business. For those who haven’t started a business yet, getting ready early is still important. Starting a side hustle or business venture can provide additional income and allow them to pursue their passions.

Aligning corporate values like diversity and inclusion is important for Gen Z. However, they may encounter workplace cultures that don’t always match their personal values. Gen Z will need to seek out companies that share their beliefs while also learning how to adapt and succeed in environments that may not fully align with their views.