Spilling the Tea on Gen Z with Eric Wagatha

Today’s episode features guest host, Kerry Sette, head of Consumer Insights and Research at Voya. To better understand the challenges facing Generation Z and their impact on employers and the workplace, Kerry is joined by Eric Wagatha, head of Consumer Life at GfK North America, part of the GfK Group and one of the largest market research companies in the world. GfK Consumer Life is the most comprehensive and longest-standing consumer trend study in the world. Together, Kerry and Eric discuss the ways in which employers have an opportunity to support this cohort of today’s workforce as a group that is already imposing its influence in all aspects of American culture.

Eric Wagatha and GfK Group are not affiliated with the Voya® family of companies.

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Transcript

Speaker 1: 0:00

You are listening to The Hire Through Retire podcast, brought to you by Voya Financial. We are talking to the best and brightest in the industry to bring you the latest in benefits, savings, and investment trends in the workplace, tackling all things from 401ks to HSAs, and everything in between. Come along with us on our journey to help all individuals become well-planned, well invested, and well protected.

Speaker 2: 0:26

Welcome back to The Hire Through Retire podcast. I am Carrie Setti, head of Consumer Insights and Research, and I'm super excited to be joining as your guest host for today's episode. We have an exciting agenda today, and we're going to talk all about Gen Z and more specifically Gen Z as a workforce. So just a reminder, these digital natives were born in the late nineties to early 2000 tens, and they represent about 19% of the US population. We've seen that this group is already imposing its influence on all aspects of American culture, but the big question is, are companies really ready for this generation? So to better understand the challenges facing this cohort and their impact on employers in the workplace, we have with us insights expert Eric Waha. Eric is head of consumer life at GFK North America, which is part of the GFK Group, one of the largest market research companies in the world. And gfk, consumer life is the most comprehensive and longest standing consumer trend study in the world. So, Eric, welcome to the pod. We're so happy to have you today.

Speaker 3: 1:47

I am thrilled to be here, Carrie, really, uh, uh, enjoy the opportunity to come and speak to you today about and Gen Z and, and certainly the generations around them as well.

Speaker 2: 1:57

So, without further ado, let's spill the tea on Gen Z. So Eric, I'm gonna start, just give us the basics, you know, how can we quantify this generation's presence in the workforce? What kind of impact influence are they having? You know, what are their needs or, and, and expectations?

Speaker 3: 2:18

Yeah, sure. Let's get right into that. Um, you know, first and foremost, and I think alluding to what you said earlier, earlier, they are around 19% of the actual population in the US today, but they range from, you know, 10 years old till about 24 years old. So, in terms of actually being in the workforce, they represent about only 6%. So certainly this is the right time for, you know, employers and, and, and marketers, uh, to be looking at this generation. So over the next 4, 5, 6, 10 years, they certainly will become a, a larger part of the workforce and will, uh, cap up near where millennials are today at about 30% in the next decade or so. So this is certainly the time, a as we're discussing today, to be thinking about and planning and recognizing some of the key differences we do see from, um, gen Z and their expectations from careers and work, and obviously the environments they're gonna be in. A few of those I think are well recognized or, or, or talked about in the media. And, you know, we've had these expressions like, uh, you know, quiet, quitting and, you know, relax Mondays and all these cute expressions. I I really want your audience to recognize that. Um, this is a young generation and like any generation that precedes them at this sort of formative stage of life, they are looking to launch themselves, right? They're looking to build a career. They are looking to ultimately expand in personal relationships and, and some level of material acquisition, whether it's the new car or eventually the home or, or the nice vacation. So obviously, you know, some of the fundamentals about career, uh, stability, some sort of obviously financial incentive, those are staples, and frankly, those are not changing. But as you mentioned earlier on, uh, this disruption that Generation z, uh, grew through, right? We have covid, we also had political disruption, even though, you know, the, the world place of where the US sort of sits right now as a country, as a world power, these have all had an impact on Generation Z and their attitudes towards work and, and even their employers themselves. And so how that manifests itself today is really looking at a, a sort of rebalancing, uh, between what a career means for them as well as what they're willing to give to their employer. And ultimately, that work-life balance that frankly is, is a concept that's preceded Gen Z. It goes back to, to Gen X and, and millennials before them. That looks at really trying to be focused on meaningful work. Uh, this is a generation that's not going to appreciate grinding, you know, working hard for a purpose, for a direction for meeting. Absolutely. But I think, you know, this idea of working that 60 hour week, obviously there are some who are that dedicated, but, uh, holistically speaking, we now have the technologies and the work environments that allow our employee employees to be much, much more effective with the time that they're putting towards that work. And this is a generation that's going to emphasize that, right? It is work hard, but definitely play hard. However, they define that for that generation.

Speaker 2: 5:40

I've heard that, you know, therefore, a into, you know, the workforce was somewhat unconventional. And so I guess the question I have is, you know, is that dream of climbing the corporate ladder? Is, is that their dream? Or, you know, I've heard mention of, you know, side hustles freelance work. Does Gen Z, do they all wanna be TikTok famous?

Speaker 3: 6:07

I'd say probably a certain number of them. Do, you know, obviously there's also the generation that grew up with the concept of the influencer, right? The social media influencer and posting videos. But there's even some of that, I think we've seen in the past years around these sort of travel influencers being, you know, kind of pushed back from, from, you know, the hotel and hospitality. Look, in, in any generation, there are gonna be those who maximize technology or, you know, creativity for, for their benefit. I do think you're gonna find them back to your earlier statement about kind of an unconventional entrance, again, coming of age right now, getting into the workforce. With all of the shifts happening, we do see Gen Z, you know, not necessarily getting right into that, that salary job, the idea of the gig economy or even freelance and, and independent contracting. This is something that we general see a little bit more, again, at that life stage. I don't, you know, don't get me wrong there, but think about the past eight years of their upbringing. We, they, they came of age also during a presidency from a gentleman who was a, a businessman or not, or, you know, an entrepreneur, not a, a traditional politician. So, take that into effect. Take into obviously the social media and the creative channels that, that are available to monetize. Um, you do have a generation that is much more open to non-traditional ways of, uh, doing good creative and productive work, meaningful work yet, uh, with new revenue streams for them. So I don't think these are necessarily going to go away, but again, as this generation gets a little bit older into other life stages, they're still going to be looking for stability, uh, more than frankly anything else. And, and then we, we do find, again, more traditional corporate environments or, or traditional work or labor environments being more, uh, opportunistic for them.

Speaker 2: 7:57

That's great to just think about them as workers, but no one can really ignore the current, you know, sort of uncertainty that we're having in the economic environment, you know, such high inflation and cost of living. Now, your research concludes that Gen Z is less upbeat, a little more realistic than their millennial counterparts. And you mentioned stability and security certainly matters to this, you know, generation almost more than status. So how does this present itself in their behaviors at work? What do they want out of their jobs? How are they valuing their labor? Um, and to your point, is this just something that's gonna change as they get older and, and enter into a new life stage? Or is this something that's really gonna just stick with them because of the time that, that they've grown up?

Speaker 3: 8:54

Well, you know, part of this, this, and if I can go back maybe a generation to, to, you know, kind of get to a response is, you know, you have to look at again, gen Z are, are the past five, six years with Covid. And you know, now we're with inflation. Their environment is one of, of, of challenge, frankly, they are also the children of Gen Xers, which, which have been known, you know, to notoriously be cynical and, and, and pragmatic, which is really different than the millennials before them, generally the kids of boomers. Uh, that, that was the, the, you can, you know, you can do it all generation, right? The world is your oyster. So part of the Gen Z kind of attitude is certainly one that is societally driven, what's happened around them, but also coming from within the household. So on the one hand, we can say they're not as optimistic, but really it, it, it creates a tougher skin, frankly, for this generation. So when we are looking in the corporate environment and work, you know, in America, uh, this is very interesting. When we look at our, our global research, you know, America, we are certainly always driven or encouraged to go towards that corner office, right? Rise to the highest level of corporations, and you're seeing Gen Z kind of putting some boundaries around that, uh, a willingness to, to do what it takes. But really, again, to what I said earlier on, finding that balance betw be between meaningful work, you know, obviously, uh, some type of compensation that that is useful to them, but balancing with other issues with their lives, part of it, being personal, what they're doing outside of the work, but also part of where the corporation itself is going. And what I mean by that is it's much more than just the work I'm doing and the paycheck I'm collecting. We are seeing that this generation is so socially focused, socially conscious that they are also looking for the leadership of the organization to have a, a cultural or social agenda, hopefully one that aligns with their personal values. I think this is going to be really the first generation that, uh, you know, c s r activities aren't just directed outwards, but also directed inwards for buying in from the employees, these young employees themselves. I think that's kind of the, the, the unique twist that we're seeing. This is also a generation that wants to grow in, in other skills. So obviously, whether it be, you know, in leadership skill, uh, management or, or soft skills, even things like around mental health coping mechanisms, we're gonna find our employees asking our employers to provide more resources that yes, can impact their abilities at work, but a also, uh, are beneficial to them outside of the work environment.

Speaker 2: 11:38

And you brought up Eric, an important point. When we think about Gen Z, and we've heard a lot about this mental health crisis, I've seen some data that suggests the aspect of their health that they're most concerned about. Is there mental health? Is this something that's going to continue to be a trend and something that employers need to take note of? Should they consider things like mental health days or, you know, ramping up their, you know, EAP type benefits? What are your thoughts on that?

Speaker 3: 12:11

So the concept of mental health is certainly something that has become more mainstream. We've actually had, you know, famous athletes, uh, you know, talk about it and bring it to the forefront. So this is a generation that doesn't see this as a taboo dis discussion. So obvious some something that employers can, um, get involved with. Part of this is certainly life stage driven, uh, young individuals, you know, crafting their own identity, trying to kickstart their lives. Certainly this is a ch a challenge for them. But for Gen Z, what seems to be a unique, uh, aspect of it is how mental health plays into, uh, the nature of relationships. You know, on the one hand we always talk about, well, this is the, these are digital natives. They're fine with everything, visual, not completely right? This is also a time of their lives where it is about building relationships and, you know, in kind of formalizing who they are as individuals. So we actually see in our data and their secondary data that that looks at the concept of hybrid work, who's willing, who's more interested in hybrid work? And while Gen Z on the one hand can navigate hybrid work environments working remotely, they're also on the flip side. And I say, you know what? I do appreciate a physical work environment where I can meet people and build meaningful relationships. So I think with Gen Z, we really have to look at this and or attitude when we talk about relationships as, again, as it plays into mental health issues, which is kind of juggling the facts of life, but also juggling the need for, uh, relationships that go beyond the virtual.

Speaker 2: 13:41

Another thing I found interesting is that this cohort is much more focused on inclusion tolerance, you know, the collective power versus rugged individualism often associated with the American identity. I guess a big question on some folks' minds are, you know, are American values shifting with this younger generation? Is there anything you can say about that, especially as it relates to what it might mean in the workplace?

Speaker 3: 14:13

Yeah, I, I think when we talk about American values, obviously there's a distinction between what is, you know, kind of holistic, what is Americana and, and what is seems to be unique with it is this generation, again, they represent only 19%, they're young, their voice is growing, but it is not necessarily setting the entire cultural agenda. What we are seeing with this particular generation, and again, it does play into some of the longer term shifts we're seeing, you know, in the US, is, uh, this idea of looking sort of beyond, you know, Americano, right? That we are part of a global organization that we increasingly recognize and appreciate diversity, uh, internationalism, you know, the influence and impact of other cultures. And so this is a generation to think about if you are growing up in this kind of environment, if you're going, growing up in, you know, black Lives Matter environment, right? And, and certainly, you know, women's rights and what's going on right now, these become sort of endemic to part of the fabric of, of your identity and, and how you think. So I definitely believe that Gen Z and our data definitely supports this, is much more on board, um, and, and cognizant around issues of inclusivity, uh, obviously diversity and, and globalization, frankly. So, um, you know, again, these are issues regardless of whether your audience is, is, you know, a large organization or not, this is how these people think. So again, they're going to be looking at you and asking, what role is your organization playing in this, uh, externally? But how are also you recognizing this, uh, internally?

Speaker 2: 15:49

You mentioned earlier remote work versus hybrid work and, and being in person, it seems like for Gen Z, there might be a little bit of a love or hate relationship with technology. So I guess, you know, from a post pandemic, really endemic standpoint, right? What are the lasting effects on this generation, especially as it relates to their, you know, love and or hate of technology? And what, what are you seeing as far as trends there?

Speaker 3: 16:21

Yeah, absolutely. Um, you know, I'd probably argue that our love affair with technology peaked with millennials. And, and we see this quite clearly in terms of their positive attitudes as well as, you know, their spending. Uh, you know, technology solves everything. But again, think about Gen Z. This is a generation that grew up with cancel culture, you know, cyber bullying, you know, data and ID hacking. So that's part of the dialogue. They've seen, you know, they've seen, you know, videos of self-driving vehicles on YouTube, uh, having accidents. So they're, they've seen both the positive narrative as well as the, you know, the non optimistic narrative. And it's not to say that they're anti-technology or Uber pro technology is they see the entire narrative. So for them, technology is truly a tool. And if that tool is effective, it's efficient, they'll embrace it. If it slows them down, if it's glitchy, they'll discard it. So I, I really do see this generation as looking for optimal solutions, whether they be analog or digital. Uh, I, I said to a client a long time ago, nobody talks about how impressive a fork is, uh, but perhaps when the fork was first invented, everyone rallied around the table and said, this is the, you know, the greatest things, you know, the greatest innovation. We don't talk about smartphones. This is a generation that's seen 10 generations of iPhones, right? So that's nothing new to them. So I do think when it comes to working remotely, uh, again, it's that balance that we're, we're talking about this and we'll work, but whatever technologies the, the company offers or has their employees use, it should be flawless. Uh, I think the last thing we want is a generation z uh, group of individuals sort of griping about, about, you know, it and, and bandwidth and, and, uh, streaming, uh, capabilities when we are actually encouraging them in some ways to be working remotely. So again, this generation very much look at the optimal solution for them, whether that be analog or digital, because they'll embrace the, the preferred and more effective one.

Speaker 2: 18:27

What do you think about, you know, personalization? Because one of the benefits of technology, right, is that we can certainly serve up customized personalized options, you know, for employees. Is this something you think that Gen Z will expect in the work workplace? Is this something that could be a benefit of, of technology?

Speaker 3: 18:50

The challenge is the reason why we use technology, right? Is it the, the scalability of it? Certainly. So for obviously a, you know, a, a huge, a large organization with thousands of employees, you know, that clearly has a, you know, there a cost benefit to, to doing that and, and, and customizing it. I'd argue we, we probably need to look more at what the internal situation is. Um, you know, if we're doing some kind of training, can that be customized digitally versus simply doing it in person? You know, I mean, I guess the greatest customization could be somebody at the head of a conference room saying, uh, you know, James, let me answer your question. Or, or, or Maria, uh, let me think about that and get back to you. You know, i, i, let's not underestimate the instantaneous customization that can happen through, um, you know, human power, not just technology power. So I, I, I do think it is situation specific and obviously, you know, uh, you know, if your company is spread around multiple time zones around the world, uh, you know, hundreds or thousands of employees, sometimes, you know, you, you can't solve it in a now long way.

Speaker 2: 19:51

So Eric, you know, if you're an employer of a large organization and you're trying to attract and retain this new generation of workers that are starting to come in, what do you think is really important that they know about this specific generation that's different than others that we haven't already talked about? Is there's one thing that you would like to leave with an employer who's serving and, and making sure that they have the right benefits in place to serve this generation, that they're engaging them, retaining them. I mean, we have seen in some of your research, you know, that workplace benefits are absolutely critical, um, in terms of why they go to a certain employer and sometimes even why they leave an employer. So what's important for someone to remember when they think about this generation that's really unique to the time, you know, again, when, when Gen Z grew up and what they're looking for?

Speaker 3: 20:50

Yeah, I mean, this is obviously not a, there's not a simple one answer that, that that fits all. But I would say, you know, what, we've seen obviously over the, the generations, you know, that the, the employer or management listens more and more to, to staff and, and new people coming in from boomers to Gen X, to millennials. We are seeing with Gen Z a, as we've seen with millennials, how the workplace is adapting to the new inflow of workers, rather than necessarily asking, um, you know, the the young entry level people to adapt to the environment. So I think Gen Z is going to get the benefits o of that, you know, that evolution o over time. But with them, again, because I, we said, you know, they're pragmatic, right? They're focused on safety and security. I honestly feel that the clearest and most important thing, uh, a company can do is be as transparent as possible with those, those that generation in terms of what the expectations are and what that package of benefit is, what the, the, the workload, um, or career path can be. And, um, where the company is, is willing or setting boundaries between, you know, the kind of that work, work life ex expectation. Um, you know, no longer can an employer just focus on what happens within their walls, um, or that eight hours, I, I, I do think they need to take into greater consideration what their employees needs are both physical and mental within the organization. But in the after hours, uh, and, and weekends, when you look at youth right now, you're trying to say, well get into a benefits program, get into retirement. They're not focused on retirement saving at 22 years old, what they're focused on. Exactly. We talked about how the heck do I pay off my college debt now, find me a, a a fund or a way, you know, call it the debt repayment program. And the employer helps me somehow with, I mean, now you're talking about something that is more near and dear and immediate to me, 65 re you know, or whatever, 59 and a half on a 401k. They're not even anywhere near thinking that far. If you really think your average 22, 23 year old coming outta college is gonna care about a 401k, they're caring about how am I gonna pay for rent and how am I gonna start, you know, this college debt? Cuz that's the one bill now they're already getting once a month. As soon as they get their first paycheck, they start getting, you know, they get bills from Uncle Sam on that, on that tuition. So, uh, i, I don't know if you guys may have a solution or that may already exist out there, but I think that visibility, not from just the solutions from Voya, but also again, internally, any organization helping their, their new young staff, I think is critical. That's

Speaker 2: 23:34

Great insight. Um, and advice for, for employers. One last question that I had, Eric, are they really rethinking the four year college degree? Are they not ascribing as much value to a college education as prior generations? Is this transitory or is this something you think could really catch on? Because I, I think about the longer term potential implications of that, you know, for an employer, you might have to rethink some of those requirements if that's something that sticks.

Speaker 3: 24:07

Yeah, no, look, the US is in a very unique position, uh, in terms of, you know, young people going to college, uh, the cost of college, uh, which, which has a, a huge scale and, and the benefit. So the reality right now is, look, somebody with a four year college, uh, education, uh, will undoubtedly have a higher income than someone with, without a post, you know, post high school education. So those numbers are quite clear. What the bigger question is right now is what's that return on that investment, right? Because depending on the university of investment can be quite high. And so I, I'd argue millennials got the brunt of it. Uh, this whole, you have to go to college, you know, they're the only pathway is through college. Gen Z got the benefit of a bit of a rethink going on right now. Um, the value of perhaps going to community college and finishing up in a four year institution or, um, you know, work study, uh, opportunities on campus or just simply literature and influencers talking about making the right financial decisions. So this is a, this is a generation that is more savvy or perhaps also including their parents who obviously, you know, partake in that decision or funding in terms of really evaluating what's the right college pathway. And, you know, again, for that r o I now to those deciding perhaps perhaps college is not the way, you know, I think this is a greater societal question that that is happening right now. You know, are we bringing factories back? We are heavily moving into an, an exclusively white collar force, and so there are a whole bunch of jobs that are high paying, you know, labor jobs or service jobs that are being underrepresented right now because we encourage employees to go, you know, or young people to go straight to four year colleges. So I'd say this is going to be a longer term shift that I think goes beyond, you know, gen Z to, to gen alpha after them. But I do think for an employer's perspective, the question becomes, um, what am I looking for in that individual? Because you know what, there may be somebody who made the decision to not go to an Ivy league or, or, you know, or, or a higher, you know, cost institution, but may have more than just the academic skills, but the soft skills, the attitude and those kinds of measures that go beyond pure academia. You know, we have candidates that have wonderful resumes, but do they have curiosity? Do they have drive? Do they have an entrepreneurial spirit that might be required for some, uh, white collar positions? You know, that on, on certain teams. And those are measures that I don't believe academia necessarily, uh, prepares the individual for. I think that becomes part of the responsibility of the hiring agency or group to suss out beyond just what's academically, you know, sort of scripted on that resume. I do encourage employers to go that next level because we are seeing, uh, the shift away from, you know, that four year private institution y you know, as, as the only way to get a successful education.

Speaker 2: 27:15

Yeah. So Gen Z definitely, I would say more practical than, uh, than the prior, uh, generations in that regard. And, and even the fact that they're looking at, you know, return on investment and which pathway, even if they do eventually want a, a college education, how do they get there? Eric, I just wanna, you know, big shout out. Thank you to you for an incredible conversation today on Gen Z, and thank you to our listeners for all of your continued support. And as always, thank you for joining us today. Stay well.

Speaker 1: 27:50

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