"One in Four Workers Will Be Generation Z in 3 Years" What Do They Want? [Jjinbit]

[Asia Economy Reporter Jeong Hyunjin] 'Generation Z (Gen Z)'. This term refers to the generation born from the late 1990s to the early 2010s. As Gen Z fully enters the global labor market, many changes are occurring because they have characteristics different from previous generations. According to the Organization for Economic Cooperation and Development (OECD), Gen Z is expected to make up 27% of workers in OECD countries by 2025. This means that one out of every four workers in major countries will be from Gen Z.

Cash Bloomgarden, CEO of global PR firm Luther Finn, wrote on the 19th (local time) in an article coinciding with the World Economic Forum (WEF, Davos Forum) held after 2 years and 4 months, emphasizing that "business leaders need to make commitments to the new generation" and "to secure future talent, empathetic leadership must be provided." Changes in HR and organizational structures considering Gen Z are continuing both domestically and internationally.

Today on Jinbit, let's take a look at the three values that Gen Z considers important when choosing a workplace. Since their proportion in the workplace will inevitably increase and they are a generation that quickly adapts to rapidly changing society and has a high understanding of technology, it would be beneficial for companies' futures to understand them and anticipate upcoming changes.

① If there is no flexibility, they will quit the company

The first element Gen Z demands from the workplace is flexibility. They want flexibility in working hours and location. Unlike previous generations that prioritized the organization and company over the individual, Gen Z places greater importance on personal freedom and life. Rather than being tied to the company constrained by time or place, they want to secure autonomy and be guaranteed 'Work and Life Balance (WLB)'.

According to a survey conducted by LinkedIn, a professional business social networking service, in January, 72% of Gen Z respondents said they would quit or consider quitting their job if the company did not provide a flexible working environment. In comparison, Baby Boomers and Generation X (born in the 1970s) were in the 50% range, and the preceding generation, Millennials, was at 69%, which is lower than Gen Z. This indicates that flexibility is important enough for them to quit their jobs.

A survey by global HR firm Randstad Australia, targeting 35,000 people across 34 countries, found that 40% of Gen Z respondents aged 18-24 said they would rather quit their job if they were unhappy at work. Considering that only 25% of Baby Boomers answered the same, this is 15 percentage points higher. It was also slightly higher than the 38% response rate of Millennials (aged 25-34). Since WLB is essential for Gen Z's happiness, companies will likely need to guarantee WLB through flexibility to secure future talent.

② Importance of self-development... Reject companies without personal growth

Another characteristic of Gen Z is that they place great importance on self-development. In their work life, it is not just about completing assigned tasks, but they enjoy personal learning and growth, and are even willing to accept a pay cut for it. They tend to prefer jobs that allow them to learn new skills and experiment with them or companies that provide such opportunities.

According to the U.S. Workplace Trust Index survey conducted by LinkedIn in March and released last month, 76% of Gen Z viewed learning as a key factor in building a successful career. Considering that only 55% of Millennials answered the same, there is a gap of 20 percentage points. Especially when asked if they would accept up to a 5% pay cut to gain more growth opportunities in their career, 40% of Gen Z said yes, far exceeding the overall worker response rate of 26%.

Rachel Lipson, a Harvard professor studying organizational culture, told the Boston Globe that some U.S. companies have introduced apprenticeship models allowing employees to earn college credits while working to satisfy employees' desire to learn while working. Global consulting firm Deloitte also advises corporate clients that since employees will need various skills such as coding, effective communication, and creative problem-solving in the future, they should be exposed to diverse departments and tasks.

③ Social values such as climate change and diversity are important

The last characteristic of Gen Z is that they place importance on social values such as climate change and diversity. It is important to them whether the company they belong to or the work they do supports the values they pursue. If these values differ, it can cause stress and negatively affect mental health. As a result, cases of quitting the company or actively voicing opinions to demand change are increasing.

In a Z Gen survey by E&Y last year, about two-thirds of respondents said it was important for employers to state principles related to racial discrimination or climate change. E&Y stated, "Employers need to explain their values, and Gen Z employees are influenced by this." In a survey conducted by Bupa, the UK's largest health insurance company, in January, 6 out of 10 Gen Z respondents said the employer's approach to environmental issues was important.

Bloomgarden, CEO of Luther Finn, recently evaluated that after Russia's airstrikes on Ukraine, when global companies were considering whether to maintain their Russian operations, pressure from employees, investors, and consumers influenced the decision. He said, "Even though companies are pushing supply chain crises and reshoring (returning overseas production facilities to their home country), employees are pressuring their companies to take a global perspective and lead action on key issues."

Gen Z's entry into society is a global issue, not just in Korea. Born in the era of globalization and familiar with the digital world from an early age through IT technology, they share experiences regardless of country or culture, showing similar patterns worldwide. It will be interesting to see how companies and organizational cultures will change considering their characteristics.

Editor's Note[Jinbit] is short for 'Jeong Hyunjin's Business Trend' and 'Real Business Trend,' a section that shows trends in corporate management such as organizational culture and HR systems. Based on analyses from foreign media and major overseas institutions that have not received much attention so far, we will deliver fresh and differentiated information and perspectives.