Vice President, Gartner Gartner HR
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Employee engagement: how to attract and retain generation Z

The biggest driver for generation Z employees isn’t salary or benefits – it’s career development. Showing them the paths for learning available to them could make all the difference when it comes to retaining this talent. 

13th Nov 2019
Vice President, Gartner Gartner HR
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Group of generation Z business people in the office building lobby
iStock/Pekic

There is now a growing body of research about generation Z employees (loosely, those born between 1995 and 2010) that reveals them to be exceptionally hungry for career change. Many generation Z employees expect to be rewarded with promotions at much earlier stages in their tenure within an organisation than workers of previous generations.

More often than not, employees quit for reasons that could be easily addressed, or even prevented by more attentive employers.

Often landing in their first graduate roles and facing pressure to secure employment while still fresh out of university, candidates can often feel quickly dissatisfied with their eventual roles.

According to research published by Gartner earlier this year, a growing number of young candidates are regretting their career decisions. In a 2018 poll of generation Z employees, 40% of respondents reported that they would not accept their current job offer again, and around half said they could not see a long-term future at their current organisation.

Candidate regret and its cost to business  

Candidate regret leads to high turnover, low engagement, and low productivity, all of which have a substantive financial impact on an organisation.

It has been estimated that turnover can cost employers one-third of a worker’s annual salary in hiring a replacement if that worker leaves. This represents an accumulation of hiring costs, given that it’s not unusual for a recruiter to request a sizeable chunk of a new hire’s first year salary, as well as training and opportunity costs. In addition, there is the indirect impact of business lost due to a lack of or diminished resources while the vacancy remains unfilled.

A workforce of discontented digital natives

More often than not, employees quit for reasons that could be easily addressed, or even prevented by more attentive employers. These can range from day-to-day roles not living up to the promises laid out during interviews, to the grating management styles of executives.

In fact, according to Gartner’s latest Global Talent Monitor report, in the top ‘attrition drivers’ – factors cited by departing employees as the most dissatisfying element of their previous job – a lack of development opportunity was cited as a top problem area for a quarter of departing employees, globally (25.8%).

Generation Z candidates are particularly quick to look elsewhere if no clear path for development exists. As digital natives, these candidates understand that innovation and change in a workplace are a constant force. Having grown up in a period of intense technological change, these employees also understand that, as technology and business processes develop, it remains vital to stay abreast of the skills needed to grasp new platforms and innovations.

L&D must work with the wider HR function and business leaders to foster a culture in which career development takes primacy and is rewarded.

To this end, Gartner research shows that generation Z workers are keen to leverage various types of development opportunities in order to stay ahead of the game, ranging from training programmes and boot camps, to continuing further education supported by workplace grants and sabbaticals.

According to Gartner’s 2018 Global Labour Market Survey, 23% of generation Z candidates listed such development opportunities as their top attraction driver, compared with only 17% of their millennial predecessors in 2013.

At the same time, compensation has simply fallen down the agenda for young talent. When gauging their ideal career trajectories, employees of this age bracket seek purpose over payment. Employers who fail to recognise the changing desires of their workforce will be the ones who are left behind.  

The onus lies with L&D practitioners

Given that today’s graduates are intensely focused on learning and developing their skills, employers looking to secure career commitments from their generation Z employees must ensure that these opportunities are visibly on offer.

As Gartner research details, learning and development leaders can help optimise their employees’ ability to keep pace with shifting skills needs – and generate tangible business value – by focusing on the development of ‘connected’ learners.

Connected learners are employees who remain in tune with the most in demand skills in the marketplace. Similarly, they have the managerial knowledge to recognize the skills most applicable to gaps in their employers’ capabilities, and equally are aware of where their own skills need improvement.

Fostering these kinds of employees should be the priority of L&D leaders. In order to achieve this, one should take a three-pronged approach. First, there needs to be a market-driven approach to skills identification – making use of objective and thorough sets of data to conduct a meaningful analysis of organisational needs, and to identify the most pressing skills gaps.

Secondly, L&D must work with the wider HR function and business leaders to foster a culture in which career development takes primacy and is rewarded. It is imperative that all parties demonstrate to employees that, in developing the skills the organisation and market needs, they will also grow personally.

Gartner estimates that 70% of development communications should target employees as individuals, speaking in a register that addresses their ambitions and aspirations, where possible.

Finally, managers must connect employees with skill building opportunities beyond their day-to-day roles. One must broker learning experiences to accelerate new skill development and connect employees to cross-organisational, and even extra-organisational, skill building opportunities.

The managers who best elicit the benefits of this cross-organisational interaction are 'connector managers'. Connector managers are those executives who foster meaningful connections to and among employees, teams, and the organisation to develop an employee’s specific capabilities.

Connector managers don’t suffocate their direct reports through the micro-management of every decision, but instead guide their subordinates to people and resources in their immediate sphere, exposing employees to the best of other business units.

By instituting this approach, organisations can achieve tangible business benefits, and massively improve their retention of generation Z employees. Connector managers were shown in Gartner research to boost the performance of employees by up to 26%.

Furthermore, connected learners are eight times more likely to be high performers in the workplace – showing that addressing the concerns of generation Z could actually deliver tangible benefits to business.

Interested in this topic? Read How to make learning and development relevant for gen Z.

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By Bill Fotsch
13th Nov 2019 14:45

If you want to attract and retain any employee, offer them something that other companies don't. Industry leaders like Southwest Airlines, Capital One and hundreds of private companies do this by treating their employees like trusted partners in the business, driving and participating in the profitable growth of the company. This Forbes article provides more background: http://www.forbes.com/sites/fotschcase/2016/05/31/engage-your-employees-...

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By _xxx_
14th Nov 2019 08:35

Organizations are only as strong as their people. By building a strong management strategy, your company can help its employees grow. Leadership should spend their time developing their employees instead of trying to manage them.

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By premsneha moorthy
29th Nov 2019 10:31

The future of any enterprise depends on how engaged employees are at work.As the workplace changes, employee engagement is also changing. Take a look at the future of employee engagement on our latest blog-
https://blog.peoplehum.com/future-of-business/employee-engagement-strate...

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