It’s been more than a decade since a debate began about the interactions of multiple generations in the workforce. When Millennials entered offices in the mid-2000s, their expectations and approach to work created almost immediate friction between their generation and the two before it, Generation X and Baby Boomers. Today, we’re starting to see similar chafing with the arrival of Generation Z, the youngest cohort (as old as 23) who are just launching their careers.
These generations will only function successfully together when organisations fully understand them and integrate them into their cultures by building strong employee connections.
The best approach to this applies the principles and practices of modern leadership in which leaders act as mentors and advocates for their new Gen-Z colleagues, as well as more tenured employees.
Our research indicates Gen Z is not fundamentally different from other generations. Perceptions that they are poor communicators who would rather hide behind screens than interact with others are unsupported. In truth, Gen-Z employees prefer face-to-face communication and want to feel that they belong. They are also willing to work hard when given purpose, opportunities to grow, and concern for their wellbeing. These traits combined with impressive digital literacy make Gen Z extremely valuable.
As we’ll demonstrate in this chapter, inaccurate stereotypes only hinder connection and collaboration, generational fault lines are more imagined than real, and each of the generations are more similar than they are different. While there are some nuances worth noting in how to lead each generation, ultimately, they all need the same things from their culture: a sense of purpose, connection, and appreciation—all of which are possible with the right strategies in place.
Multigenerational workplaces have never been easy for leaders. The latest data show 75% of managers believe managing multigenerational teams is a challenge, and 77% of employees (across all generations) say “different work expectations” are a challenge.1
Misconceptions can create conflict when employees of different generations work together. Millennials may see Baby Boomers as old and out-of-touch and get frustrated when they are slow to adapt to new technology or new ways of working. Gen X might believe Millennials are lazy and narcissistic and feel annoyed when they skip over normal processes and apparently cut corners to get work done. Baby Boomers are aghast when Gen-Z employees leave work at 3:00 to attend a yoga class.
When it comes to collaborating, our study found the generations have various comfort levels with each other. For example, when a Gen-Z employee is working with a Gen-X peer, there is a 67% increased likelihood the interaction will be frustrating for the Gen-Z employee. Similarly, Millennials have a 57% increased likelihood of frustration when interacting with a Gen-Z employee and a 46% increased likelihood of frustration when working with a Baby Boomer.
Gen-X employees have a 38% increased likelihood of frustration when they interact with someone from Gen Z and an almost identical increased likelihood (39%) when it’s a Millennial. And when Baby Boomers interact with Gen Z or Millennials, there’s a 26% and 78% increased likelihood (respectively) that it will be frustrating for the Baby Boomer.
Millennials are the most likely (53%) to project a sense of superiority and admit that they approach things differently than other generations, but they also feel their approach is better (52%). Likewise, they acknowledge they have difficulty relating to coworkers of other generations (37%), but believe stereotypes of other generations are accurate (47%). Boomers, on the other hand, do not feel their organisation should tailor the employee experience to fit their needs.
On a positive note, despite common misperceptions, all generations have a preference for in-person collaboration, which reinforces the need to promote opportunities for connection in the workplace.
We asked employees to assess their likelihood of joining and staying with an organisation for at least five years based on several attributes. The results show similarities and differences between the generations, but there are many more of the former than the latter. Culture is far and away the most crucial element employees consider when joining and staying with an organisation, regardless of the generation they belong to. And employees from all generations want leaders who regularly recognise them from their contributions.
The key takeaway is that even if generations have different nuanced preferences, they still all have the same ultimate desire: to work for an organisation that cares about and appreciates them.
As the table below shows, culture is the top priority, particularly for Gen Z and Baby Boomers, and, perhaps not surprisingly, job security is least important to Gen Z. Income is more important than benefits to Gen Z and Gen X.
The benefits of most interest to Gen Z include paid time off, mental-health days, and activities that create a sense of community for them—things that help create a healthier lifestyle and strong sense of wellbeing. In general, Gen Z also cares less about the brand name or reputation of an organisation, and more about its purpose and culture.2
We also examined the importance of the Talent Magnets (six attributes of workplace culture most important to a person’s decision to join, engage, and stay at an organisation: purpose, opportunity, success, appreciation, wellbeing, and leadership) compared to their direct leader and the work itself. We found Talent Magnets to be slightly more important for the younger generations. For Baby Boomers, the Magnets, their direct leader, and their work have nearly equal importance.
On a more granular level, we found the Talent Magnets of opportunity, purpose, and wellbeing resonate most with Gen Z. This makes sense given that Gen-Z employees say they want to make a difference, grow, and be challenged at work; however, they are also less willing to devote their entire lives to work. For Millennials, the most important Talent Magnets are opportunity, purpose, and success. Gen X places the highest importance on wellbeing and opportunity. Boomers choose purpose and appreciation.
When we looked at different leadership attributes, we found employees of every generation want leaders who regularly recognise them for their contributions. Gen Z and Baby Boomers both seek leaders who regularly connect with and teach them. Millennials strongly prefer the same enlightening leaders, and Gen X leaders who connect their work to the overall purpose of the organisation. All generations place a high value on connecting to purpose, accomplishment, and one another.
The final set of preferences we analysed involve the actual work employees do. Work that helps employees feel like they’ve accomplished something is critical to every generation. Gen Z favors work that’s customer-focused, while Millennials and Gen X prefer work that’s more internal-facing. Baby Boomers identify most with work that strongly influences their direct environment.
It’s clear most employees (especially those in Gen Z) want their work to have meaning beyond a paycheck, and the culture at global consumer goods company Unilever helps them find it with training designed to guide them to their own personal purpose. About 3,000 of Unilever’s 9,000 employees have completed the training so far. The company believes connecting people to a purpose “enables them to bring their best selves to work, which is good for business.”
Jonathan Atwood, VP of Sustainable Business and Communications for Unilever, says, “We all want the same thing. We want to be part of something that changes everything.”5
Bottom line: The four generations in the workforce today are far more alike than their stereotypes would have you believe. Hence, organisations can engage and create great employee experiences for everyone simultaneously if they focus on improving common drivers like purpose, connection, and recognition.
In last year’s report, we examined the importance of modern leadership—leaders who mentor and coach rather than just direct. Modern leaders champion, support, and empower their people instead of simply command and supervise.
One in three Gen-Z employees say they would work harder and stay with an organisation longer if their leader was a “supportive” one.6
Baby Boomers with direct reports may be more inclined to hold onto traditional leadership practices, such as judging productivity based on time vs. outcomes or gatekeeping career development. (After all, that’s the model many of them know best.) But our research shows Baby Boomers thrive when their leader practices modern principles—more than any other generation in most cases.
Another thing to note: diversity and inclusion matter greatly to Gen Z, and not just as they relate to race and gender, but also identity and orientation.7 Over three-fourths (77%) of Gen-Z employees say an organisation’s level of diversity affects their decision to work at the company,8 and 69% of those who work at a diverse company would stay longer than five years (compared to 27% whose company is not diverse).9
Virgin Hotels has changed much of their hiring process to attract and accommodate new employees entering the workforce.
Because Gen Z is keen to try out different jobs in the same company, Virgin created a program where they can do just that. And since Gen Z isn’t as interested in filling out forms, Virgin ditched the typical online application for a new quiz called the Virgin Hotels Compatibility Test. Potential hires have three-minute interviews with three different interviewers who advance candidates to the next round.
The company also uses virtual reality in its onboarding, emojis to replace words in the internal corporate newsfeed, and career days at high schools to meet students who won’t follow a traditional path to the workforce.
These fresh, personal touches do a better job of attracting young employees who will advance the culture of Virgin hotels.10
Every generation in our research says “recognises accomplishments regularly” is the most important attribute in leaders. For Gen Z, recognition is crucial to help them feel they are making a difference and to retain them longer. In a separate study of 600 Gen-Z employees, 79% said more recognition would increase their loyalty to their employer, yet 76% said they are “seldom to never” eligible for rewards and 50% didn’t feel their leaders recognise strong job performance.11
In our Recognition chapter, we lay out the importance of different elements of recognition: where it occurs, how it’s presented, and what awards are most effective. In this chapter, we’ll recommend meaningful ways to recognise three types of accomplishments (years of service, achievement, and everyday effort) for the four different generations.
How: A presentation is most important to Gen X (31% relative importance) and least important to Boomers (27%). All generations (except Gen Z) rank “appreciating the impact on the team” as an important component of this recognition. Gen Z prefers to have stories told about their above-and-beyond achievement.
Where: All generations generally prefer celebrating career anniversaries in front of their teams. And while a scenario with no presentation is predictably the least desirable, Gen X employees also balk at video messages and department town halls.
What to include: Gen Z employees, in particular, prefer an experiential gift.
How: Gen Z places slightly higher importance on the presentation than other generations. They like to hear how their work contributes to the organisational purpose and see how it impacts customers. The other generations’ preferences are consistent with the findings in our Recognition chapter.
Where: Gen Z, Millennials, and Gen X favor achievement recognition in front of their teams. Employees of all generations generally do not want video messages for achievement recognition. (It ranks at the bottom next to “not having a presentation.”)
What to include: Gen Z highly values an experiential gift. The other generations’ preferences are consistent with the findings in our Recognition chapter.
How: The method here is much more important to Gen Z than their predecessors. Presentations that demonstrate how they contribute to the success of the organisation are most valued.
Where: Gen Z, Millennials, and Gen X like recognition in front of their teams. Video messages are demotivating for Gen Z and Boomers. Both would rather forego recognition for everyday effort than receive it via video message.
What to include: Gen Z once again prefers an experiential gift to cash. They also appreciate a meal out. For Millennials, cash or gift cards and experiential gifts are equally desirable.
All generations, but especially Gen Z, thrive under modern leaders who mentor and help them feel connected. This includes sharing information, creating a sense of belonging, periodically checking on their wellbeing, and valuing their career goals.
Interestingly, for Gen Z employees, these trait preferences differ based on the generation of their leader. The older the leader, the more important mentorship is. If the leader belongs to the Millennial or Gen-Z generations, the employee looks for more transparency and support.
The importance of modern leadership can’t be overstated. Employees of all generations highly value leaders who are clear and open about their processes and decisions. In order to fully engage and inspire employees, organisations must practice modern leadership, no matter the age of their leaders.
VXI, a customer experience company, works with a disproportionately high number of Millennial and Gen-Z employees (78%), so it appreciates the nuances of leading Gen-Z employees and practices modern leadership in the following ways to help them thrive:
Leaders communicate the company’s vision and purpose, stay abreast of current technologies, and are open to new ideas and suggestions. They also actively listen and engage in honest dialogue with employees.
Knowing it can be difficult for Gen Z to receive constructive feedback, they only give performance feedback in one-to-one settings and coaching environments.
Because Gen Z craves recognition, they provide ample opportunities for it, including hosting weekly appreciation events.
And, they actively pursue external awards to give Gen Z employees a sense of pride in the work they do.12
Preferences and best practices may vary by generation, but leaders should be sure to give meaningful, personalised recognition often. As examples, here are three common types of recognition applied to Gen-Z employees:
To recognise extra effort, call out the specific ways employees contribute to the success of the organisation. Receiving the recognition in front of their team, along with a meal out or an experiential gift, is preferable.
To reward an achievement, emphasise how it contributes to the organisation’s purpose or how it impacts customers. Typically, Gen Z likes the recognition to be public with an experiential gift as an award.
To celebrate years of service, share specific stories about how the employee has contributed over that time. For this type of recognition, experiential gifts and custom symbolic awards generally mean the most to Gen-Z employees.
3. Foster in-person collaboration
During our focus groups, Gen Z underscored the need for personal collaboration. In situations like selecting or staying with a company, they say it can make all the difference.
We often hear that Gen Z would rather text than talk, that they grew up behind smartphone screens, and that they don’t know how to communicate in person. We found the opposite to be true—Gen Z craves collaboration and feels interactions are most meaningful when face to face. In fact, three-fourths of Gen Z employees prefer in-person feedback from managers.13
According to our research, when Gen Z is part of a workplace culture that provides regular opportunities to collaborate face-to-face, the odds of an increased engagement score were almost 10x higher.
Collaboration is also strongly linked to modern leadership, and better in-person interactions will impact engagement, eNPS, and work culture for all employees.
The multinational enterprise software company hires nearly 7,000 Gen-Z and Millennial employees every year. To do this, SAP takes many steps to attract and retain its young workforce. A quick sampling:
Knowing Gen Z may not want to commit or stay several years, SAP allows employees to change roles every three months and provides two-week shadowing opportunities with people in different roles. Both programs encourage employees to own their careers.
The SAP employee value proposition is “Bring everything you are. Become everything you want.” So the company highlights employee stories to encourage people to find others like themselves, identify potential mentors, and build an inclusive culture.
An alumni network helps employees stay connected to the company even after they leave. Plus, there’s a formal “talent community” where interested candidates (including those who aren’t initially hired) can stay informed about new jobs.
All of these forward-thinking initiatives make SAP a place where Gen Z wants to work.14
One of our biggest discoveries this year inspires a lot of hope for organisational cultures wrestling with the challenge of integrating four generations of employees. Contrary to stereotypes and anecdotes, research shows the generations are more alike than they are different. They all want to feel appreciated for their work and connected to their organisation’s purpose, which confirms that culture is the most important job attribute for everyone, and that everyone thrives under modern leadership.
However, there are nuances organisations should address in the employee experience:
Baby Boomers want leaders who will mentor them and teach them new skills. They also enjoy doing work that has a high amount of influence in their environment. And they have strong feelings about receiving recognition via video. (The advice: steer clear.)
Gen-X employees are looking for purpose in their work. In terms of recognition, they prefer presentations with their teams over larger gatherings or video.
Millennials value opportunity. They want to develop new skills and test them with challenges. They respond best to leaders who champion their decisions and recognition that involves experiential awards.
Gen-Z employees care most about purpose, opportunity, and their wellbeing. They like to see how their work connects to the organisation’s purpose and impacts customers. They want opportunities to do great work. And they want to be recognised regularly with experiential gifts, symbolic awards, or even a meal out.
Over the next decade, organisations should prioritize culture, modern leadership, and consistent recognition to improve engagement among Gen-Z employees. (These priorities will uplift the other generations, too.)
Organisations that have great cultures, modern leaders, and excellent recognition also see business success. Specifically, they are 4x more likely to have grown in revenue and 3x less likely to have laid off employees in the past year. Those are results employees of any generation can enjoy.
1, 8. “How Generation Z Will Transform the Future Workplace,” Ryan Jenkins, Inc., January 15, 2019.
2. “Gen Z in the Workplace: Everything You Need to Know,” Zoey Chu, Dynamic Signal, September 19, 2019.
3. “What Gen Z Wants from the Workplace,” CMO.com team, CMO by Adobe, June 2019.
4. “The Secrets to Hiring and Managing Gen Z,” Robert Half.
5. “Employee Engagement 3.0: How Starbucks, Unilever Go the Extra Mile,” Lorraine Schuchart, Sustainable Brands, June 15, 2018.
6, 13. “Gen Z Says They Work the Hardest, But Only When They Want To,” Dana Wilkie, SHRM, June 11, 2019.
7. “Understanding Generation Z in the Workplace,” Deloitte.
9. “The Deloitte Global Millennial Survey 2020,” Deloitte.
10. “Need to Keep Gen Z Workers Happy? Hire a ‘Generational Consultant’,” Jazmine Hughes, New York Times Magazine, February 19, 2020.
11. “Gen Z and Millennials Seek Recognition at Work,” Stephen Miller, SHRM, September 12, 2019.
12. “How to identify and nurture Gen Y and Gen Z contact center leaders,” Armando Castro, VXI, February 13, 2020.
14. “How SAP Plans to Recruit 7,000 Generation Z Employees,” Ryan Jenkins, Ryan Jenkins blog.
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