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Small employers are winning over the next generation

21st Aug 2026 | 05:00am

When my son called me recently to tell me about his new job, I was not surprised I hadn’t heard of the organization before. When I asked, he had a clear story about why he chose them, and it had little to do with fancy perks, a high salary or a brand name, and everything to do with how it matches his personal values, lifestyle needs, and dreams.

As a young father, he wanted a job that had clear boundaries around family time so that if weekends and nights were required, he could plan for them on a weekly basis. He sought a role that would help him discern if his next steps for development (grad school) weref right for him and if the career path would feel worth making the investment grad school requires. He wanted a role that was not taking place on computer screens but in person, local to his hometown. He sought a regular wage and health insurance, since his previous gig-worker pattern lacked predictability. He wanted a team and a leader that he could relate to and work well with, rather than working in isolation.

Lucky for him, and his employer, they found each other.

Could he have taken a role working remotely for a big online retailer or tech company? Perhaps. But most of what he wanted from work would not exist. 

Media attention today focuses largely on the big companies, especially tech, that dominate headlines, particularly with the AI adoption story and ongoing hopes for optimization and efficiency.  But, small companies employ many of us anyway. Firms with fewer than 500 employees make up 99.7% of all US employer businesses. Small businesses employ about 46% of the private-sector workforce. Firms under 20 employees created more than 525,000 jobs in 2025, more than any other size group. 

The future of good work is not at the corporate giants, despite the headlines. It is at the mid-size, the private, the purpose-driven, the ones most of us have never read about anywhere. The trend follows the overall decline in the public’s trust of corporate. According to Gallup, 67% of Americans have a great deal or quite a lot of confidence in small business, but only 17% say the same of big business. 

In areas that matter to young workers, big companies are losing ground. Flexibility, highly valued by entering workers, is far more possible in SMEs: 67% of US companies under 500 employees have fully flexible work options.  Meanwhile, 54% of employees at Fortune 100 companies were under full-time in-office mandates as of July 2025, up from 11% of employees in July 2024. And Culture Amp showed employees at companies with more than 5,000 people score their leaders 10 percentage points lower than employees at companies with 0 to 100 people, on whether they have confidence in their leaders, whether leaders show that people matter, and whether leaders communicate a motivating vision. 

Today, young workers will trade the paycheck, the benefits, and the brand name to get purpose and a life they want, and they will leave big corporations to find it. The employers paying attention are the ones positioned to win.  Deloitte’s recent survey points to over 40% of Gen Z and millennials having rejected a potential employer based on their personal ethics or beliefs. 

The aspiration today for “good work” falls in areas far more nuanced than historical notions of what a good job once meant, like a paycheck, company loyalty, benefits, brand cache, promotion potential, and security. 

There are seven fundamental needs workers have today when they look for a workplace:

1. A purpose-driven culture: Young workers want to work for companies that are conscious about the organization’s impacts on employees, the environment, and the world; one in which actions are consistent with stated values and profit is not the only north star. Workers today will walk away from cultures that clash with their values. Research from Deloitte finds 50% of Gen Z and 43% of millennials have turned down an assignment over their ethics while 44% of Gen Z and 40% of millennials have rejected an employer outright for the same reason.

2. Connected relationships: Relationships at work build on trust and respect, and in which employees feel seen and heard. 

3. A job that matches their skills:  Responsibilities that align with individual talents, skills, and aspirations.

4. Financial compensation: A place where pay is fair and total compensation facilitates meeting basic needs (food, water, shelter, safety, and security). When we feel paid fairly compared to others and we can meet our basic needs, pay drops in priority for employees. It matters, but it is not a key motivator.

5. Lifestyle: An employer with policies and practices that support life outside of work, including flexibility, autonomy, and trust. Good work-life balance ranks as a top priority when these generations choose an employer, ahead of both learning and pay. 

6. Growth: Employers who offer opportunities to grow, expand skills, and develop over time. According to the Deloitte report, one of the top factors for choosing a job for Gen Z and millennials is the ability to learn.

7. Meaning: Work that has purpose and makes a difference to someone or something beyond just production or profit. For example, 20% of Gen Z have already changed jobs or industries over environmental concerns, with roughly a quarter more planning to do so.

We are seeing that what young workers seek from a job today has gotten far more complex, nuanced, and specific than ever before, and yet, employers still find it hard to design their human systems in ways that consistently support these needs.

If your business depends on a pipeline of hardworking, engaged people to accomplish its work tomorrow, you ought to be designing the human systems that appeal to the young workers you want to attract.

Here are some starting points:

  • Design your size and your managerial spans (structure) specifically to ensure that every employee has a connected, direct relationship with a leader whose job it is to bring out their best and build a cohesive, high trust team. Managers account for 70% of the variance in team engagement, according to Gallup.
  • Consider where you can provide flexibility over when, where, and how people do good work. For example, work from home options, hours flexibility, collaboration platforms, and more.
  • Visibly demonstrate your commitment to the well-being of people, especially in the realm of mental health. Tend to manageable workloads, psychological safety, supportive leadership, and healthy team dynamics. Do this through training people leaders to be skilled at human connection, empathy, and care. Promote people who are good at courage, vulnerability, and emotional intelligence into leadership. Train teams on what it means to be a contributing team member. Establish team norms that are grounded in healthy behaviors. Seek out regular input on how workloads are impacting employees and make modifications based on what you learn.
  • Invest in writing a clear and compelling mission, vision, and purpose for your organization and make sure that the whole world knows why you exist. This should extend beyond the product you make or the service you deliver into the reasons it matters in the world.
  • Ensure that your values are not only written down, but exist as behaviors that are visible every day in what people do, how they show up, and what they say.
  • Create meaningful, two-way performance conversations that happen at least monthly between employee and boss where clarification, support, and hard feedback are delivered in both directions resulting in accountability, feeling seen, and results.
  • Make sure people leaders, who are the gateways through which we know our company, are trained and practiced at connective labor and activating the talents of humans for success.

An organization that meets these needs is where my kids work. That is where your kids are going to work or want to work.

Build one of these. 

The employees you need will come, they will work hard, and they will stay, which matters to whether your organization will exist 3, 5, or 15 years from now.