Employee engagement in the U.S. has hit an 11-year low. More concerning, this engagement deficit is affecting younger workers more than older ones. Gen Z employees have experienced a five-point drop in engagement (from 40% to 35%) since 2020. In contrast, engagement among Baby Boomers has risen two points (from 34% to 36%) during the same period.
The implications are striking.
First, the nation’s most engaged employees are aging out of the workforce. Second, their vacancies will be filled by younger, increasingly disengaged workers. And third, as the ranks of these younger workers swell—Gen Z will constitute about 30% of the workforce by 2030— their lack of engagement could cripple their organizations’ performance, eroding productivity, quality, and customer service.
To turn the tide, employers need to develop strategies to sustain high levels of engagement among their current and future Gen Z employees. One strategy that can help employers accomplish these goals is to be more transparentabout their organizations and the employee experience they provide.
Transparency is non-negotiable
Younger workers prize transparency to a greater degree than previous generations—and their reasons are clear: “They seek meaning and fulfillment in their work,” notes a recent LinkedIn blog post, “and they are passionate about aligning their personal values with the organizations they choose to work for.”
In fact, LinkedIn reports that 74% of Gen Zers say it’s important that they work at companies whose policies and practices align with their personal beliefs, and 87% of Gen Z professionals surveyed say they’re willing to leave their current jobs if they found a different employer whose values more closely align with their own.
In other words, transparency is non-negotiable for Gen Z. It’s also critical for gaining their trust because it signals a commitment to a culture of honesty and respect—the type of culture that younger workers are seeking.
It’s widely known that younger generations want their employers to be transparent about diversity, equity, and inclusion, their environmental stance, and thorny social issues. But Gen Z aren’t only focused on “big issues.” They also want more transparency around basic aspects of their work and the employee experience offered by potential employers.
3 transparency focal points
When it comes to attracting, retaining, and engaging younger workers, transparency around the following three subjects is paramount, as they represent the top three reasons Gen Z workers accept jobs.
- Career development
Career advancement is essential for Gen Z workers with 61% wanting their employer to provide more career development opportunities, and 76% wanting more time to learn or practice new skills. McKinsey & Company estimates that 74% of Gen Z and Millennial employees are looking to leave their jobs because of a lack of career mobility and skill development.
This strong affinity for career development is rooted in Gen Z’s search for financial security and a shared entrepreneurial spirit. Clearly, employers that want to build engagement and strengthen their relationships with younger workers should consider creating career development plans that map growth opportunities and possible career tracks.
- Compensation
Gen Z cares more about compensation than other generations. They’ve lived through multiple global recessions, economic downturns, waves of layoffs and unemployment, and spikes in inflation and the cost of living. They’ve also been saddled with hefty student loan debt, and many have witnessed their parents struggle financially. As a result, Gen Z prioritizes financial stability and seeks out employers that are open about salary ranges and compensation practices.
A 2023 survey of 3,700 U.S. college students found that 85% identified pay equity and transparency as their most important consideration when applying to jobs, and 53% of Gen Z wouldn’t even apply to a job if the description didn’t include a specific salary range. Gen Z also discusses pay more often and openly (with their employers, colleagues, and personal and professional networks) than previous generations of workers.
- Meaningful work
According to research from Great Place To Work®, a lack of meaning or purpose in work drives Gen Z out of jobs and makes it the generation least likely to stay with an employer long term. Gen Z employees who believe their work has meaning, however, are three times more likely to remain with an employer.
Retaining Gen Z workers is crucial to the effective recruitment of other Gen Z workers because, according to Great Place to Work, “Gen Z workers who say they want to stay with their organization a long time are also three times more likely to recommend their organization to others.” One way that managers can help employees experience more meaning in their work is to set aside a few minutes at the end of one-on-one meetings to establish a goal that will have a significant future impact.
Additional engagement boosters
Here are two other ways to further strengthen engagement and retention among your Gen Z employees.
Provide mentorship. A majority (83%) of Gen Z workers believe mentorship is crucial for their professional development. Offering access to company leaders and more experienced colleagues is a powerful way to set Gen Z employees (and your organization) up for success. However, only about half of Gen Z workers successfully report securing a mentor. Flexible and remote work may be partly to blame, as being away from the office makes it harder for employees to establish strong relationships with colleagues.
Set clear expectations around flexible and remote work. This is especially important for younger employees who want and need mentoring. Setting a specific number of days or hours for in-office work provides the in-person time necessary to build strong personal relationships and helps Gen Z feel a deeper connection to their organizations.
Gen Z is vital to the future of every organization. But like every generation before it, it needs support and guidance. Employers that improve transparency around the employee experience and support they provide will re-engage younger workers, improve talent attraction and retention, and lift their overall performance.
Robert Sheen is CEO of Trusaic.
