By 2025, Gen Z will account for over a quarter of the global workforce. As a cohort, Gen Z does carry some defining characteristics. The most prominent is a high level of dissatisfaction with their economic and financial prospects. A McKinsey study found that, among Gen Z in the US, only 37% believed that most people have significant economic opportunities, while one-quarter believed that they would never retire. Just 41% believed that they would own a home one day.
That is not to say that Gen Zers – also known as Zoomers – lack professional ambition. A Samsung and Morning Consult survey found that around half of Gen Z aspire to start their own business. However, Zoomers also prioritize work-life balance, career growth, and job stability, suggesting that exciting but risky new ventures may not be for all of them.
It is no secret that Gen Z workers struggle to fit into the traditional corporate structure. A survey by ResumeBuilder found that 74% of managers consider Gen Z employees more difficult to work with than other generations. Startups typically offer the kind of dynamic and flexible working environment that Gen Z workers find more attractive – but that freedom comes with its pitfalls. To offer insights to both startups and large corporates looking to attract Gen Zers as they embark on a career, IMD spoke to two employees with contrasting experiences of these two distinct working environments.
For many Gen Z employees, the most striking advantage of working for a startup is purpose. The Deloitte 2024 Gen Z and Millennial survey found that 86% of Gen Z said that having a sense of purpose was very important to their wellbeing. Half said that they had rejected an assignment because it went against their personal ethics.
Startups are well placed to capitalize on Gen Z’s hunger for purpose. Alice Garnett, a Gen Z content and marketing executive at UK startup Hurd, says that a strong sense of purpose was a big draw for her. “The mission is right there, and I could see and feel the positive impact that I was making, which I don’t think I would get at a large company.”
Gen Z’s emphasis on purpose goes hand in hand with their immersion in world events, setting them apart from other generations. “Gen Zers are so self-aware. They know how to find background information and check whether a company lives its purpose,” says Elina Seppälä, an Executive Producer at Nitro Games who has held positions at both startups and large corporations.
This could be bad news for bigger corporations whose mission statements are less likely to resonate with Gen Z candidates, who will pick up on any hint of insincerity. “I think there is a big mismatch between the Gen Z way of seeing the world and the big corporations’ way,” says Seppälä. “If you talk about purpose, then it should hold water, regardless of what that purpose is.”
Apart from a sense of purpose, the typical startup working structure is a big draw for Gen Z. In 2023, nearly three-quarters (72%) of Gen Z workers stated that hybrid was their preferred arrangement and, according to Deloitte’s survey, Gen Z greatly values flexibility in where and when they work.
They also want employers to trust them to manage their own time and reward them fairly. “Gen Z won’t respect overly hierarchical structures,” suggests Garnett. “You need to have a culture of flexibility, trust, and respect. Trust manifests in flexibility around working hours and the ability to move around and try different things.”
This flexibility requires Gen Z employees to have a high level of creativity, as well as the ability to teach themselves new skills. But, Garnett says, a demanding environment that offers deep involvement in business development is a strong attraction. “I think the opportunity to be creative was the biggest thing for me. You need to be flexible; you need to be creative; and you need to be very independent.”
Seppälä points out that this desire for flexibility extends to opportunities for progression. “If you want to be a company that appeals to younger generations, you need to be more flexible and agile. You need to understand that the hunger to grow is greater than we’ve ever seen before.” Gen Z’s entrepreneurial spirit means that they are keen to take on challenges and responsibility, a need that is often met earlier at a startup than at a large company with a more rigid and hierarchical structure.
Startups also offer greater career support and development opportunities than many assume. “Because the companies are so small, it means you get more one-to-one time with your line manager and with the CEO,” says Garnett. “In a company of 15 people, say, you have so much access to leaders in the business, and they have time for you.”
Often, startup employees lean on external sources of support for opportunities and advice that employees in larger companies would find in-house. As Seppälä says, startup employees find support from other startups: “When working with startups or scale-ups, many people who’ve struggled with the same issues are willing to help. In a bigger company, you wouldn’t call your competitor for help but, with startups, the community you operate in is so strong that everybody’s there for you.”
“When you have clarity and transparency, people know what they’re being measured against, and what people expect from them, and they’re happy to compete and be assessed”-Elina Seppälä, Executive Producer, Nitro Games
Alongside the excitement, the instability of startup life can prove challenging for employees, with one survey from Sifted finding that 87% of startup employees said their work environment had affected their mental health. In such small businesses, which are constantly having to fight for funding, every employee will be aware of the pressure to keep the company afloat.
“As an entrepreneur, you need the energy to keep moving forward even when the business environment is very challenging,” says Seppälä. “You need to keep believing in your team, product, and strategy under strong pressure to perform.”
This constant need to fight for the business can have negative repercussions. “As an entrepreneur, you’re often alone,” says Seppälä. “The combination of pressure to perform, isolation, and an uncertain future means that it can be difficult to rest mentally”.
Being unable to switch off from work in this way is likely to be a deterrent to Gen Z workers. According to Deloitte, work/life balance is the top consideration for Gen Z when choosing an employer.
Blurring the boundary between home and work life can be especially problematic in businesses that are strongly motivated to do good. “You do tend to get a lot more emotionally invested,” says Garnett. “Particularly with mission-driven work, where you’re working closely with the founder, for whom the company is their everything, it’s their baby.” She agrees that strong emotional commitment cuts both ways: “It’s a double-edged sword because it can be a driving force, but [heavy emotional investment can make it] incredibly disheartening when things go wrong.”
Larger companies can also offer greater clarity around processes, responsibilities, and expectations, a clarity that startups often sacrifice in return for greater flexibility.
Seppälä points out that such clarity can boost employees’ confidence. “When you have clarity and transparency, people know what they’re being measured against, and what people expect from them, and they’re happy to compete and be assessed.”
This is especially important when developing new leaders, says Seppälä. “If you want to become a VP or SVP, you must learn how to lead. Big corporations put a lot of resources into supporting leader development. In smaller companies, leaders haven’t developed or had to compete as hard. Often, their leadership styles reflect this.”
Rather than try to share startups’ ideological space in the market, large corporations should focus on improving work-life balance and leadership development opportunities.
Startups and large corporations both speak to different Gen Z priorities, and the key to attracting the best talent will lie in choosing the right focus.
While startups can lean into their mission to attract talent, large corporations should not seek to imitate their purpose-driven focus. Gen Z will detect any misalignment between mission statements and corporate action, so it’s advisable that corporations remain true to their founding principles. “If you talk about purpose, then that should be embedded into every single action that the company takes,” says Seppälä.
Rather than try to share startups’ ideological space in the market, large corporations should focus on improving work-life balance and leadership development opportunities, areas where they can flex their greater resources to differentiate themselves from startup culture. At the same time, they can learn from startups by softening the hierarchical environment and offering Gen Z the flexibility to think creatively and grow professionally.
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