How Generation Z is Redefining the Role of the HR Leader

The aspirations of a new wave of employees are impacting HR strategies and pushing organisations to clarify and redefine their purpose.

Companies are expected to demonstrate their values, which are ever more visible and subject to scrutiny, due to increasing digitalisation.

Leaders are instrumental in successfully attracting talent from Generation Z, those born in the mid-1990s and the mid-2000s. Business leaders represent not only what their company does, but what it stands for. They will increasingly need to make their business attractive to these enterprising, resourceful ‘digital natives’ who are now entering their twenties.

With baby boomers, millennials and older members of Generation Z active in the workplace, the very nature of how a company operates is affected, and its management even more so.

Introducing Generation Z

Generation Z, the youngest of the set, are highly perceptive, due to their online access and culture, and can quickly see through corporate brands that are disingenuous. They want to see companies passionately uphold their principles and stand by what they advocate – not just ‘talk the talk’.

Leadership style, talent retention strategies and employee engagement are just some of the challenges companies will face as a result.

Esther Roman, PageGroup Regional Human Resources Director, observes, “Companies traditionally tend to approach work with a ‘there’s a job to be done’ mindset, whereas employees are increasingly driven by the mission and by being trusted to fully execute their job. Such employees tend to want to contribute, making them ideal entry-level professionals. Employers must therefore review their strategy, so they can find and connect with these potential employees.”

HR Practice Leader for Page Executive in Europe Raphael Asseo expands, “Generation Z put their work ethic, diversity and work-life balance at the centre on their interest and priorities when deciding whether or not to join a company.”

“Generation Z put their work ethic, diversity and work-life balance at the centre of their interest and priorities when deciding whether or not to join a company.”

- Raphael Asseo, HR Practice Leader, Page Executive, Europe

A new wave of resourceful employees

Generation Z are self-motivated and entrepreneurial in spirit. They have been confronted with uncertainties, more even than the millennials, the generation that preceded them. As a result, they seek a job that is meaningful: salary isn’t the bottom line. Furthermore, they have seen their parents’ and older siblings’ loyalty go unrewarded by employers, so for them loyalty has to be a two-way street.

They are digital natives who have grown up in the online world. They are progressive and have had access to more resources than ever. They tend to be great networkers, which significantly improves their chances of succeeding at whatever they put their mind to.

An example of a successful member of this generation is Nick D’Aloisio, born in 1995, a computer programmer and online entrepreneur who founded Summly, an automatic summarisation algorithm. He sold the app in 2013 for a reported $30 million US dollars, making him one of the youngest ever self-made millionaires. He later went on to lead Yahoo News Digest, before eventually deciding to return to university.

Nick D’Aloisio represents the entrepreneurial, go-getting spirit of Generation Z. Others are those who tend to prefer working in flatter corporate structures, and in companies where they can be agile and participate in the decision-making process.

“As our workforce becomes increasingly diverse, it is more important than ever for leaders to have a strong grasp of cultural awareness. In Asia, for example, authentic leadership styles displaying respect and humility can often more effectively build credibility than, say, being brash and overly authoritative.”

- Franck Johnson, director, Page Executive, South East Asia

More traditional companies now need to create common ground for working with such a generation. Flatter management structures and using an agile methodology are just some of the measures that will create the conditions for a more fruitful and mutually respectful working relationship and help in retaining talent.

Is what you stand for attractive to Generation Z?

Reflecting on purpose is important to Generation Z. Companies need to revise what they stand for, particularly as it is expected that the workforce will include at least 50% of Generation Z by 2020.

But how do employers do this effectively? For a start, they must go beyond the marketing blurb and corporate social responsibility (CSR) page that appear on their websites, as these will not whet the appetite of those wishing to be part of a greater cause.

CSR as a cynical act for tax-saving purposes will certainly not impress this generation. Does the company really stand by its chosen cause? Often businesses lose sight of this. Having invested great effort into sourcing a cause and aligning it to their business in the early stages, they allow the relationship to peter out over time.

Esther Roman explains, “Leaders need to ensure that in defining what they stand for, they don’t just ‘tick the boxes’. In an era where companies continually find themselves in the public spotlight, this will soon become all too apparent. This makes the visibility of the employer’s brand, in its broadest sense, increasingly important in the HR strategy, with the need to project value, culture and delivery – all of which need to be consistent and managed effectively.”

Leaders need to ensure that in defining what they stand for, they don’t just ‘tick the boxes’. In an era where companies continually find themselves in the public spotlight, this will soon become all too apparent.

- Esther Roman, PageGroup Regional Human Resources Director

Transparency and flexibility – a partnership in retention

As Generation Z pushes the boundaries of traditional work-models, HR departments will need to review their talent retention strategies. An extreme example is Buffer, a social media company founded in 2010 that publicly discloses its salaries.

In 2015, PayScale surveyed employees regarding job satisfaction and pay. It discovered that the more information employees have about why they earn what they do, the less likely they are to leave. They seek transparency on everything and this even includes management. Does your company have a development plan in place?

Additionally, flexible work models are something that many will not only be accustomed to but will also feel entitled to. At design software company Autodesk, based in the USA, employees can take advantage of a six-week sabbatical, and enjoy free meals and flexible working hours.

Offering flexible schedules and remote working capabilities gives employees a sense of control, particularly around the work-life balance. It also boosts engagement and can help resolve talent shortages.

Such models aren’t restricted to creative or start-up companies; large corporate enterprises are also taking note. They rightly recognise the need to review traditional, outdated policies in order to hire and retain this increasingly important element of their workforce.

Leading by example

CEOs need to be engaging and take every opportunity to communicate what they stand for.

Marc Benioff, Chairman and CEO for Salesforce, is a good example of ‘going beyond business’. When his company was established, he initiated a 1-1-1 philanthropy model, donating 1% each of its products, equity and employees’ time to the community. Benioff is also vocal – and active – on social issues such as equal pay and human rights. His engaging and influential approach shows how an authentic leader can make a big difference.

As the prominent face of the company, CEOs and other leaders should show solidarity and a genuine intent to make a difference, or risk losing credibility. They must ‘walk the talk’, as ultimately employees will mirror managers and managers will mirror leaders.

Profitability is, of course, essential to running a sustainable business. But focusing solely on the numbers indicates a disconnect and a missed opportunity to identify and project what you stand for.

In conclusion

The real challenge for HR is retaining Generation Z, making it clear what the business is working towards and creating an attractive proposition for them. Leaders must consistently demonstrate why their employees have made the right decision in choosing to work for them.

Leaders must consistently demonstrate why their employees have made the right decision in choosing to work for them.

Increasing digitalisation means social media now plays a huge role in forming opinions. Employer review sites such as GlassDoor and Great Place To Work are often the first port of call for candidates wishing to vet a prospective employer, so leaders will need to look at the perceptions they are creating in the online world as well as on the shop-floor.

Key takeaways

• HR leaders need to take into account employees’ expectations around meaningful work and flexible working
• Leaders are highly influential in defining what their company stands for and communicating it in an authentic way