Gen Z: the myths and realities

As with all newcomers into the workforce, members of Gen Z are often mislabeled and stereotyped long before they are able to truly reveal their identity. As you try to predict what kind of employees and insurance clients Gen Z will produce, let’s tune into what they’re actually saying to us right now.

The most educated (and debt concerned) generation

Over last 50 years, we have observed increasing educational standards. High school students are taking more advanced courses, college enrollment rates have skyrocketed, and the higher-order education attainment of the population has climbed from 24% in 1986 to 37% in 2014, according to the U.S. Census Bureau. Yet, it comes at a cost.

More than half of young adults who attended college incurred some debt for their education; and 1 in 5 with educational debt are behind on their payments. Not surprisingly, 71% of young adults (18 to 22 years) cite the cost of education as the top concern of their generation.

Passion or paycheck?

Members of Gen Z graduate with a strong desire to make a meaningful impact on the world. As one of our focus group participants put it: “I am not going to college for seven years and going thousands of dollars in debt just to do something I am not passionate about.”

This highlights the biggest challenge for Gen Z. How does their vision of the ideal employment situation mesh with the realities of adulthood and becoming financially secure and independent?

Some even start to question the lifetime benefits of higher education. For instance, only about half of Gen Z agreed that their school or college prepared them for work. Not only did some feel that they didn’t learn necessary skills, they also feel they didn’t get the necessary work experience that employers are seeking.

Our research shows that over one third of Gen Z says that they want to do passionate work, whether they are employed or not. However, an interesting trend in our research shows that this may take a backseat to job stability as they become more involved in the workforce.

Almost half of Gen Z who are employed said job stability was the top characteristic they were looking for in employment. This could be a result of looming educational bills and a desire to live on their own.

Choosing between gigs and traditional earning

Many misconceptions currently exist about the new generation. One is that Gen Z’s goals in working are somehow different from that of previous generations. While superficially different, the same problems and concerns that plagued earlier working generations hound those entering the workforce.

Gen Z is yearning for financial stability the same way the millennials did. In fact, the practical aspects of money-earning makes Gen Z unlikely candidates for the “gig” economy, considering that many young adults carry educational debt. While alternative work arrangements are widely popular, the majority of young adults want full-time work.

In fact, just 3% of current 18 to 22 year olds stated that they are looking for a freelance/gig type job in the next five years, which helps breaks down myths about Gen Z’s unwillingness to accept traditional employment.

Approaching the new generation

Just like many generations before them, Gen Z has some interesting qualities that make them unique. But they may not be as different as many of the stereotypes suggest. Here are three suggestions we have for approaching this new group:

1. While many people point to Gen Z’s particular interest in technology, our research shows that they actually prefer face-to-face interaction over any other method of communication in the workplace.
2. Although this may fade with time, Gen Z is a deeply passionate bunch. Offering them positions that include things they care about will likely garner more interest.
3. Job stability will become important to Gen Z as they become more entrenched in the workforce. Offering them stable, long-term positions that allow them to pay down their debts will attract them.

Yuliya Babushkina (ybabushkina@limra.com) is assistant director of insurance research for LIMRA International, a worldwide research, learning and development organization for  financial services firms.