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THE FUTURE
WORKFORCERECRUITING AND RETAINING
VITAL GENERATION Z TALENT
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ARTHUR D. LITTLEAUTHORS
Lokesh Dadhich, Marten Zieris, Sara Nasaif, Henri Lehmann, Jérémy Lamri

Generation Z (widely known as Gen Z),

encompassing those born between 1997

and 2012, is anticipated to make up over
one-quarter of the global workforce by2025, according to the World Economic
Forum. As the first digitally nativeand globally connected generation,
Gen Z brings distinctive skills andcapabilities to organizations, making

their recruitment and retention essential
for sustained business success in the eraof digital transformation and artificial
intelligence (AI). This is especiallysignificant for companies within

traditional industrial sectors grapplingwith the challenges of digitization,
striving to achieve ambidexterityby balancing agility and innovation

with existing strengths in scale andproductivity.

Nevertheless, the growing presence of Gen Z in the workforce
comes with its own set of challenges. Gen Z as a whole possesses
unique needs, expectations, and motivations, diverging from their
immediate predecessors in Generation Y, commonly known as
Millennials. Surprisingly, our research shows that only 26% of Gen Z
individuals feel that current jobs align with their values. Effecting atransition toward Gen Z compatibility within organizations, without
estranging current employees, demands transformative change andreconfiguration of management styles and structures.

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Based on surveys of Gen Zers in North America, Europe, Southeast
Asia, and the Middle East, as well as interviews with Global HR
directors, this article outlines the essential measures organizations
must undertake in terms of mission, structure, and culture toeffectively harness the invaluable skills of their newest recruits.

U N D E R S TA N D I N G G E N E R AT I O N Z
GENERATIONZGENERATIONYGENERATIONXBABYBOOMERSSILENT
GENERATIONGREATESTGENERATION

1900

1920

1940

1960

1980

2000

FIGURE 1: GENERATIONS BY YEAR OF BIRTHGen Z stands out as the first generation to grow up entirely in thedigital era, devoid of any recollection of a world before the internet(see Figure 1). Unlike their Millennial counterparts, who embraced theinternet later, in their developmental years, Gen Z members are genuine
digital natives, having been immersed in technology since birth.

W H AT S E T S G E N Z A P A R T ?
While acknowledging the risks associated with generalizations,
we note several key traits and characteristics commonly observed
among Gen Z individuals:– Tech prowess: Proficient in the use of technology, they perceive it
as an inherent aspect of their surroundings, rather than a skill tobe acquired.
– Global perspective: The omnipresence of social media hassignificantly shaped Gen Z’s worldview. Exposure to a constantinflux of information around the clock via platforms such as
Instagram and X (formerly Twitter) has not only made them globally
aware, but also influenced their perceptions of life, environmental
issues, ethics, and standards of work and work-life balance. Social
media serves as a powerful lens through which they interpret andengage with the world.
– Challenging socioeconomic experiences: Many Gen Z individuals
have witnessed the repercussions of the 2008 recession on theirfamilies, faced disruptions in education and early career steps
because of the COVID-19 pandemic, and are currently contending

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ARTHUR D. LITTLE

with soaring housing costs. These issues are adversely affecting
their mental health, with 42% diagnosed with specific conditions.
For some Gen Zers, this has led to loss of trust in establishedpolitical and institutional structures.
– Diversity: Gen Z exemplifies a rich tapestry of backgrounds, withnearly half of its members in the US representing racial or ethnic
minorities, as indicated by census data. This demographic intricacy
is a testament to the profound impact of globalization, which has
shaped Gen Z as products of increasingly heterogeneous societies
or melting pots. Additionally, their heightened inclination towardpursuing higher education distinguishes them from preceding
generations.
These factors all contribute to the formation of values that Gen
Z holds dear. Their advocacy for inclusivity, diversity, and social
responsibility stems from their unique experiences, coupled witha profound need for purpose in both personal and professional
spheres. The omnipresence of social media leads to amplificationof their opinions on a wide array of subjects, as well as greater
active engagement. Consequently, this can create an impressionof heightened knowledge and maturity, even among the youngest
members of this cohort.

Comparing Generations in the Workplace
Organizations today boast diverse workforces spanning multiple
generations, each characterized by unique attributes anddistinct expectations:– Baby Boomers (1946–1964): Anchored in a desire for security, Baby
Boomers favor hierarchical structures and often subscribe to a “liveto work” ethos. Many have devoted their entire professional lives toa single employer.
– G eneration X (1965–1980): Thriving in collaborative environments,
Generation X appreciates teamwork while maintaining a selfeffacing demeanor. Respect for their work is paramount, and they
prefer autonomy without the constraints of micromanagement.
– G eneration Y (1981–1996): Driven by a quest for purpose,
Generation Y (Millennials) seek meaning in the organizations
they align with. They actively seek continuous feedback on theirperformance, emphasizing a dynamic exchange in the workplace.
– G eneration Z (1997–2012): Prioritizing mental health support,
Generation Z shares with Millennials a desire to work for companies
infused with a sense of purpose and the flexibility to adapt tovarying work arrangements. Notably, financial rewards hold greater
significance for Generation Z than their Millennial counterparts.

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PERSPECTIVES FROM THE WORKPL ACE
The oldest members of Gen Z have already entered the workforce,
accumulating four to five years of experience and providing valuable
insights into their impact on business. Simultaneously, the demand
for their digital native skills has exponentially increased, underscoring
the importance of comprehending and meeting their uniquerequirements. While differences persist between individuals, Gen Z
characteristics can be generally distilled into four main areas:

1. HIGH KNOWLEDGE COUPLED WITH
A HIGH DEMAND FOR PURPOSE
Thanks to the internet, a majority of Gen Zers (52% in our research)
possess preconceived notions about the world of work, formingstrong opinions about specific companies and industries basedon observed actions — mostly through the internet. They exhibit
higher expectations than previous generations and, akin to Gen Y,
seek employment with organizations that align with their values andpurpose. Notably, financial motivation ranks higher for Gen Z, with
30% prioritizing fair wages.

2. DISLIKE OF CONFLICT AND
A P R E F E R E N C E T O AVO I DC O N F R O N TAT I O N
Raised in the online realm, Gen Zers may question existing norms
and prove less adept in face-to-face situations. For instance, they
may challenge set working hours, preferring flexibility to completetasks efficiently. However, this lack of adherence to traditional
norms may be perceived

G EN Z PL AC ES A PREMIUM O N
AC HIE VIN G A SATIS FAC TO RYWO RK /LIFE BAL AN C E , WITH
57 % O F TH O S E IN O UR SURVE YC O NS IDERIN G IT C ENTR AL TO
A SUC C ES S FUL CAREER .

as unprofessional by older
generations. Additionally,
their digital upbringing may
result in a lack of teamwork
experience, which would
make them more comfortableworking independently.
Conflict avoidance is

a notable trait, and if they feel undervalued or unheard, Gen Z
individuals are inclined to leave rather than engage in disputes, which
underscores the pivotal role of managers in their retention.

3. FOCUS ON WORK /LIFE BAL ANCE
AND JOB FLEXIBILIT YGen Z places a premium on achieving a satisfactory work/life balance,with 57% of those in our survey considering it central to a successfulcareer. Motivated by the desire to safeguard their mental and physicalwellbeing, they seek employer support, including access to wellbeing
services, as standard. Notably, they exhibit a propensity to switch
jobs regularly, especially if they feel unchallenged or underdeveloped.

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ARTHUR D. LITTLE

Retaining them beyond the initial learning and productivity phase iscritical for organizations to realize the returnon investment from their recruitment.

4 . DYNAMIC WORK E THIC WITH
CROSS-FUNCTIONAL ENGAGEMENT
Although Gen Z may challenge the need for set working hours, theirwork ethic remains strong when they are engaged properly, whichleads them to exceed expectations — contrary to what somemight believe.
“In fact, Gen Z’s level of engagement is high when they feel connected
to a task. Sometimes, when they are too excited, they tend to go
overboard, and actually even put in 150% of their personal attention
and effort. Yet, when they are not excited, it’s difficult to engage them.”

Hareth Alsahan, CHRO, Tawal
Given their wider interests and multidimensional digital skillsets,
Gen Z often does not feel confined by the boundaries of a specificfunction, instead expecting to work across departments and areas.
This creates challenges for traditional organizational structures put
in place to deliver clear responsibilities and accountability.
Figure 2 shows that Gen Z has strong requirements across several
areas. When asked to choose the three most important aspects of a
successful career, nearly two-thirds of participants listed earning ahigh salary as one of the factors. They also aspire to achieve work/
life balance while seeking managerial roles and constantly developing
new skills.

65%
57%
EARNING A HIGH SALARY
ACHIEVING WORK-LIFE BALANCEATTAINING LEADERSHIP OR MANAGEMENT ROLES

52%

48%

43%
35%

CONSTANTLY LEARNING AND DEVELOPING NEW SKILLSREACHING A HIGH LEVEL OF JOB SATISFACTION
MAKING A POSITIVE SOCIAL IMPACT

FIGURE 2: SUCCESSFUL CAREER FACTORS OF GENERATION Z

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V I TA L G E N E R AT I O N Z TA L E N T

UNLO C K IN G G EN Z ’ S IMPAC T
Businesses are grappling with global scarcity of digital skills — evenmore so today with the advent of AI. This lack of digital tech talentposes an existential threat to business growth and innovation, withnearly 60% of employers reporting that not having enough skilledemployees has a major or

G EN Z C O NTRIBUTESS PEED AND C RE ATIVIT Y
TO O RGANIZ ATI O NS ,C O MPLEMENTIN G E X IS TIN G
S TREN GTHS IN PRO C ES S
AND PERFO RMAN C E .

moderate impact on theiroperations. HR expert and coauthor of this article Jérémy
Lamri terms this challenge
the “Talent Bomb,” which
signals the looming threatof a skills gap jeopardizingorganizational success. Gen Z
emerges as a crucial force indefusing this bomb, offering essential digitalization and innovation
skills. Notably, 74% of Gen Z individuals in our survey express positivity
toward technology and AI, with none strongly opposing their rapid
adoption.
Gen Z contributes speed and creativity to organizations,complementing existing strengths in process and performance. Their
key skills and attitudes span:– Technology proficiency: As digital natives, Gen Z is positioned toassist companies in navigating dynamic technology and AI-driven
markets.
– C ommitment to learning: Gen Zers, raised with easy access toonline courses, YouTube, blogs, Wikipedia, and now generative AI,
actively develop their skills, propelling organizational advancement
through continuous learning.
– Entrepreneurial mindset: Embracing failure and avoiding blind
loyalty to methods, Gen Z exhibits openness to cultural change anda boundaryless approach to functions and teams.
– Inclusive thinking: Advocating for empowerment and meritocracy,
Gen Z prioritizes skills over gender or color, challenging traditional
hierarchies.
– Focus on purpose: Aligning with broader trends, Gen Z seeks
organizations that have a clear sense of purpose, integrating values
such as sustainability and ethical practices alongside financial
performance.

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ARTHUR D. LITTLE

TA I L O R I N G T H E W O R K P L A C E F O R
G E N Z : S T R AT E G I C R E C O M M E N D AT I O N S
FOR EMPLOYERS
Building a Gen Z-compatible organization, while meeting the needs ofother generations and creating ambidextrous structures, requires indepth change management, focusing on five areas:

1 . E S TA B L I S H I N G A V A L I D S E N S E
OF PURPOSEGen Zers are looking to work for organizations that share their senseof purpose, and already have strong opinions about many companies
and industries based on their expansive networks and extensive
internet exposure. Companies therefore need to transform andembrace this sense of purpose in everything they do, aligning it with
their values to change their organizational DNA and working culture.
When asked to describe their ideal work culture, Gen Z responses
included:– “An environment in which I am able to continue to learn and develop
my skills, while also being able to maintain a healthy lifestyleoutside of work.”– “A place where everyone is supportive, and I wake up excited to
go to work.”– “ Hybrid, challenging, aligned to my job aspirations, nocorporate politics.”
Based on the earlier work of psychologist Kurt Lewin, transformations
generally fit into one of two models:	1. Type I transformation: Adopting certain values (such assustainability), but not embedding them within the organization’s
economic model. Companies adopting this transformation assume
their responsibilities (such as to the environment) without radicallymodifying their activities to align with that responsibility. In
other words, the dominant nature of economic performance is
not questioned, but rather, reconfigured to integrate ecologicalchallenges. The primary business motive remains profit, but withthe aim of “doing less harm.”	
2 . Type II transformation: Undergoing deep structural changes
when adopting a value (such as sustainability) and integrating
it at every level of the organization’s operations. This type oftransformation requires emotional intelligence, open-mindedness,
and a holistic vision. Type II transformation is a mutation, aprofound change that requires courageous questioning of thestatus quo, intense awareness, and a strategic vision.

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While Type I transformations may be a first step toward adopting
important ecological values, they won’t meet the expectations of Gen
Zers who look for an employer that “walks the talk.” Gen Zers may view
it as window dressing, which can be counterproductive to attraction
and retention efforts.

2 . CHANGING MANAGEMENT AND
L E A D E R S H I P B E H AV I O R SManagers, particularly from older generations, must adapt behaviors
to accommodate Gen Z’s aversion to criticism, strong opinions, anddesire for independence. This requires patience and open-mindedness
to new perspectives from managers. Transformative leadership styles,
emphasizing empathy and encouraging creativity, resonate well withGen Z. For example, rather than a simple presentation at their annual
performance review, a Gen Z employee may go further and propose
creating a video displaying their achievements. Managers need to give
Gen Z the space to experiment in these ways.
Gen Zers highlighted some of the challenges they face within theworkplace, citing, for example:– “ Not being taken seriously, with a negative outlook on ourcapabilities, being underestimated.”– “ Unspoken rules that are outdated.”– “Gaining trust/respect from older employees is not easy,
especially in leadership positions.”

3 . C R E AT I N G A TA I L O R E D E M P L O Y E E
JOURNEY
The sense of purpose and concern for Gen Z values has to extend
across the employee journey from initial talent attraction and thehiring process, to developing their skills, all the way to their departureand staying in touch. Essentially, the double helix of organizational
DNA (purpose and identity) has to be present at every step of theemployee journey (see Figure 3).
Purpose and identity must permeate every step of the employee
journey, which necessitates an organization-wide commitment.
Employee journey thinking benefits the organization by creating
specific personas and tailored touchpoints for each cohort, which
can be used to deliver value, as well as attract and retain Gen Z
employees.

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ARTHUR D. LITTLEORGANIZATIONAL DNA

EMPLOYEE JOURNEY

WHAT GUIDES US?

WHAT VALUE DO WE
OFFER OUR EMPLOYEES?

ATTRACTPURPOSE/MISSION &VISIONHIRE
ONBOARDPERFORM
DEVELOP
DEPART
STAY IN CONTACTIDENTITY

FIGURE 3: ORGANIZATIONAL DNA (PURPOSE AND IDENTITY) IN RELATION TO
THE EMPLOYEE JOURNEY

4. TRANSFORMING STRUCTURES AND
W AY S O F W O R K I N G
Flexible, creative organizations require agile ways of working that
replace bureaucracy and hierarchy with a lateral, competencebased approach. Gen Z employees thrive in this environment andculture, which brings creativity to

FLE X IBLE , C RE ATIVEO RGANIZ ATIO NS REQ UIREAG ILE WAYS O F WO RK IN G
THAT REPL AC E BURE AUC R ACY
AND HIER ARC HY WITH A
L ATER AL , C O MPE TEN C EBAS ED APPROAC H .

existing structures and creates
ambidextrous organizations. Thistransformation benefits overallbusiness performance, creating aholacracy 1 that focuses on skills,
capabilities, and ideas, rather
than seniority.

1. Holacracy is a system of self-management in which leadership roles
are not subject to a traditional hierarchy of command.

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Omantel — Embracing Gen Z
Telecom company Omantel has transformed how it operates tobenefit from Gen Z skills. It has built a pipeline of talent to selectpotential candidates from schools, and partners with leading
universities to develop their skills through undergraduate courses.
Once they enter the firm, they are positioned as experts from the
beginning, with promotions and opportunities based on ideas andresults, rather than length of tenure. Examples include:– Its leadership program, which allows Gen Z employees to shadow
the executive team, both on a day-to-day basis and through ashadow board. They tackle and discuss the same agenda as themain board, providing their own insights and ideas, thus enriching
the decision making process.
– Its “No Boundaries” program enables employees to explore
initiatives in any functional area, regardless of their role, breaking
down barriers and providing new perspectives.
– Its in-house innovation program, “fikra,” enables employees
to submit ideas and develop them via sabbaticals into viablebusinesses. Successes include OMPay, a payment service provider,and Sayyad, an app to link fishermen to markets.

“It is very hard to retain Gen Z and its skills, requiring transformation in
how we operate. The days of top-down decision making are long gone,
meaning we’ve put in place the programs to get the best from Gen Z totransform the organization.” Chief People Officer, telecoms provider

5 . E MP OWE RIN G E MPLOY E E S
WITH SUPPORT AND TOOLSGen Z employees are eager to develop and fast learners. Over threequarters (78%) say a company’s commitment to providing ongoingcareer development opportunities influences their job choices.
Therefore, providing them with the opportunities to grow is essential
for their retention. This could be done within their current role,or, given their desire for change, through other roles within theorganization, such as via rotation programs.

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As digital natives, Gen Zers expect to have access to relevant
technology within their roles. Empowering them with the righttechnology and tools (such as AI) will enable them to use their digitalknowledge to lead and drive wider digital transformation within theorganization. Not only will this benefit the business overall, but it
will also enable employees to act as ambassadors for technology
adoption, working with older generations to explain its benefits andmotivate others to adopt it.
By 2035, Gen Z will be the largest generation in the workforce, taking
up more management roles, reshaping the workplace, and refocusingorganizations. Successful companies will focus on life-long learning,
openness, and transformative leadership. This will enable themto meet the changing needs of markets that are also increasingly
dominated by Gen Z consumers. Recognizing and aligning withthe motivations and preferences of Gen Z is crucial for shaping HR
strategies, underlining the significance of a nuanced approach thatavoids broad generalizations and respects the distinct individualityof each employee. Furthermore, establishing an agile and lateralorganizational structure that allows Gen Z to thrive within a diverse,
multigenerational workforce is pivotal for positioning organizations
favorably in the ever-evolving future.

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INSIGHTS FOR THE EXECUTIVEAs organizations set sail into the Gen Z-driven future, HR
professionals and CEOs must chart a strategic course to attract andretain this unique talent pool. Here are some first steps to integrate
Gen Z into the workforce:
1. Cultivate open dialogue, collaboration, and understanding:Establish channels for transparent communication between
leadership and Gen Z employees, while encouraging crossgeneration dialogue to actively address challenges andopportunities.
2. R eassess current employee journey approaches: Examine
current practices in recruitment, engagement, and retention toalign with the unique needs of Gen Z. Consider adjustments inareas such as compensation, evaluation metrics, and working
hours to attract and retain Gen Z talent. In doing this, companies
should adopt a personalized approach, meeting individuals on
their terms, and offer a diverse “portfolio of rewards” that allows
employees to select options aligned with their preferences andmotivations, rather than adopting a one-size-fits-all strategy.
3. Implement initiatives with Gen Z needs in mind: Co-develop
strategic company initiatives around diversity, equity, andinclusion (DEI), as well as professional development, alongside
Gen Z employees, ensuring alignment with their needs.
4. Establish continuous feedback and adaptation mechanisms:
Implement robust systems for receiving feedback fromGen Z employees and the broader workforce regarding theeffectiveness of initiatives, and adapt strategies accordingly.

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ARTHUR D. LITTLE

LOKESH DADHICH
is a Partner in Arthur D. Little’s Dubai office and amember of the Telecommunications, Information
Technology, Media & Electronics (TIME) andPerformance practices.
MARTEN ZIERIS
is a Partner in Arthur D. Little’s Frankfurt office and amember of the Transformation practice.
SARA NASAIF
is a Business Analyst in Arthur D. Little’s Manama office
and a member of the Transformation practice.
HENRI LEHMANN
is a Business Analyst in Arthur D. Little’s Frankfurt
office and a member of the Performance practice.
JÉRÉMY LAMRI
is an HR expert and author.

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