While Millennials currently make up the largest percentage of the workforce, Gen Zers (typically defined as people born between 1996 and the early-mid 2000s) are quickly catching up. As an employer, it’s critical to start thinking about ways to recruit these younger candidates if you want to remain competitive over the next few years—keeping in mind that every generation has a unique set of wants, needs, and demands from their workplace.
We’ll use this post to highlight one area that matters deeply to your Gen Z employees: diversity, equity, and inclusion (DEI).
Want to dive deeper? Download our free eBook “Delivering Through DEI: How Financial Wellness Can Help Your Diversity, Equity, and Inclusion Strategy”
How important is diversity, equity, and inclusion to Gen Z?
77% of Generation Z say a company’s level of diversity affects their decision to work there. This statistic alone paints a clear picture of just how important DEI is to Gen Z employees. There are many reasons for this.
First, Gen Zers are more racially and ethnically diverse than previous generations.
- One in 4 Gen Zers are Hispanic
- 14% are Black
- 6% are Asian
- 5% are of some other race
For this reason, Gen Z employees are more aware of the importance of working at companies that are committed to creating diverse, inclusive, and equitable cultures.
National conversations around systemic racism, discrimination, and DEI have also received more recognition in the past few years, right as Gen Z job seekers have been looking for work. These discussions have given employees more confidence to ask for what they need from their employers—whether that’s demonstrating a commitment to hiring a more diverse workforce or creating spaces for uncomfortable, but necessary, conversations about race.
What Gen Z employees are looking for in your DEI efforts
While Gen Z employees are looking for employers who are investing in their DEI efforts, they’re wary of performative allyship. One study found that almost two-thirds of Millennial and Gen Z respondents believed leaders only pay “lip service” to diversity and inclusion.
Truly impactful DEI efforts go beyond making “diversity” one of your company values or publishing social media posts that profess your organization’s commitment to being an ally. You have to take real action, such as:
- Hiring a DEI officer as part of your leadership team
- Investing in DEI-focused programming for employees, whether that’s manager training or employee resource groups (ERGs)
- Using feedback tools to regularly gauge the experience of your employees of color
Another way to demonstrate your dedication is to rethink your benefits package. Why? Benefits set the tone for your company culture and provide one of the most direct ways to support your employees. Approached thoughtfully, certain benefits can bolster your DEI efforts, such as:
- Diverse family-forming options (adoption, IVF, donor-assisted reproduction, etc.)
- Health insurance with a diverse provider network
- Mental health counseling
- Short and long-term disability insurance
Another benefit that you may not have considered but can effectively support your DEI strategy is a financial wellness program.
How a financial wellness program can help you attract more Gen Z employees
Due to a long-standing history of economic inequality, which is the result of many complex societal, governmental, and individual factors, your employees of color are more likely to experience high levels of financial stress. Unaddressed, this stress can make it very challenging for them to reach a state of financial well-being, which only perpetuates the cycle of financial inequality.
In addition to the impact that financial wellness benefits can have on a company’s DEI efforts, Gen Z employees have additional reasons for wanting more support when it comes to money management.
Gen Z is already struggling with debt
A study found that 28% of Gen Z views their generation as irresponsible when it comes to finances, which is double that of the general population (14%) and well above the percentage of Millennials who say the same (22%). Unfortunately, this sentiment is proving to be accurate. Compared to other generations, Gen Zers are saving the least, with 55% reporting savings under $200 a month. Gen Zers also carry an average of $14,700 in debt.
There’s a reason for this. Nearly 7 in 10 Gen Zers say they don’t have great clarity on how much they can spend now versus how much they should be saving for later.
With the right financial benefits, your Gen Z employees can receive the financial education and personalized guidance they need to improve their financial situations.
The pandemic negatively affected their finances
The COVID-19 pandemic set back many people financially—especially those in the younger generations. In fact, as many as 57% of Generation Z and Millennials said that they have to put off a major milestone due to the pandemic. The most delayed financial benchmarks were buying or leasing a car, purchasing a home, pursuing career advancement, and furthering education.
This is harmful for many reasons. For instance, the Federal Reserve found that homeownership yields strong financial returns and is a key channel through which families build wealth. But, with these plans being put on hold, Gen Zers—especially your employees of color—are also limiting their ability to build wealth. A financial wellness platform can help your Gen Z employees get back on track with their short and long-term goals.
And it’s taking a negative toll on their mental health
43% of Gen Z respondents reported feeling guilty about their debt at least every month—more than other age groups. And carrying around this debt has been found to make people physically ill, create anxiety, and distract them at work.
All of these issues are barriers to Gen Z employees doing their best work and addressing their ongoing financial stress. A financial wellness platform can help alleviate some of the burdens on your workforce. In fact, 53% of employees said they would feel less stressed about their overall financial situation if they had financial wellness benefits.
Gen Zers are changing expectations around the workplace—for the better. Now, for organizations to compete for top talent, they must be willing to demonstrate through their actions, investments, and outcomes that they’re just as committed to DEI efforts as their employees are. If you’re curious to learn more about the role that financial wellness can play in your DEI strategy, download our eBook.