Generation Z and the labor market in New York City. Impact of their demands and digital affinity on the work environment

Table of Contents

Abstract

Introduction
Background
Problem Statement
Purpose Statement
Research Question and Objective
Hypothesis
Definition of Terms
Ethical Consideration
Delimitations
Limitations
Significance of the Study

Literature Review
Generation Z
Work Values
Workplace and Work Environment
Futuristic Vision for the Work
History of Work
Current Workforce
Developments in the Labor Market

Research Design and Methodologies
Research Worldview
Research Design
Research Strategy
Method of Data Collection
Method of Data Analysis
Population
Sample

Data Collection

References

Appendix

Abstract

Generation Z is entering New York City’s workforce and is about to substitute the Baby Boomer Generation. New York City’s labor market is not prepared for this change. It is the first generation that has grown up with the constant presence of the internet and the rise of social media, which makes it unique in comparison to other generations in the workforce. This study will identify the impact of Generation Z’s demands on New York City’s labor market by conducting a qualitative research with in-depth interviews with Zers that work in New York City. It focuses on the areas of digital affinity, work flexibility, and the entrepreneurial spirit. It is expected that New York City will faces enormous and not, in the short-term, solvable challenges.

Keywords: Generation Z, Baby Boomer, internet, social media, New York City, labor market, digital affinity, work flexibility, entrepreneurial spirit.

Introduction

Background

Each new generation brings new challenges for companies, and the workforce, and also new demands for society. Generation Z [Gen Z, Gen Zers, and Zers] is the future of the global economy. “[It] represents the greatest generational shift the workplace has ever seen. Generation Z will present profound challenges to leaders, managers, supervisors, hr leaders, and educators in every sector of the workforce.” (Tulgan, B., 2013) Generation Z (Gen Z) is now entering New York City’s workforce with roughly 1.85 million members while most of the 800.000 aging Generation Baby Boomers are about to retire.

Gen Z grew up with a constant internet connection. The iPhone was launched in 2007 when the oldest Gen Z members were 10 years old. It is the first generation that grew up in an ‘always connected’ technological environment (Dimock, M., 2019).

“[The Gen Z members] are privy to everything from a dangerously young age […] their access to information, ideas, images, and sounds are completely without precedent. At the same time, they are isolated and scheduled to a degree that children never have been. Their natural habitat is one of physical atomization and relative inactivity, but total continuous connectivity and communication. They are used to feeling worldly and precocious […] highly engaged in a virtual peer ecosystem […] while enjoying the discourse at least of protection and direction from parents, teachers, and counselors (Tulgan, B., 2013).”

Problem Statement

The effects of Gen Z’s constant online presence and how it will affect their role in the workforce is still unknown. Studies have shown that their massive social media usage has a negative impact on real-life interaction. However, members are highly engaged and seek more human connection than the previous generation. Further, no previous generation has ever felt the impact of the growing gap between the unskilled and the highly skilled workers as strongly as Gen Z. They also create new options for themselves by matching and mixing various, existing components and views that appeal to them. There is transparency across the industries and opportunities that have never been there before (Tulgan, B., 2013).

“The fact that some are still in their post-toddler years […] makes it difficult for marketers trying to distill their generational essence (Williams, A., 2015).” Dramatic shifts, negative and positive, in attitudes, lifestyles, and behaviors in comparison to previous generations are shown in recent research papers. The effects of those characteristics are not predictable. Therefore, the tracking of Gen Z is of significant importance. Since there is a wide range of areas of life that are touched by Gen Z’s characteristics and demands, this study focuses exclusively on the impact on New York City’s labor market.

Purpose Statement

Businesses and industries in New York City (NYC) are not prepared for Gen Z. Today’s companies have to find a different approach to how to attract, recruit, and keep Gen Z. They have to figure out a different way to manage the work environment, and how to set up the workspace differently than Baby Boomers or the previous generation Y (Stahl, A., 2018).

Research Question and Objective

The study examines how Gen Z’s demands impact the future of NYC’s labor market. It will define development of NYC’s economy based on Gen Z’s digital affinity on the work environment, developments in regards to the work flexibility, and developments that appear due to the Zers’ entrepreneurial spirit. The trends will subsequently affect New York City’s work environment of today, the structure of the industrial cluster, and the structure, which is shaped by industry giants, of how we operate today.

Hypothesis

The main objective of this study is to examine whether Gen Z’s demands will impact the labor market in NYC. Further, if it does, how will Generation Z impact the way this economy functions. The study also examines which industries and how they would be affected.

The survey will answer the following research questions.

1) Digital affinity: How will Gen Z’s constant online presence affect the way of how we work? Gen Z is the digital native-generation and knows better than any other generation how to handle the internet, technology, and social media. Their brains are even wired in different ways than the brains from the previous generations to process the countless information they are confronted with every day. This study will investigate how their savvy use of the internet and social media will create unique ways of doing business that have never been thought of yet.
2) Work flexibility: How will Gen Z influence the traditional work system? The number of 9-to-5 jobs is declining, and the number of freelancers and remote jobs is increasing. This revelation leads to the question of how does Gen Z’s entrepreneurial spirit affect these two industries, 9-to-5 economy and freelancing, or ‘gig’, economy. Further, it investigates future ways of making money.
3) Entrepreneurial Spirit: How will Gen Z’s entrepreneurial spirit affect the American workaday world? The Do-It-Yourself (DIY) education, the pursuing of multiple careers, and the pursuing freedom lead to the next research question. Gen Z will create innovations and businesses that are likely to disrupt large corporations and whole industries. The generation’s social responsibility and fight for better human rights can be supportive. The question is: how will new businesses founded and how will they affect the industrial cluster?

Definition of Terms

Generation Z, also called the iGeneration, Homelanders, and Digital Natives, is the generation that was born between 1997 and 2012 (today’s 7 to 21-year old) (Dimock, M., 2019).

Ethical Consideration

Theoretically, Generation Z could change the way how workers in NYC work today. The city is the capital of finance of the United States. The impact of the disruption of the working system is not calculable, but it can be assumed that it will have a tremendous effect on the economy in the country. Further, impacts on the social and the political system are sequels of Gen Z’s demands on the labor market.

Delimitations

Most of the data is obtained are collected from New York City and the members of the Generation Z that work in this city. All findings thus are only applicable to this city, this generation and this year. It can eventually be applied to one to two of the following years. Technological, social, and political developments are fast-moving and will consequently change the outcome of this research.

Limitations

However, this study is limited in its results as it is uncertain if the results will take place because it is difficult to predict the future. It is also difficult to replace a traditional working system that is in place now and has been for a very long time. Further, the research results rely heavily on the answers of survey participants which can be answered in an untruthful way.

Significance of the Study

The contribution of the study is to research and identify developments in NYC’s labor market that result from Generation Z’s demands. It will contribute to the alignment of economies and businesses in NYC to integrate Zers in the labor market.

Literature Review

Generation Z

The term Generation Z applies to individuals that were born between 1997 and 2012, today’s 7- to 22-years old, and after millennials. These years should be viewed as tools to analyze this generation. iGeneration, Homelanders, Post-Millennials, Digital Natives (Williams, A., 2015) etc. are other terms used to describe this generation (Dimock, M., 2019). They currently represent a quarter of America’s population, and the segment is still growing (Sparks & Honey, 2014).

The iPhone was launched in 2007 when the oldest Gen Z members were 10. This is the first generation that was born and raised in the era of smartphones and in an ‘always connected’ technological environment (Dimock, M., 2019 & Williams, A., 2015). Constant connectivity, on-demand entertainment, and social media are primarily assumed. This environment leads to dramatic shifts, positive and concerning, in attitudes, behaviors, and lifestyles, which will impact adulthood in a way that the research does not know yet. Further formations are expected as Generation Z ages and as global and national events happen (Dimock, M., 2019).

The two most important formative influences are the technological revolution on a macro level and the helicopter parenting revolution on a micro level for the Gen Z in the United States (Tulgan, B., 2013). “Their natural habitat is one of physical atomization and relative inactivity, but total continuous connectivity and communication (Tulgan, B., 2013).”

Technology. The technology had accelerated when the first Gen Z was born. Tech integration, wireless internet ubiquity, and the rise of handheld devices had all taken place. Zers are fully connected to each other and omniscient to any question at any time. They grew up in a world with no ‘borders’ (Tulgan, B., 2013). The virtual world is natural for Zers, but an online life does not fit into offline life. There is a gap between desire and reality. Uncertainty, anxiety, and disappointment are being felt (Bencsik, A. & Juhász, T., 2016).

They have perfected the ultimate usage of the phone – creating documents, posting photos on social media, and talking on the phone. Looking up information instantaneously results in the loss of interests the same second. Communication in the digital world is limited to emojis, abbreviations, and only a few words (Williams, A., 2015). Gen Z leaves room for interpretation and imprecise communication (Sparks & Honey, 2014).

Constant access to technology, screens, and information has led to ‘snack media’ culture. Zers communicate in bite sizes, process information at faster speeds, and are nimbler to handle larger mental challenges. The challenge is to get and keep their attention. It is speculated that Gen Z is overly reliant on their devices. They are oblivious, lack situational awareness, and are unable to give directions (Sparks & Honey, 2014). The brains of Gen Z are sophisticated, complex visual imagery and are structurally different than those of earlier generations. That allows them to be better in multi-tasking, ‘task switch’. (Rothman, D., 2014).

Zers are early adopters. They expect connectivity anywhere they go and get impatient when the world lags (Virtual Critical, 2019).

Parental influence and Parenting. The helicopter parenting phenomenon has increased qualitatively and accelerated dramatically over the past decades. The parenting focus of the Baby Boomer generation was on self-esteem shifted to safety and cultivation performed by the Generation X that are parents to most of the members of Gen Z (Tulgan, B., 2013). Generation X is a small and different generation that grew up in a time of post-Watergate and post-Vietnam when things seem limited (Williams, A., 2015).

The highly engaged parenting has resulted in Gen Z growing up too fast and never growing up at all. On the one hand, the access to information, images, ideas, and sounds through the technological progress was ‘dangerous’ from a very young age for Gen Z and pushed them into a ‘privy’ situation. On the other hand, this generation is isolated and “scheduled to a degree that children never have been”. They enjoy being discoursed about protection and direction by parents, teachers, and counselors. Gen Z’s parents are characterized by a soft touch that ensures total care without even having a job as a teenager (Tulgan, B., 2013).

However, parents of Gen Z encourage their children to find jobs early and independently without their help. They have been given more space by their parents than Millennials in regard to accessing information on the internet. Consequently, they are more self-directed (Sparks & Honey, 2014).

Political. Zers were born during the Great Recession, global warming issues, cloud computing, the hurricanes Sandy and Katrina, the wars in Iraq and Afghanistan, and the 9/11 attacks (Rothman, D., 2014). They were developing their life skills and personalities in a socio-economic environment marked by uncertainty, volatility, chaos, and complexity. The generation developed certain resourcefulness and coping mechanisms. Further, they witness the struggles of Millennials which have resolved to do and to think differently. Currently, they are experiencing the war on terror and the war on climate change (Sparks & Honey, 2014).

Economic. Affected by the time of hardship, global conflict, and economic troubles, Gen Z focuses on safe careers and is more pragmatic than optimistic (Williams, A., 2015). Gen Z witnesses start-up companies that became popular via social media. Hence, they are not interested in working in a regular job. They want to make their own business because of the success of the few lucky entrepreneurs. The Sparks & Honey report ‘Meet Generation Z: Forget Everything You Learned About Millennials’ states that entrepreneurship is in Zers’ DNA (Williams, A., 2015). Social entrepreneurship is one of the most popular entrepreneur paths. They aim to make it better (Sparks & Honey, 2014). 61 % of high school students prefer being an entrepreneur rather than an employee, and 72 % of high school students aim to start their own business someday (Sparks & Honey, 2014).

Financially. Gen Z’s driver is financially savvy. They are saving up money and have learned from the parents the value of money at a young age. Handling this financial weight, Zers are concerned for their future (Sparks & Honey, 2015). Gen Z uses mobile payment and digital bank transactions the most of all generations (Vision Critical, 2019).

Globally and Locally. Gen Z has a global mindset and knows more about the global system than the previous generation ever did. They are less geographically adventurous and can be more engaged in the local community due to the technological connection (Tulgan, B., 2013).

However, their social circles are global (Sparks & Honey, 2014). Gen Z sees itself as a global village, but they want to be both globally and locally rooted. Traveling is a need and lets them feel complete (Virtual Critical, 2019).

Socially & Diversity. Gen Z does not know a world where you are not connected with anyone anywhere at any time. They are also well aware of their ability to leverage this connectivity (Tulgan, B., 2013). Zers partially create their relationships from social media platforms such as Tumblr, Instagram, and Facebook (Williams, A., 2015).

Gen Z’s mindset is a new way of thinking about diversity and difference. Mixing and matching various components of identity and points of view rather than categorizing leads to a creation of self-hood options and new personal beings (Tulgan, B., 2013).

This generation has experienced demographic shift and a cultural shift and becomes more multicultural. The number of biracial children has risen the three digit which also presents the fastest growing youth group in the United States. Multiracial children are characterized as high-achievers, have a strong self-sense, and have an adaptability to change (Sparks & Honey, 2014). Same-sex marriages, gender-neutral, and having an African-American president are a fact of life Williams, A., 2015. Gen Z is “less attached to traditional gender binaries or linear definitions of sexuality (Williams, A., 2015).” This generation will be the last generation that has a white majority according to a Vision Critical research (2019).

Gen Zers have respect and greater affinity for the elderly and are sharers due to their childhood in multi-generational household (Sparks & Honey, 2014).

Privacy. Zers are aware of privacy issues and their personal brand. They have experienced how other generations screwed up. They embrace anonymity on social media platforms like Secret, Whisper, and Snapchat where images and videos disappear instantly (Williams, A., 2015).

According to the Saeculum Research, there are parallels to the Silent Generations, people in their 70s and 80s, that were shaped by Depression and the war, and characterized as diligent. Gen Z experienced a recession, a time where jobs were hard to get, a private society on social media, and a non-risk-taking culture. However, both generations are more than career-focused, they are entrepreneurial and the richest. (Williams, A., 2015).

Socially Conscious. Gen Z is determined to ‘make a difference’ and ‘make an impact’. They are concerned about humankind’s impact on the planet. They are also savers, non-drinkers, and non-smokers (Sparks & Honey, 2014).

Zers are less passionate about the environmental issues than Millennials, but they are more likely to defend human and LGBTQ rights, immigration, race relations, poverty, gender, and racial equality by using their mobile connectedness (Vision Critical, 2019).

The following chapter states what are Gen Z’s work values, their work preferences and how its education has prepared the generation for its future.

Work Values

Generation Z is the latest group of new young workers that are entering the American workplace. Today’s 22-year-olds currently represent 30 million of the American workforce, which are 20 % of the whole. This number will go up to roughly 60 million when the entire Gen Z has entered the workaday world which will be 20 % of the U.S. population (Sparks & Honey, 2015) and represent 40 % of the workforce – assuming they enter the workforce - according to Susan Weber-Stoger, a New York demographer (Williams, A., 2015). Generation Z’s impact on how we work will, therefore, increase dramatically over the few next years.

“Generation Z will present profound challenges to leaders, managers, supervisors, hr leaders, and educators in every sector of the workforce (Tulgan, B., 2013).”

Gen Z joins a workforce that has been shaped by a decade of war and economic uncertainty. They fear the short-term and question the long-term perspective, which results in lower expectations, cautious confidence, and relatively modest demands. Gen Z thinks about their economic future more than when Baby Boomers were children, and they were the post-world war generation (Tulgan, B., 2013).

According to Virtual Critical (2019), the most crucial factor at work is the salary. Zers want to make a difference and have an impact on their careers. Further, they expect to achieve the position of the vice president or higher and have expectations for themselves and their employees.

According to the Sparks & Honey report (2014), Gen Z was raised in an American education system that focused on classroom diversity and mainstreaming. As a result, they view everyone as equal at winning and losing and are collaborative team players. They feel pressured at a very early age to gain professional experience.

Further, they are surrounded by online DIY education and use social media as a research tool. “75 % of teens say there are ways of getting good education other than by going to college” (Sparks & Honey, 2015). The traditional path, known as a summer job, school, and then college, does not apply any longer. The traditional educational structure does not define Zers’ learning path. It is a desire for new ways to learn (Sparks & Honey, 2015). Due to their technological connection, their language knowledge is high level (Bencsik, A. & Juhász, T., 2016).

Gen Z learns in high school how to start and run a business and learn about money and banking (Sparks & Honey, 2014).

The following chapter describes how the workplace and the work environment needs to be set up for Zers. Further, it presents key strategies on how to collaborate with Gen Zers and how to face the growing skill gap in this generation.

Workplace and Work Environment

Managing the Gen Z at the workplace means mastering and controlling the tools of social media. The usage of social media during the recruitment, onboarding, training, performance management, and knowledge transfer processes is essential. Social Media is the requirement to supervise and to participate in Gen Z’s work environment. Further, a manager of a team with Zers requires a broad transferable skillset such as interpersonal communication, critical thinking, technical training, and work habits. Gen Z is less likely to resist authority relationships and shows only a high performance for individuals when they are intensely engaged in the working relationship (Tulgan, B., 2013). It is necessary to cooperate with different generations and to trust and to share knowledge (Bencsik, A. & Juhász, T., 2016).

According to Tulgan (2013), the best way to build a high-intense relationship with Gen Z at the workplace is to work in small highly-defined groups with a strong peer leader. It also requires a well-defined and observed chain of commands. Further, the management needs to be in a customer service style and the teaching style has to be leading. The challenge is to keep Zers interested, motivated, and even focused on the small details (Rothman, D., 2014).

Gen Z is facing an already huge and still growing skill gap between highly-skilled, especially in the technical field, and unskilled workers. The non-technical skill gap is even larger and faster-growing. There will be a growing group of elitist professionals among the emerging workforce that has an exceptional technical skillset as well as high-developed interpersonal skills and the benefit of development opportunities. Retaining the elitist professionals requires a reward system and an increasing differentiation as a company (Tulgan, B., 2013).

According to Tulgan (2013), to overcome the growing non-technical skill gap, it is essential to implement a culture of continuing re-education. This entails the education of basics such as problem-solving, time management, personal responsibility, and interpersonal communication. The investment in building a workplace culture that represents behavioral norms is essential for a productive working relationship across the various generations. Additionally, to attract highly-educated Zers, it is required to create ‘dream jobs’ which entail tremendous work conditions, rewards, and flexibility. The company’s goal is to maintain a long-term working relationship.

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