Financial Institutions Must Prepare for a Gen Z Workforce Now

By 2020, Gen Z will be a major factor in the workplace. These workers are far different from their predecessors, already comfortable with digital technologies, yet unsure of how they fit into organizations that have not kept pace with their expectations. Bank and credit union leaders must find ways to stimulate and satisfy this important segment as part of the digital transformation process.

Generation Z, roughly defined as people born during or after 1997, represents a very significant workforce change. This generation is comfortable with new technologies, bringing new skills, high expectations and a desire to shake things up. As this group matures, a flood of technology-savvy talent will enter the banking industry, able to supplement or complement a less tech-savvy workforce.

The challenge and potential of the Gen Z worker is unlike anything the banking industry has experienced in the past. While Millennials helped the banking industry understand and deploy new digital technologies, Gen Z workers have never known anything but digital technology. Gen Z workers don’t want to have to digitally transform banks or any other employer — they want new digital technologies and automated solutions already in place.

The Gen Z worker wants insights available in real time to make decisions or to build new solutions seamlessly. They expect immediate reinforcement of their efforts as opposed to the traditional monthly, quarterly or annual feedback and they expect AI and data analytic solutions to be in place or in process.

The good news, according to Dell Technologies, is that 77% of this generation is willing to be technology mentors to others in the organization. The challenge is that this generation is less confident that they have the non-tech skills needed by employers.

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Characteristics of the Gen Z Workforce

The future workplace is quickly becoming an environment of human-machine partnerships. Over time, Gen Z will become a prominent component of this new environment. According to the Bureau of Labor Statistics, while Gen Z made up just 1% of the U.S. workforce in 2015, they will represent close to 20% of the workforce by 2025 … just 5 years from now.

Changing mix of workforce generations in United States

This generation grew up with smart devices, and are very adept at digital games and apps that most predecessors struggled with. In fact, according to 2017 Nielsen data, almost 73% of people aged 2 to 20 have video game consoles. In a world where 85% of jobs that will exist in 2030 haven’t been created yet, the skills of the Gen Z worker will be more and more in demand.

One of the biggest differences with the Gen Z workforce is the definition of what a business or career actually is. Today, the potential for a single-person business has never been greater. In some instances, there is not even a ‘product’ other than being an ‘influencer’ — adept in social media and building relationships online. The result is more entrepreneurial workers, who are highly competitive and thrive by pushing themselves independently.

Despite this apparent desire for independence, the top three must-haves for first jobs among this age group are health insurance, a competitive salary, and a boss they respect, according to Monster. Also, while access to multiple technology solutions and devices to get their work done is expected, Gen Z employees value face-to-face communication more than their Millennial counterparts.

The new high-tech workplace will also need new ways to train employees since the skills required will evolve more quickly than in the past. Unlike previous generations that learned through textbooks in a formal setting, education for future generations won’t end with a diploma (assuming formal education is even a prerequisite).

Ongoing self-development and immersive training will become a more commonplace requirement, with an immediate feedback loop around performance being key. According to Dell, “One of the biggest challenges will be developing a framework that’s nimble enough to adapt to an as-of-yet-undefined technology ecosystem.”

This is okay because Gen Z workers tend to be quick learners and crave information — they don’t need much hand-holding or coddling in this respect. They want to actively learn and enable themselves to achieve better salaries so they can solidify their financial futures.

Beyond internal training options, other ways to stimulate learning include tuition reimbursement, free mentoring opportunities, online non-credit courses, and even YouTube-like informative videos on job opportunities or industry-related issues.

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Gen Z and the Innovation Imperative

To stimulate the Gen Z employee of the future, banks and credit unions will need to create a culture of testing, experimentation and innovation. Unlike banking industry employees of the past, who enjoyed the stability and inherent lack of major changes, the Gen Z worker wants to share ideas and have an impact through innovation and change.

According to Edelman Digital, “A ‘digital suggestion box’ needs to be backed up with a real commitment from the top to examine new ideas seriously and put money into the practice of helping people do their jobs.” Just as importantly, the Gen Z worker wants to be able to share (financially) in the positive impact of their ideas.

Another difference between Gen Z and previous workforce generations is that they want managers to include them as problem-solvers in everything from day-to-day operations to overall product portfolio changes. In other words, this generation should be the biggest advocates for future change, serving as internal consultants in an increasingly high-tech world.

Financial institutions can’t expect to entice the future Gen Z worker with game tables and casual Fridays. To compete against Amazon, Google or any new tech firm, banks and credit unions must foster collaboration, connection, and community while also supporting ongoing learning opportunities.

But the challenges are worth it. According to Edelman Digital, “Embracing Gen Z and fully integrating them into the organization will have multiple benefits. This generation will push your organization to use technology more efficiently, bring innovative approaches to problems, and challenge the organization to act more accountable.”

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