Gen Zers Aren’t Going to College. Here’s What That Means for Banks.

Gen Zers are increasingly forgoing four-year degrees in favor of blue collar jobs like construction work. If banks want to grow their business among the youngest cohort of American workers, they’ll have to change up their marketing and business strategies.

Gen Z is forgoing 4-year college degrees — and that could have long-term impacts on financial institutions.

The number of students enrolled in vocation-focused community colleges rose 16% last year, according to data from the National Student Clearinghouse. This is the highest number reported by the institution since it started tracking this data in 2018.

Gen Z, the youngest cohort of American workers, has been vocal about their skepticism surrounding the value of a college degree. For many, this means pursuing careers in high-paying trades like plumbing or construction. The number of Americans who report working in construction, for example, has increased steadily since 2020, according to economic data from the Federal Reserve. This poses a unique challenge for community banks and credit unions, which are already having a difficult time recruiting Gen Zers as customers and employees.

“With the expense of college, a lot of my peers are reevaluating whether that expense is worth it,” says Emily Osburn, a Gen Zer and consultant at Cornerstone Advisors. “Gen Z is very money motivated.”

Gen Zers will make up about 27% of the global workforce by 2025, according to a report from EY, and that’s only slated to increase over time. If community banks and credit unions want to remain relevant, they’ll have to change up some of their current marketing and business strategies.

“There’s an opportunity for them to dig in deep,” says Amanda Swanson, senior director in the Delivery Channels practice at Cornerstone Advisors. “I think there’s an opportunity for them to improve and be creative around it.”

Hire More Gen Zers for Jobs

The first step to growing a marketing strategy for any generation is to ensure those individuals are represented on your staff. Community banks and credit unions in particular are still struggling to recruit Gen Z workers, many of whom are distrustful of financial institutions. Attracting Gen Zers may require some radical overhaul to the culture at small banks, according to a report from EY.

Gen Zers want flexibility and an opportunity to work somewhere that gives them purpose, says Joe Camberato, CEO and founder of National Business Capital, a fintech company that provides business loans. Diversity, equity, and inclusion is also important for younger workers. If financial institutions want to recruit and hire more Gen Zers, Camberato says, they have to keep all of this top of mind.

“We’re very big with culture and creating a good office environment and growth opportunities,” he says. “Gen Zers want a place they’re going to work at that has purpose. They want to be in a fun growing environment.”

Read more about Gen Z banking habits:

Community banks and credit unions should tap the local community to hire more Gen Zers, Osburn says. For example, attending job fairs at local universities or sponsoring community events, can be a good way to get your name out there.

“That’s a good opportunity for local credit unions and banks to go to these career fairs, meet students and connect with them,” Osburn says.

Remember: one of the best marketing tools you can have is your staff, Swanson says. By promoting work done by Gen Z staff, you can attract more younger customers, who see themselves in your marketing materials and in your branches.

“Marketing should be working arm in arm with HR,” she says. “Marketing can also help resonate that brand, who they’re looking for — but also how they communicate.”

Tailor Marketing Materials for Blue-Collar Workers and Entrepreneurs

Community banks and credit unions hoping to capture business from Gen Zers should consider developing tailored marketing materials specifically for these workers. Owners Bank, a digital bank that is a division of Liberty Bank, is a good example of a bank that markets specifically to individuals who own small businesses, Swanson says.

“They’re actually going after more of that trade side of the house. They’re speaking in the language that they’re going to understand,” she says. The bank uses images of tradesmen and entrepreneurs on its website to make clear who its services are for.

“We created Owners Bank specifically to meet the evolving needs of business owners. “To be the financial partner for the hardworking, lunch-skipping, midnight oil-burning backbone of this country,” the bank’s marketing materials read. “We know what you want from a bank, so that’s what we built. All business. No BS.”

Learn more about Owners Bank and their innovation.

Community banks should consider providing educational materials around the tools that blue collar business owners may be interested in, Swanson says. For example, a new business owner may be curious about setting up a checking account specifically for a small business, or they may be interested in independently saving for retirement.

Gen Zers are also more likely to have side hustles or part-time freelance gigs on top of their full-time job, Osburn says. Offering tools like tax support for 1099 workers or early-wage access could be helpful for Gen Zers who are building a side gig.

“Gen Z is very entrepreneurial. They’re doing an e-commerce thing on the side. They’re making decent money from that. That’s all on top of a normal 9-5,” Osburn says. “Some of the biggest things are offering products they would want.”

Use Data to Better Understand Your Customer Base

Banks have access to important spending data that they can use to tailor marketing strategies for younger workers, Osburn says. Spending and deposit data, specifically, can be useful for markets who want to understand what products might be the most useful for a specific demographic.

“This is my first job out of college, they’ve definitely seen an increase in the amount of direct deposits,” Osburn says. “Can they say, ‘Hey, I see you got a new job, let’s talk about how you can start saving for retirement, or invest your money with us.’ Stuff like that would be great.”

“Gen Z is very entrepreneurial. They’re doing an e-commerce thing on the side. They’re making decent money from that. That’s all on top of a normal 9-5.”

— Emily Osburn

Instead of focusing on product marketing alone, marketers should provide thought leadership and educational tools that can help teach younger generations about the services they offer. Internal data about customer spending, saving, and investing habits can help to tailor these materials to the needs of the specific demographic banks and credit unions are trying to reach.

Gen Z wants to feel connected to the brands they buy from, Swanson says. Finances are an emotional subject for any generation, and the more small banks and credit unions can tap into these conversations, the more successful they will be with Gen Z.

“Being able to provide that financial education awareness that would set them apart,” Swanson says. “You’re drawing on that connection. Finances are such an emotional piece of it.”

Caroline Hroncich is a freelance business journalist based in New York. She writes about workplace trends, HR, personal finance, banking, and more. Her work has appeared in MarketWatch, Business Insider, Employee Benefit News, the Society for Human Resource Management, and Cannabis Wire.

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