By Brittany N. Cox
Registered Investment Advisor at Nestlerode & Loy Investment Advisors
I’ve found myself in many conversations and listening to a few presentations recently about millennials in the workforce. Currently, the working population is very diverse with four generations of Americans working and another set to enter the workforce in the next year.
There are still some of the Silent Generation (born between 1925 and 1946) working. Many Baby Boomers (born between 1947 and 1964) are deep in their careers. And there are Generation X (born between 1965 and 1980), and the Millennials (born between 1980 and 1996), who are now into their 30s and most well into their careers.
It seems that the term millennial is sticking around and when you hear it, you might think of college students eating avocado toast and holding a smartphone. However, the oldest of the millennials are now in their late 30s. Most of them are well into adulthood and moving into management roles at their jobs. The generation in college and entering the workforce right now is Generation Z (born after 1996). They account for approximately 61 million people in the U.S., which is larger than the millennial generation and about two thirds the size of the Baby Boomer generation.
The Pew Research Center has now turned their focus to Generation Z after nearly a decade of research focused on the millennial generation. Many studies find that this generation could change the workforce and the way we all work together because this is a generation of people who have never lived without a smartphone in their hand. They have always used a laptop computer to do their schoolwork. As a result of this change of generation entering the workforce, companies may need to adjust their tactics for hiring and retaining employees.
According to the Center for Generational Kinetics, which has extensively studied this segment of the population, these individuals have a great desire to work hard and learn. The other good news is that this generation seems to be very focused on their financial futures. According to the center’s founder, Denise Villa, “These ‘Gen Zers’ have seen their parents struggle financially [due to the recession and student loan crisis], so parents are having conversations about finances, money and debt with kids earlier. They’re having conversations older generations never really had before.”
Thirty five percent of participants in a recent survey by the center said they plan to start saving for retirement in their 20s. Twelve percent of those participants say they’ve already started saving. You must keep in mind that the participants of this survey are still teens.
Another survey by the National Society of High School Scholars shows that Generation Z is saving more money than any generation before them. They see the struggle of the past generations whom have accumulated $1.4 trillion in student loan debt and are more focused on saving earlier to pay as they go. They also state they would like to attend the right school instead of the best school they can get into. Only 11 percent of individuals who are part of Gen Z said they would take on debt to cover college costs and more than half of them aren’t even considering higher education and plan to enter directly into the workforce after high school. However, employers will still have to adjust to hiring this generation as their values are not solely focused on money. This is a technology-focused generation who look at reviews online, company branding and marketing, and the diversity of the company comes in at the top of the priority list as these individuals are looking for jobs.
I see these characteristics in my own sister, who is 18-years-old and a freshman at Penn State Altoona. She started into the workforce at age 16 and loves saving money. There was a point in time over the summer that she was working three jobs during high school and started her first semester of college with two jobs. This generation is focused on their financial future and securing the things they want without the debt that often comes with the reward.
With this information, employers can be more prepared for the incoming generation of workers to hire and retain quality employees. Of course, if you have teens in your life, talk to them about money. You could be surprised on their outlook. Some things to consider teaching your teens that are not taught in school are writing a check, balancing a checkbook, and the basic account types like a checking and savings account.