Reconomy, a leading supplier of sustainable waste management solutions, explores how the younger generations are influencing businesses to be more environmentally conscious and how businesses can lead the way for a brighter tomorrow.
What does Gen Z think?
The increasing interest in sustainability has created a space for young people to campaign for continued action against climate change. And thanks to the powerhouse voices of Greta Thunberg, Vanessa Nakate, and Mya-Rose Craig, Gen Z has become the generation of sustainable activists.
According to a survey by Bupa, 63% of Gen Z and millennial respondents reported feeling the burden of climate change, compared to only 37% of Gen X and 28% of baby boomers. This could be a result of powerful media coverage that has raised awareness of the damage being caused by our behaviour. Firstly, Blue Planet in 2017, then the WWF advert ‘Fight for Your World’, which resonated deeply with many, stating that this is the first generation to know that we are destroying the world and the last to do anything about it.
These values have gone on to influence the individual behaviours of older generations. And, according to a survey conducted by Deloitte, 39% of adults reduced the number of new goods they bought between 2020-2021 as a result of the values of Gen Z and millennials.
How has this affected businesses?
Individual behaviours cannot be solely responsible for reversing the negative effects of global warming. As a result, people are looking beyond individual factors by holding businesses and governments responsible for national and global carbon footprints.
34% actively chose to buy from sustainable brands between 2020-2021. But how do consumers know which brands are sustainable?
Marketing campaigns can be utilised to showcase sustainable products or services. This presents brands as desirable to Gen Z and millennials. However, actions speak louder than words, and delivering results is proving to be just as important as marketing. Sustainability within businesses is itself changing. The commercial landscape for companies is evolving and moving away from a consumptive capitalism approach towards a more regenerative form. Businesses that fail to adapt are likely to face extinction.
The shift in consumer behaviours has also encouraged the growth of the green economy, which was reportedly worth £205.76 billion in 2021. This includes over 75,000 low-carbon businesses, such as recycling plants and wind turbine manufacturers, that prioritise the environment and employ over 1.2 million people across the nation.
How can businesses tackle climate change?
More often than not, businesses are taking steps to become more sustainable. On the other hand, sometimes companies are stuck on a transitional path, stalled by individual cost centres that are preventing holistic decision-making.
This can often lead to departments making polarising decisions based on the way that their business runs. In these circumstances, companies fail to recognise the full scope of their resource cycle and all of the benefits that come with having a varied approach.
To achieve meaningful progress, businesses should successfully implement sustainable waste management solutions into their culture, structure, and strategy. This might not be implemented straight away for some, although from a procurement perspective, they should be able to make decisions that have a lasting impact on the entire organisation.
This has been a challenge for some businesses until recently, as each unit would procure for their own requirement, and there were not as many comprehensive solutions that could consider the whole resource cycle.
Overall, there’s no doubt that sustainability is taking centre stage. Baby boomers and millennials have paved the way for Gen Z to campaign for current concerns surrounding the speed of climate change. In turn, businesses are being held accountable for their actions, fuelling hope for a future free from the negative effects of global warming.
Sources
https://internetretailing.net/sustainability/sustainability/a-third-of-uk-shoppers-demand-greener-products--and-will-pay-more-for-them-22190
https://www.glamourmagazine.co.uk/gallery/gen-z-climate-activists
https://www.bupa.com/news/press-releases/2022/gen-z-seek-ethical-workplaces-as-environ-mental-health-burden-bites
https://www2.deloitte.com/uk/en/pages/press-releases/articles/four-out-of-five-uk-consumers-adopt-more-sustainable-lifestyle-choices-during-covid-19-pandemic.html
https://www.prca.org.uk/Reaching-Millennials-and-Generation-Z-with-Purpose
https://www.bbc.com/future/article/20211105-how-carbon-might-go-out-of-fashion
https://www.theguardian.com/business/2022/jan/14/dirty-greenwashing-watchdog-targets-fashion-brands-over-misleading-claims
https://www.theguardian.com/environment/2021/aug/10/uks-green-economy-four-times-larger-than-manufacturing-sector-says-report
https://www.countryandtownhouse.com/travel/does-carbon-offsetting-actually-work/
The pandemic has been the catalyst for the world becoming increasingly cashless and in recent years, increasing numbers of young people have been using “buy now pay later” platforms, been subjected to crypto scams and exposed to financial misinformation on social media. These threats are inherently unique to Gen Z and didn’t exist ten years ago.
In order to help combat these risks and support and equip young people with the knowledge and skills necessary to build a healthy relationship with money, we need to make conversations about money and finances more real, relatable and practical.
Teaching young people financial literacy has the potential to empower them, giving them greater financial security and confidence and improving social mobility. With research suggesting that 67% of young people do not feel confident planning their financial future, this has never been more important.
Here are 5 top financial tips for Gen Z:
1. Be careful when using money lending platforms
Over the last few years, money lending platforms have become increasingly prominent, being an available payment option on most online retailers. These platforms make it considerably easier for young people to fall into debt without realising it, as they can use them as the default payment when making purchases from a wide variety of online stores. Unlike normal purchases, “buy now pay later” schemes enable young people to impulse-buy without having the upfront funds needed – this can lead to unsustainable debt and risks impacting young people's future credit scores. If young people aren’t careful they can get trapped in a cycle of buying items they can’t afford.
When it comes to money, being able to manage it well is part of a healthy lifestyle. Many of us can be tempted to make impulse purchases, especially when access to “buy now pay later” schemes is so easily available, but it’s really important to have a plan to pay off the debt. It’s also worth setting yourself spending limits so you only buy what you can afford to pay back.
2. Use discounts
As the cost of living rises, discounts have never been more important for young people – yet many don’t use them to their advantage. Numerous high street brands offer student concessions through platforms such as UNiDAYS. When buying your next pair of trainers you should use these websites to save you money.
3. Keep learning
It’s important to familiarise yourself with financial terms and to increase your knowledge of financial products and services, such as pensions, savings accounts and investments. There are many ways in which you can do this, such as through online learning, or by following personal finance influencers on TikTok, YouTube or Instagram. But don’t forget, it’s really important that you do your own research – if an offer for cryptocurrency sounds too good to be true, it probably is. And consider whether the ad featuring a celebrity influencer that’s encouraging you to invest your money is real or if it’s been faked.
4. Budgeting
Whilst it sounds obvious, saving and setting a budget have never been more important. However, whilst it can be hard to keep track of your spending, there are numerous apps which are great and do the hard work for you. Nowadays, many mobile banks highlight your spending patterns, meaning you can work out where you need to be more frugal to save money over the year. Budgeting is also great as it takes away any element of surprise (for example the pandemic, recessions etc), helps you plan ahead, and gives peace of mind regarding your finances, helping to reduce anxiety.
5. Use comparison sites
Customer loyalty doesn’t always save you money. But there are some great deals from providers if you are willing to search for them. By using comparison sites you can save money on everything from energy bills to phone contracts. A little time spent researching could save you significant money and stop you from overpaying on bills.
About the author: Sharon Davies is CEO of Young Enterprise, a national financial and enterprise education charity that helps young people learn to earn and look after their money. Learn more at www.young-enterprise.org.uk.
Stuart Lane, CEO at Trade Nation, shares his findings on the trading habits of millennial and Gen Z investors and how they have been influenced by emerging trading platforms.
There’s been a surge in trading interest among the whole population since the start of the coronavirus pandemic, but especially so in millennials and Gen Zs. A survey by E*Trade Financial Corp found that over half of younger investors have traded more frequently, and while many have made notable gains, there have also been some serious losses.
Roughly 46% of millennials and Gen Zs are trading derivatives more frequently — double the average rate. What’s more, 51% say their risk tolerance has increased. This makes for a potentially dangerous combination, especially for amateurs, of whom there are plenty. Robinhood (by far the most popular trading app of millennials and Gen Zs) has said almost half of its new customers this year are first-time traders who, therefore, may not know the risks surrounding complex derivatives such as CFDs. As Trade Nation notes: “CFD trading certainly isn’t straightforward and there’s a lot of confusing terminology and hidden costs involved too. This means it usually isn’t the best way for traders to kick off their journey.”
And in addition to the risks individual traders may be opening themselves up to, experts like Princeton economist Burton G. Malkiel believe that the outlandish trading activities of millennials and Gen Zs are also wreaking havoc on the financial markets.
Why are young people trading more?
The general consensus is that trading has been a great way for the younger generations to fill extra time and deal with the boredom of lockdown. As the founder of RagingBull, Jeff Bishop, told CNBC: “A lot of people are at home and have got more time on their hands. And many, unfortunately, have lost their jobs and are looking for new opportunities. Younger investors are looking for ways to recoup their money.” Furthermore, many Americans have been able to fund their trading activities with their government stimulus checks, with software and data aggregation company Envestnet Yodlee reporting that trading was among the most common uses for the checks in almost every income bracket.
There’s been a surge in trading interest among the whole population since the start of the coronavirus pandemic, but especially so in millennials and Gen Zs.
Apps like Robinhood, eToro and RagingBull have also made trading more accessible for these traders, seeing demand for their services rise by 300%, 220% and 158% in the first quarter of 2020, respectively. And given that the vast majority of millennials and Gen Zs have been using their smartphones more due to the coronavirus outbreak, it’s unsurprising that the time spent on apps like these has also increased.
What are millennials and Gen Zs trading?
The E*Trade survey found that almost half of young investors are trading derivatives more frequently compared to 22% of the general population, while there’s been an especially sharp increase in options trading. What’s more, the surprising nature of their most popular stock picks have stunned, and perhaps even humbled, many Wall Street investors.
"We see a lot of buying activity of specific industries that were impacted by the pandemic," said Robinhood co-founder Vladimir Tenev, as reported by CNN. He singled out shares of airlines, videoconferencing and streaming media companies, and biopharmaceuticals. For example, even though Warren Buffet dumped his airline shares in light of the coronavirus travel restrictions, millennial and Gen Z traders had faith in a recovery. Frank Holmes, CEO of US Global Investors, told CNN that he noticed a surge in interest for the JETS airline ETF in March. Examining Robinhood trends, he learned that plenty of young investors had been buying it after a major dip. The funds' assets went from $34.6 million at the start of March to $615 million by the end of April — a 1600% increase.
“Although a lot of people may say that it’s crazy, it has turned out pretty well,” JJ Kinahan, the chief market strategist at TD Ameritrade, told Bloomberg. “Retail investors for the last few months have been a little bit ahead of the curve. There’s been a lot more perhaps optimism among retail traders around the turnaround than there has been from professionals. This continues to show that.” However, it’s inconclusive whether moves like this are really paying off for younger traders. While some analysts (such as those at Goldman Sachs) claim the stocks of Robinhood investors have outperformed hedge funds and the indices, others have found a negative correlation between these stocks and their returns.
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What are the potential problems of this?
Empowered but inexperienced traders
Robinhood has been the app of choice for many millennial and Gen Z traders, and though their ambition to “democratise finance for all” has clearly appealed to this market, it also means that many amateurs have jumped into trading without any experience and gone on to make grave mistakes.
“Robinhood has gamified investing. Trading is now so simple that it can be easy to make impulsive decisions,” one millennial investor told Financial Times writer Siddarth Shrikanth, adding that they immensely regretted the progressively riskier trades they had made during lockdown. Shrinkanth noted that while Robinhood doesn’t provide investment advice, it does “little to deter poor decisions”. For example, almost 200,000 users were holding very complex United States Oil ETFs in the days after it crashed in April. “Why were younger investors drawn into volatile commodity tracker funds, despite repeated warnings from regulators that these risky products were unsuitable for retail investors?” he questioned.
Many millennials and Gen Zs are diving into trading complicated financial instruments without fully understanding the risks. And as well as the potential for devastating losses, this can also come at a tragic human cost. Alex Kearns, a 20-year-old Robinhood trader died by suicide after seeing an unexpected $730,000 negative balance on his account, which he didn’t understand and may have only been temporary.
Many millennials and Gen Zs are diving into trading complicated financial instruments without fully understanding the risks.
Volatile markets
In addition to the potential problems for individual millennial and Gen Z traders, it’s also thought that their activities may be having a significant impact on the markets. For example, having filed for bankruptcy in May, Hertz shares had surged 800% just a few weeks later, with this being one of the most popular Robinhood stocks. Stocks like these may be rallying because of the sheer number of users on the platform — there were more than 160,000 Robinhood investors who owned Hertz stock as of 17 June.
That said, not everyone believes millennial and Gen Z traders are responsible for inflated stock prices. “In June, Barclays published a study of moves in the S&P 500 and positions taken by ‘Robinhooders’,” explained The Telegraph’s Garry White. “It concluded that retail investors speculating in stocks are not responsible for the market’s rally and the top picks of the app’s users tended to underperform, and moves in the S&P 500 were independent of the positions taken on these apps.” He also concluded that while many Robinhood users may see big gains, ultimately: “this strategy needs a lot of attention to follow market moves and it seems inevitable that most will eventually lose money”.
Gen Z (age 4-24) represent a fundamental break with every generation in human history – they've never lived in a non-digital world. Their attitudes are different to older generations, giving us a sneak peek into the future of human behaviours. Motie Bring, General Manager for Global eCommerce at Worldpay Merchant Solutions,
Gen Z’s stature, spending power and influence will grow as they enter the workforce and their predecessors head into retirement. As the generation whose behaviours will reshape commerce over decades to come, their importance to global retailers cannot be ignored.
Organisations need to implement both immediate and long-term strategies that ensure they’re being heard, with attention to three key areas.
Be Personal and Authentic
Rapid urbanisation, population growth, and the rise of mobile and online commerce has fundamentally changed society’s notion of individuality. Shoppers have swapped in-store experiences for the speed and convenience of shopping online. But, more recently, we are seeing Gen Z consumers placing a renewed focus on the individual and rekindling the one-to-one roots of commerce. For this demographic, one size doesn’t fit all: Gen Z are looking for personal experiences that fit their values and lifestyle and keep them excited.
Fused with the data that makes personalisation possible, technology is powering the possibility of one-to-one customer experiences in the digital age. Mass consumer culture doesn’t sit well with a generation that is immersed in individual expression. Retailers are moving away from talking to segments to focusing on people.
According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion. 35 percent feel their favourite brand understands them as an individual.
Gen Z have a healthy sense of skepticism and so it is critical for brands to be authentic. Learning how to navigate the world in the era of “fake news” and having their digital lives saturated with messages of questionable quality and authenticity makes Gen Z discerning critics. They recoil from brands that fail to adhere to their values.
According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion.
Provide a Mobile Friendly Experience
Brands seeking to earn the favour of Gen Z will need to cater to their payment preferences. Like the generation itself, Gen Z’s payment preferences are more digital, more social and more mobile-focused than any other generation.
Gen Z uses digital services and mobile wallets more frequently than their predecessors. Over half use digital wallets at least once a month, three quarters use a digital payment app from financial service providers and others, while 79 percent use peer-to-peer (P2P) payment apps at least once a month. Digital access in the United Kingdom is very high: internet penetration in the country is one of the highest in the world at 95 percent of the population, according to the Worldpay from FIS 2020 Global Payments Report.
Accepting a range of smartphone-based digital wallets is vital to serve a generation that has largely bypassed using plastic cards as a payment method. Tailoring the right mix of digital wallet acceptance is key. Although globally recognised brands have proportionally large share, digital wallets are resisting homogenization with local and regional alternatives thriving around the world.
Innovate for a Hyper-Connected Generation
Gen Z isn’t instinctively drawn to the same banking, payment and investment tools as their parents’ generation. They want financial products and services that deliver practicality and convenience. Gen Z consumers are also savvier on what companies can deliver, and increasingly expect the same level of experience regardless of whether they are shopping on Amazon, ordering a pizza, or liaising with their financial service provider.
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From peer-to-peer services that are increasingly being accepted for business-to-consumer transactions, to direct debits; from checking to satisfy recurring payment arrangements, to purely digital banking services: Gen Z is ready and eager to engage with cutting edge financial services and payment innovations.
Alternative financing options that emphasise shorter flexibility—such as “buy now pay later” services find themselves fitting with generational need. According to the Worldpay from FIS 2020 Global Payments Report, these trends are on the rise in the United Kingdom: these payments are expected to grow 39 percent annually and are on course to double their global market share by 2023.
Establishing meaningful connections with Gen Z is a long-term approach, but one that requires focused attention. Merchants seeking success must explore how they can formulate and implement strategies with appropriate care, yet with the urgency that Gen Z increasingly expects.
About the Data
Figures quoted are taken from data published in Worldpay from FIS 2020 Global Payments Report unless otherwise stated or referenced. For research methodology, please refer to page 128 of the report.
Here David Orme, SVP at IDEX Biometrics ASA, discusses with Finance Monthly how Gen Z is set to chat the face of modern banking, as well as how banks can address fraud and security challenges and the role of biometrics in combatting fraud.
Consumers in Generation Z (those born after 1995) are the biggest market disrupters right now. They are predicted to make up 40% of all consumers by 2020, and will account for 32% of the global population overtaking millennials (31.5%, born between 1980-1994). As this generation’s spending power grows, they will change the consumer world in many ways.
Now, Generation Z looks set to transform the face of modern banking too. Our recent research into Generation Z’s attitudes towards banking and online security and biometrics found that nearly eight-in-ten (79%) 16-24-year olds think banks should do more to protect their customers from fraud.
Additionally, the youngest consumers in our study were 16-17-year olds, the target age for many new banking customers. Of this age group, a huge 95% think banks should be increasing fraud protection for their customers.
Why is Generation Z so concerned about fraud?
Having grown up around the threat of cybercrime, those in Generation Z are more aware of the risks of fraud than the more security-lax millennials (born between 1981 and 1994). Our research found that nearly three-quarters (74%) of 16-24-year olds believe it is too easy to find someone’s personal information online nowadays. Also, more than half (52%) of Generation Z are worried about someone stealing their identity.
I recently observed a focus group of 18-24-year olds to support our research and noticed a high level of awareness about banking and online security from the respondents. Interestingly, many of the young consumers showed they don’t just jump to install the latest banking apps simply because they are new or cool. They are thoughtful with their consumer decisions and assess how well services or technologies fit their security and financial needs first.
One respondent, Nikki, who is 24 and from London, stood out for rejecting mobile payment apps, the opposite of the perceived image of someone in Gen Z: “I only use my bank card to pay for things,” she said. “I deliberately keep my phone separate because I don’t want spending money to be too convenient.”
The security challenge
Like Nikki, many Generation Z consumers are more cautious while banking or shopping than retailers and banks often believe. The research shows that, far from being over-sharers of their personal information, more than three-quarters (76%) of Generation Z accept that it’s their responsibility to look after their data and keep their identity safe. In return, these consumers expect their banks and service providers to work just as hard to deliver a high level of protection for them.
Although new challenger banks, such as Monzo and Starling, are growing rapidly among young consumers, that doesn’t mean Generation Z trust them more when it comes to security than the high street giants. Michael, a 19-year-old student from London also in the focus group, summed up the care with which Generation Z approach digital banks: “I feel the online banks have to push up their security because there’s no physical presence,” he said. “So they’ve got to be more secure to be on top of their game.”
Although new challenger banks, such as Monzo and Starling, are growing rapidly among young consumers, that doesn’t mean Generation Z trust them more when it comes to security than the high street giants.
Our study also reveals a wider lack of confidence in all banks, as only half of Generation Z shoppers (54%) are certain that their bank would refund them any losses if someone fraudulently accessed their bank account and stole any amount of money. The new generation of banking customers expect greater security and responsibility from high street banks, which in turn is driving their consumer choices.
The biometric banking solution
The findings also show that Generation Z wants to see banks adopting new technology to combat card and online fraud. Nearly two-thirds of them (62%) think all banks should offer biometric payment cards to help reduce fraud.
Additionally, nearly half (45%) of Generation Z can’t believe credit and debit cards don’t already use biometrics for payment and ID security. Again, this is even higher among 16-17-year olds, with nearly two-thirds (63%) of them expecting banks to already use biometrics for payment card security. As high street banks often thrive on signing-up new customers while they are young, appealing to this new generation of consumers is vital for the industry.
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Therefore, financial institutions must now add biometric technology to the payment card market to attract young and potentially loyal customers. In fact, nearly half of those in Generation Z (46%) would choose a bank that offered biometric payment cards over one that didn’t.
Most importantly, Generation Z consumers are willing to pay for added security as two-in-five (43%) would expect to pay a little more for a biometric payment card, with a third (33%) willing to pay between £3-5 per month for it.
Banks need to act now
While many traditional banks have been slow to respond to the needs of Generation Z customers, it’s important for the success and future of the financial industry that they don’t ignore the demands of this generation of customers any longer. Unless high street banks act now to address the security concerns of those in Generation Z, they’ll soon be overtaken by fintechs and digital challengers who can innovate faster.
It is apparent under 24s expect to be using new, secure biometric technology today for increased payment security and convenience. Banks must now introduce innovative biometric payment cards to attract young customers, protect users from fraud and build trust with the consumers of tomorrow.
Generation Z growing concerns
Having grown up around the threat of cybercrime, those in Generation Z appear to be more aware of the risks of fraud than millennials (born between 1981 and 1994). Our research found that nearly three-quarters (74%) of 16-24-year olds believe it is too easy to find someone’s personal information online nowadays. On top of that, more than half (52%) of Generation Z are worried about someone stealing their identity.
While observing a focus group of 18-24-year olds held to support our research, I noticed a high level of awareness about banking and online security from the respondents. Many of the young consumers showed that they don’t just install the latest banking apps simply because they are new or cool. They are considered with their consumer decisions and assess how well services or technologies fit their security and financial needs, prior to acting.
One respondent, Nikki, who is 24 and from London, stood out for rejecting mobile payment apps, the opposite of the perceived image of someone in Gen Z: “I only use my bank card to pay for things,” she said. “I deliberately keep my phone separate because I don’t want spending money to be too convenient.”
Do banks still have our trust?
Like Nikki, many Generation Z consumers are more cautious while banking or shopping than retailers and banks may realise. Our research shows that, far from being over-sharers of their personal information, more than three-quarters (76%) of Generation Z accept that it’s their responsibility to look after their data and keep their identity safe. In return, these consumers expect their banks and service providers to work just as hard to deliver a high level of protection for them.
Although new challenger banks, such as Monzo and Starling, are growing rapidly among young consumers, that doesn’t mean Generation Z trust them more when it comes to security than the high street giants.
Although new challenger banks, such as Monzo and Starling, are growing rapidly among young consumers, that doesn’t mean Generation Z trust them more when it comes to security than the high street giants. Michael, a 19-year-old student from London also in the focus group, summed up the care with which Generation Z approach digital banks: “I feel the online banks have to push up their security because there’s no physical presence”, he said. “So they’ve got to be more secure to be on top of their game.”
Our study also reveals a wider lack of confidence in all banks, as only half of Generation Z shoppers (54%) are certain that their bank would refund them any losses if someone fraudulently accessed their bank account and stole any amount of money. The new generation of banking customers want to see even greater security and responsibility from high street banks, which in turn is driving their consumer choices.
A modern solution for a digital world
The findings also show that Generation Z wants to see banks adopting new technology to combat card and online fraud. Nearly two-thirds of them (62%) think all banks should offer biometric payment cards to help reduce fraud.
Additionally, nearly half (45%) of Generation Z can’t believe credit and debit cards don’t already use biometrics for payment and ID security. Again, this is even higher among 16-17-year olds, with nearly two-thirds (63%) of them expecting banks to already use biometrics for payment card security. As high street banks often thrive on signing-up new customers while they are young, appealing to this new generation of consumers is vital for the industry.
Therefore, financial institutions must now add biometric technology to the payment card market to attract young customers and grow loyalty with them. In fact, nearly half of those in Generation Z (46%) would choose a bank that offered biometric payment cards over one that didn’t.
Most importantly, Generation Z consumers are willing to pay for added security as two-in-five (43%) would expect to pay a little more for a biometric payment card, with a third (33%) willing to pay between £3-5 per month for it.
The time to act is now
As Generation Z will soon create a large proportion of banks’ customer bases, it is imperative for the prosperity of the banking industry that these security needs are not ignored. If high street banks remain slow to respond to the demands of Generation Z and fail to address its security concerns, they will soon be surpassed by digital challengers who are able to revolutionise the system faster.
It has become increasingly clear that under 24-year-olds are now expecting to be using innovative and secure biometric technology for improved payment security and convenience. Banks now hold the responsibility to make this change as soon as possible. The introduction of new biometric payment cards will entice younger customers, protect users from fraud and encourage continued faith in consumer banking.
John Forword, Reed Finance expert, says finance companies need to match the career aspirations and values of a generation which knows what it wants from prospective employers.
For some firms, this already means investing in organisational change in order to compete for and secure the employees they will need for a stronger commercial future.
Generation Z – those born from 1995 onwards - offer a unique and prized set of skills and aspirations. The combination of being tech-savvy, entrepreneurial in outlook and collaborative by nature in order to co-create, are some of the key characteristics that separate Gen Z from previous generations.
And finance companies want what they offer.
But in the face of increasing competition to attract the very best talent from a pool that is in demand, the need for finance industry employers to take a holistic look at their cultures and structure to ensure they chime with what Generation Z is looking for becomes increasingly pressing.
In the face of increasing competition to attract the very best talent from a pool that is in demand, the need for finance industry employers to take a holistic look at their cultures and structure to ensure they chime with what Generation Z is looking for becomes increasingly pressing.
For many companies, these changes are well underway with some businesses already looking to leave others behind in the race for Generation Z. Reed Finance recently conducted an in-depth survey of 500 senior finance professionals to see what companies were doing to attract this generation to help companies not only keep up but get ahead in the race to capture Generation Z talent.
- Initial changes being made by firms include the redefinition of existing training, development and succession models, which 36% of companies questioned said they were undertaking.
- A third of firms are already looking at broadening workplace technology and systems deployment, and a quarter admitted that they were striving to develop more collaborative working environments.
- In recognition of the need to reshape reward and remuneration models to more accurately match the demands of a new, aspirational workforce, 22% said this process was currently underway within their organisations.
- Companies have also been working hard to develop more collaborative working environments, with 25% saying they had already put plans to achieve this into action.
- The majority of employers (60%) said they believed that their company is not doing enough to adapt in many areas and entice talent from Generation Z.
In short, employers know that this generation is completely different from what came before and they are making changes but there are key opportunities for attracting the next generation.
- Potential recruits will be judging organisations on a number of criteria to determine if the firm is the right one for them in terms of opportunity, development, job satisfaction and enjoyment. So companies must demonstrate these in clear, progression lines.
- Aside from the actions already undertaken by companies, it is clear, from a number of studies that Generation Z seeks out greater flexibility in the workplace when compared to predecessors. If flexibility is on the table then it will make a major difference.
- Technology and the opportunity to work with developing and innovative advances in tech is also near the top of the priority list, alongside the demand for a transparent and achievable career progression vision.
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In order to succeed in attracting the next generation, companies must be clear about creating the right type of workplace scenarios and addressing the critical areas outlined above. They must also recognise the personality characteristics that drive the ambition and vision of Generation Z talent.
This next-generation has a fearlessness and confidence to articulate what they want and are happy to demand it from prospective employers. They want to work for a firm that matches their desire to progress and develop, as well as operate by shared values. If they do not find it, they are likely to vote with their feet and look elsewhere.
But making these changes isn’t easy. Nearly a quarter admitted that redefining training, development and succession models would be the most difficult to achieve, followed closely by the task of altering reward and remuneration practices and creating more collaborative working environments.
However, the message is clear. If you want to attract the best Generation Z talent, finance organisations need to be mindful of the need to provide flexible working conditions, more imaginative rewards and remuneration structures, cutting edge technology, proven career progression opportunity and invest in developing and sustaining collaborative and sociable workplace environments.
Companies that ignore the working demands of Generation Z will end up losing them to rivals.
