PRISM: T

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T IONTGE N
ATNID
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F INING
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I NGDEUNSETRRAT
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THE FUTURE
WORKFORCE

RECRUITING AND RETAINING

VITAL GENERATION Z TALENT
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AUTHORS

Lokesh Dadhich, Marten Zieris, Sara Nasaif, Henri Lehmann, Jérémy Lamri

Generation Z (widely known as Gen Z),

encompassing those born between 1997
and 2012, is anticipated to make up over
one-quarter of the global workforce by
2025, according to the World Economic
Forum. As the first digitally native
and globally connected generation,
Gen Z brings distinctive skills and
capabilities to organizations, making
their recruitment and retention essential
for sustained business success in the era
of digital transformation and artificial
intelligence (AI). This is especially
significant for companies within
traditional industrial sectors grappling
with the challenges of digitization,
striving to achieve ambidexterity
by balancing agility and innovation
with existing strengths in scale and
productivity.
Nevertheless, the growing presence of Gen Z in the workforce
comes with its own set of challenges. Gen Z as a whole possesses
unique needs, expectations, and motivations, diverging from their
immediate predecessors in Generation Y, commonly known as
Millennials. Surprisingly, our research shows that only 26% of Gen Z
individuals feel that current jobs align with their values. Effecting a
transition toward Gen Z compatibility within organizations, without
estranging current employees, demands transformative change and
reconfiguration of management styles and structures.

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V I TA L G E N E R AT I O N Z TA L E N T

Based on surveys of Gen Zers in North America, Europe, Southeast

Asia, and the Middle East, as well as interviews with Global HR
directors, this article outlines the essential measures organizations
must undertake in terms of mission, structure, and culture to
effectively harness the invaluable skills of their newest recruits.

U N D E R S TA N D I N G G E N E R AT I O N Z

GENERATION
Z

GENERATION
Y

GENERATION
X

BABY
BOOMERS

SILENT
GENERATION

GREATEST
GENERATION

1900 1920 1940 1960 1980 2000 2020

FIGURE 1: GENERATIONS BY YEAR OF BIRTH

Gen Z stands out as the first generation to grow up entirely in the

digital era, devoid of any recollection of a world before the internet
(see Figure 1). Unlike their Millennial counterparts, who embraced the
internet later, in their developmental years, Gen Z members are genuine
digital natives, having been immersed in technology since birth.

W H AT S E T S G E N Z A P A R T ?

While acknowledging the risks associated with generalizations,

we note several key traits and characteristics commonly observed
among Gen Z individuals:

– Tech prowess: Proficient in the use of technology, they perceive it

as an inherent aspect of their surroundings, rather than a skill to
be acquired.

– Global perspective: The omnipresence of social media has

significantly shaped Gen Z’s worldview. Exposure to a constant
influx of information around the clock via platforms such as
Instagram and X (formerly Twitter) has not only made them globally
aware, but also influenced their perceptions of life, environmental
issues, ethics, and standards of work and work-life balance. Social
media serves as a powerful lens through which they interpret and
engage with the world.

– Challenging socioeconomic experiences: Many Gen Z individuals

have witnessed the repercussions of the 2008 recession on their
families, faced disruptions in education and early career steps
because of the COVID-19 pandemic, and are currently contending

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with soaring housing costs. These issues are adversely affecting

their mental health, with 42% diagnosed with specific conditions.
For some Gen Zers, this has led to loss of trust in established
political and institutional structures.

– Diversity: Gen Z exemplifies a rich tapestry of backgrounds, with

nearly half of its members in the US representing racial or ethnic
minorities, as indicated by census data. This demographic intricacy
is a testament to the profound impact of globalization, which has
shaped Gen Z as products of increasingly heterogeneous societies
or melting pots. Additionally, their heightened inclination toward
pursuing higher education distinguishes them from preceding
generations.

These factors all contribute to the formation of values that Gen

Z holds dear. Their advocacy for inclusivity, diversity, and social
responsibility stems from their unique experiences, coupled with
a profound need for purpose in both personal and professional
spheres. The omnipresence of social media leads to amplification
of their opinions on a wide array of subjects, as well as greater
active engagement. Consequently, this can create an impression
of heightened knowledge and maturity, even among the youngest
members of this cohort.

Comparing Generations in the Workplace

Organizations today boast diverse workforces spanning multiple

generations, each characterized by unique attributes and
distinct expectations:

– Baby Boomers (1946–1964): Anchored in a desire for security, Baby

Boomers favor hierarchical structures and often subscribe to a “live
to work” ethos. Many have devoted their entire professional lives to
a single employer.

– G eneration X (1965–1980): Thriving in collaborative environments,

Generation X appreciates teamwork while maintaining a self-
effacing demeanor. Respect for their work is paramount, and they
prefer autonomy without the constraints of micromanagement.

– G eneration Y (1981–1996): Driven by a quest for purpose,

Generation Y (Millennials) seek meaning in the organizations
they align with. They actively seek continuous feedback on their
performance, emphasizing a dynamic exchange in the workplace.

– G eneration Z (1997–2012): Prioritizing mental health support,

Generation Z shares with Millennials a desire to work for companies
infused with a sense of purpose and the flexibility to adapt to
varying work arrangements. Notably, financial rewards hold greater
significance for Generation Z than their Millennial counterparts.

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PERSPECTIVES FROM THE WORKPL ACE

The oldest members of Gen Z have already entered the workforce,
accumulating four to five years of experience and providing valuable
insights into their impact on business. Simultaneously, the demand
for their digital native skills has exponentially increased, underscoring
the importance of comprehending and meeting their unique
requirements. While differences persist between individuals, Gen Z
characteristics can be generally distilled into four main areas:

1. HIGH KNOWLEDGE COUPLED WITH

A HIGH DEMAND FOR PURPOSE

Thanks to the internet, a majority of Gen Zers (52% in our research)

possess preconceived notions about the world of work, forming
strong opinions about specific companies and industries based
on observed actions — mostly through the internet. They exhibit
higher expectations than previous generations and, akin to Gen Y,
seek employment with organizations that align with their values and
purpose. Notably, financial motivation ranks higher for Gen Z, with
30% prioritizing fair wages.

2. DISLIKE OF CONFLICT AND

A P R E F E R E N C E T O AVO I D
C O N F R O N TAT I O N

Raised in the online realm, Gen Zers may question existing norms
and prove less adept in face-to-face situations. For instance, they
may challenge set working hours, preferring flexibility to complete
tasks efficiently. However, this lack of adherence to traditional
norms may be perceived
G EN Z PL AC ES A PREMIUM O N as unprofessional by older
generations. Additionally,
AC HIE VIN G A SATIS FAC TO RY
their digital upbringing may
WO RK /LIFE BAL AN C E , WITH
result in a lack of teamwork
57 % O F TH O S E IN O UR SURVE Y experience, which would
C O NS IDERIN G IT C ENTR AL TO make them more comfortable
A SUC C ES S FUL CAREER . working independently.
Conflict avoidance is
a notable trait, and if they feel undervalued or unheard, Gen Z
individuals are inclined to leave rather than engage in disputes, which
underscores the pivotal role of managers in their retention.

3. FOCUS ON WORK /LIFE BAL ANCE

AND JOB FLEXIBILIT Y

Gen Z places a premium on achieving a satisfactory work/life balance,

with 57% of those in our survey considering it central to a successful
career. Motivated by the desire to safeguard their mental and physical
wellbeing, they seek employer support, including access to wellbeing
services, as standard. Notably, they exhibit a propensity to switch
jobs regularly, especially if they feel unchallenged or underdeveloped.

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Retaining them beyond the initial learning and productivity phase is

critical for organizations to realize the return
on investment from their recruitment.

4 . DYNAMIC WORK E THIC WITH

CROSS-FUNCTIONAL ENGAGEMENT

Although Gen Z may challenge the need for set working hours, their
work ethic remains strong when they are engaged properly, which
leads them to exceed expectations — contrary to what some
might believe.

“In fact, Gen Z’s level of engagement is high when they feel connected
to a task. Sometimes, when they are too excited, they tend to go
overboard, and actually even put in 150% of their personal attention
and effort. Yet, when they are not excited, it’s difficult to engage them.”
Hareth Alsahan, CHRO, Tawal

Given their wider interests and multidimensional digital skillsets,

Gen Z often does not feel confined by the boundaries of a specific
function, instead expecting to work across departments and areas.
This creates challenges for traditional organizational structures put
in place to deliver clear responsibilities and accountability.

Figure 2 shows that Gen Z has strong requirements across several

areas. When asked to choose the three most important aspects of a
successful career, nearly two-thirds of participants listed earning a
high salary as one of the factors. They also aspire to achieve work/
life balance while seeking managerial roles and constantly developing
new skills.

65%

57%
52%
EARNING A HIGH SALARY 48%
43%
ACHIEVING WORK-LIFE BALANCE

35%
ATTAINING LEADERSHIP OR MANAGEMENT ROLES

CONSTANTLY LEARNING AND DEVELOPING NEW SKILLS

REACHING A HIGH LEVEL OF JOB SATISFACTION

MAKING A POSITIVE SOCIAL IMPACT

FIGURE 2: SUCCESSFUL CAREER FACTORS OF GENERATION Z

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UNLO C K IN G G EN Z ’ S IMPAC T
Businesses are grappling with global scarcity of digital skills — even
more so today with the advent of AI. This lack of digital tech talent
poses an existential threat to business growth and innovation, with
nearly 60% of employers reporting that not having enough skilled
employees has a major or
moderate impact on their
G EN Z C O NTRIBUTES operations. HR expert and co-
S PEED AND C RE ATIVIT Y author of this article Jérémy
TO O RGANIZ ATI O NS , Lamri terms this challenge
C O MPLEMENTIN G E X IS TIN G the “Talent Bomb,” which
S TREN GTHS IN PRO C ES S signals the looming threat
of a skills gap jeopardizing
AND PERFO RMAN C E .
organizational success. Gen Z
emerges as a crucial force in
defusing this bomb, offering essential digitalization and innovation
skills. Notably, 74% of Gen Z individuals in our survey express positivity
toward technology and AI, with none strongly opposing their rapid
adoption.

Gen Z contributes speed and creativity to organizations,

complementing existing strengths in process and performance. Their
key skills and attitudes span:

– Technology proficiency: As digital natives, Gen Z is positioned to

assist companies in navigating dynamic technology and AI-driven
markets.

– C ommitment to learning: Gen Zers, raised with easy access to

online courses, YouTube, blogs, Wikipedia, and now generative AI,
actively develop their skills, propelling organizational advancement
through continuous learning.

– Entrepreneurial mindset: Embracing failure and avoiding blind

loyalty to methods, Gen Z exhibits openness to cultural change and
a boundaryless approach to functions and teams.

– Inclusive thinking: Advocating for empowerment and meritocracy,

Gen Z prioritizes skills over gender or color, challenging traditional
hierarchies.

– Focus on purpose: Aligning with broader trends, Gen Z seeks

organizations that have a clear sense of purpose, integrating values
such as sustainability and ethical practices alongside financial
performance.

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TA I L O R I N G T H E W O R K P L A C E F O R
G E N Z : S T R AT E G I C R E C O M M E N D AT I O N S
FOR EMPLOYERS
Building a Gen Z-compatible organization, while meeting the needs of
other generations and creating ambidextrous structures, requires in-
depth change management, focusing on five areas:

1 . E S TA B L I S H I N G A V A L I D S E N S E
OF PURPOSE

Gen Zers are looking to work for organizations that share their sense
of purpose, and already have strong opinions about many companies
and industries based on their expansive networks and extensive
internet exposure. Companies therefore need to transform and
embrace this sense of purpose in everything they do, aligning it with
their values to change their organizational DNA and working culture.

When asked to describe their ideal work culture, Gen Z responses

included:

– “An environment in which I am able to continue to learn and develop

my skills, while also being able to maintain a healthy lifestyle
outside of work.”

– “A place where everyone is supportive, and I wake up excited to

go to work.”

– “ Hybrid, challenging, aligned to my job aspirations, no

corporate politics.”

Based on the earlier work of psychologist Kurt Lewin, transformations

generally fit into one of two models:

1. Type I transformation: Adopting certain values (such as

sustainability), but not embedding them within the organization’s
economic model. Companies adopting this transformation assume
their responsibilities (such as to the environment) without radically
modifying their activities to align with that responsibility. In
other words, the dominant nature of economic performance is
not questioned, but rather, reconfigured to integrate ecological
challenges. The primary business motive remains profit, but with
the aim of “doing less harm.”


2 . Type II transformation: Undergoing deep structural changes
when adopting a value (such as sustainability) and integrating
it at every level of the organization’s operations. This type of
transformation requires emotional intelligence, open-mindedness,
and a holistic vision. Type II transformation is a mutation, a
profound change that requires courageous questioning of the
status quo, intense awareness, and a strategic vision.

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While Type I transformations may be a first step toward adopting

important ecological values, they won’t meet the expectations of Gen
Zers who look for an employer that “walks the talk.” Gen Zers may view
it as window dressing, which can be counterproductive to attraction
and retention efforts.

2 . CHANGING MANAGEMENT AND

L E A D E R S H I P B E H AV I O R S

Managers, particularly from older generations, must adapt behaviors

to accommodate Gen Z’s aversion to criticism, strong opinions, and
desire for independence. This requires patience and open-mindedness
to new perspectives from managers. Transformative leadership styles,
emphasizing empathy and encouraging creativity, resonate well with
Gen Z. For example, rather than a simple presentation at their annual
performance review, a Gen Z employee may go further and propose
creating a video displaying their achievements. Managers need to give
Gen Z the space to experiment in these ways.

Gen Zers highlighted some of the challenges they face within the
workplace, citing, for example:

– “ Not being taken seriously, with a negative outlook on our

capabilities, being underestimated.”

– “ Unspoken rules that are outdated.”

– “Gaining trust/respect from older employees is not easy,

especially in leadership positions.”

3 . C R E AT I N G A TA I L O R E D E M P L O Y E E
JOURNEY

The sense of purpose and concern for Gen Z values has to extend
across the employee journey from initial talent attraction and the
hiring process, to developing their skills, all the way to their departure
and staying in touch. Essentially, the double helix of organizational
DNA (purpose and identity) has to be present at every step of the
employee journey (see Figure 3).

Purpose and identity must permeate every step of the employee

journey, which necessitates an organization-wide commitment.
Employee journey thinking benefits the organization by creating
specific personas and tailored touchpoints for each cohort, which
can be used to deliver value, as well as attract and retain Gen Z
employees.

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ORGANIZATIONAL DNA EMPLOYEE JOURNEY

WHAT GUIDES US? WHAT VALUE DO WE
OFFER OUR EMPLOYEES?

ATTRACT
PURPOSE/
MISSION &
HIRE
VISION

ONBOARD

PERFORM

DEVELOP

DEPART

STAY IN CONTACT
IDENTITY

FIGURE 3: ORGANIZATIONAL DNA (PURPOSE AND IDENTITY) IN RELATION TO

THE EMPLOYEE JOURNEY

4. TRANSFORMING STRUCTURES AND

W AY S O F W O R K I N G

Flexible, creative organizations require agile ways of working that

replace bureaucracy and hierarchy with a lateral, competence-
based approach. Gen Z employees thrive in this environment and
culture, which brings creativity to
FLE X IBLE , C RE ATIVE existing structures and creates
ambidextrous organizations. This
O RGANIZ ATIO NS REQ UIRE
transformation benefits overall
AG ILE WAYS O F WO RK IN G
business performance, creating a
THAT REPL AC E BURE AUC R ACY holacracy 1 that focuses on skills,
AND HIER ARC HY WITH A capabilities, and ideas, rather
L ATER AL , C O MPE TEN C E- than seniority.
BAS ED APPROAC H .

1. Holacracy is a system of self-management in which leadership roles

are not subject to a traditional hierarchy of command. 43
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Omantel — Embracing Gen Z

Telecom company Omantel has transformed how it operates to
benefit from Gen Z skills. It has built a pipeline of talent to select
potential candidates from schools, and partners with leading
universities to develop their skills through undergraduate courses.
Once they enter the firm, they are positioned as experts from the
beginning, with promotions and opportunities based on ideas and
results, rather than length of tenure. Examples include:

– Its leadership program, which allows Gen Z employees to shadow

the executive team, both on a day-to-day basis and through a
shadow board. They tackle and discuss the same agenda as the
main board, providing their own insights and ideas, thus enriching
the decision making process.

– Its “No Boundaries” program enables employees to explore

initiatives in any functional area, regardless of their role, breaking
down barriers and providing new perspectives.

– Its in-house innovation program, “fikra,” enables employees

to submit ideas and develop them via sabbaticals into viable
businesses. Successes include OMPay, a payment service provider,
and Sayyad, an app to link fishermen to markets.

“It is very hard to retain Gen Z and its skills, requiring transformation in
how we operate. The days of top-down decision making are long gone,
meaning we’ve put in place the programs to get the best from Gen Z to
transform the organization.” Chief People Officer, telecoms provider

5 . E MP OWE RIN G E MPLOY E E S

WITH SUPPORT AND TOOLS

Gen Z employees are eager to develop and fast learners. Over three-
quarters (78%) say a company’s commitment to providing ongoing
career development opportunities influences their job choices.
Therefore, providing them with the opportunities to grow is essential
for their retention. This could be done within their current role,
or, given their desire for change, through other roles within the
organization, such as via rotation programs.

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As digital natives, Gen Zers expect to have access to relevant

technology within their roles. Empowering them with the right
technology and tools (such as AI) will enable them to use their digital
knowledge to lead and drive wider digital transformation within the
organization. Not only will this benefit the business overall, but it
will also enable employees to act as ambassadors for technology
adoption, working with older generations to explain its benefits and
motivate others to adopt it.

By 2035, Gen Z will be the largest generation in the workforce, taking

up more management roles, reshaping the workplace, and refocusing
organizations. Successful companies will focus on life-long learning,
openness, and transformative leadership. This will enable them
to meet the changing needs of markets that are also increasingly
dominated by Gen Z consumers. Recognizing and aligning with
the motivations and preferences of Gen Z is crucial for shaping HR
strategies, underlining the significance of a nuanced approach that
avoids broad generalizations and respects the distinct individuality
of each employee. Furthermore, establishing an agile and lateral
organizational structure that allows Gen Z to thrive within a diverse,
multigenerational workforce is pivotal for positioning organizations
favorably in the ever-evolving future.

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INSIGHTS FOR THE EXECUTIVE

As organizations set sail into the Gen Z-driven future, HR
professionals and CEOs must chart a strategic course to attract and
retain this unique talent pool. Here are some first steps to integrate
Gen Z into the workforce:

1. Cultivate open dialogue, collaboration, and understanding:

Establish channels for transparent communication between
leadership and Gen Z employees, while encouraging cross-
generation dialogue to actively address challenges and
opportunities.

2. R
 eassess current employee journey approaches: Examine
current practices in recruitment, engagement, and retention to
align with the unique needs of Gen Z. Consider adjustments in
areas such as compensation, evaluation metrics, and working
hours to attract and retain Gen Z talent. In doing this, companies
should adopt a personalized approach, meeting individuals on
their terms, and offer a diverse “portfolio of rewards” that allows
employees to select options aligned with their preferences and
motivations, rather than adopting a one-size-fits-all strategy.

3. Implement initiatives with Gen Z needs in mind: Co-develop

strategic company initiatives around diversity, equity, and
inclusion (DEI), as well as professional development, alongside
Gen Z employees, ensuring alignment with their needs.

4. Establish continuous feedback and adaptation mechanisms:

Implement robust systems for receiving feedback from
Gen Z employees and the broader workforce regarding the
effectiveness of initiatives, and adapt strategies accordingly.

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LOKESH DADHICH
is a Partner in Arthur D. Little’s Dubai office and a
member of the Telecommunications, Information
Technology, Media & Electronics (TIME) and
Performance practices.

MARTEN ZIERIS
is a Partner in Arthur D. Little’s Frankfurt office and a
member of the Transformation practice.

SARA NASAIF
is a Business Analyst in Arthur D. Little’s Manama office
and a member of the Transformation practice.

HENRI LEHMANN
is a Business Analyst in Arthur D. Little’s Frankfurt
office and a member of the Performance practice.

JÉRÉMY LAMRI
is an HR expert and author.

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