This past year, Magnet, Inc. conducted several research studies with "Gen Zers," the cohort of 13-to-28-year-olds born between 1995 and 2010 (give or take a year or two). Our clients - two private colleges, a state-wide university system, a healthcare provider, and two banks - hired Magnet because they were keenly interested in knowing what lies ahead for them in school enrollments, memberships, and demand for products and services, respectively.
This generation, which should be spreading its wings and preparing to fly, is more apprehensive about its trajectory than its preceding generations. Gen Z, aka Zoomers, has been accused by older cohorts of having less hustle and being less participatory. They may appear less enthusiastic, but their reluctance is justifiable. They are more thoughtful and pragmatic than previous generations, and as such, they are less likely to reflexively follow in the footsteps of previous generations. All signs indicate that this generation has a different flight plan.
Business Not as Usual
"Scared” “Challenging” “Frightened” “Confused” “Stressed out” “Too expensive” “Not safe”
When we asked high-school juniors from middle-class families to describe how they feel about the future, the answers Zers provided were "scared," "challenging," "frightened," "confused," "stressed out," "too expensive," and "not safe." These 16 and 17-year-olds, were articulate, honest, pragmatic, and forthright. Gen Zers are standing at the threshold of higher education and the professional world, and they are questioning the value of many of the conventions and institutions of American life. They are feeling the consequences of climate change, the rising costs of everything, the explosive growth in gun violence. So daunting are these existential pressures, many do not feel they can afford to or should follow the traditional path. We were so taken aback by this severe shift in sentiment that we searched for more data.
Our quest for corroborating data brought us to John Della Volpe's book entitled FIGHT: HOW GEN Z IS CHANNELING THEIR FEAR AND PASSION TO SAVE AMERICA. Mr. Della Volpe, the director of polling at Harvard's Kennedy School Institute of Politics (IOP), discovered in his research what we have encountered in our studies, and that is,
"Gen Zers were quick to point out the structural deficiencies of our institutions and why we need to reexamine every aspect of our life."
- JOHN DELLA VOLPE. FIGHT
Gen Z: By the Numbers
Gen Z, aka Zoomers, is loosely defined as people born between 1995 and 2010, give or take a year or two. Some sources say the years range from 1997 to 2012. As of 2023, Gen Zers are between 13 and 28-years old, and there are approximately 68.6 million Gen Zers in the United States, about 20% of the US population. About 38% of Zoomers are in their middle and high school years, one-fifth (20%) are in their college years, and the remaining 40% are in their post-college and early employment years.
~ 9 million | 13 - 14-year-olds | 7th & 8th grades | 13% of Gen Zers
~ 17 million | 15 - 18-year-olds | High School grades | 25%
~ 14 million | 19 - 21-year-olds | College Years | 20%
~ 28 million | 22 - 28-year-olds | Post college years | 41%
Under Pressure
Compared to other generations, Gen Zers don't expect to achieve financial security, and many doubt their ability to buy homes, have kids, or retire. As if the stress of teen and young adult life wasn't enough, the hurdles for Zoomers are much higher than in previous generations. Most Gen Zers report that the cost of living is the primary concern. Colleges are more expensive than ever, and many Zoomers' parents still have debt from their schooling. In our research, some students report that their parents have yet to see a college investment return and are apprehensive about adding more to the family's debt.
"Over the past 20 years, tuition and fees at private national universities have jumped 134%, out-of-state tuition and fees at public national universities have risen 141% and In-state tuition and fees at public National Universities have increased 175%. "
- US NEWS & WORLD REPORT -SEPTEMBER 2022
Student: "What if it [college] doesn't pay off? My mother went to college, got a degree, which she doesn't use and she's still paying off her student loans."
Parent: "I don't want my son to rack up 20, 30, 60k and then go into the work force and not make enough money to pay it off."
Student: "I don't want to pay money if I don't know what I want to do. It's an expensive way to find out whether I like something. I can't afford to experiment."
- MAGNET, INC. FOCUS GROUP PARTICIPANTS
The cost of healthcare and housing has risen so dramatically that in addition to the education debt they're paying off and will be paying off, it's increasingly difficult for younger people to get a place of their own and establish independence. Research from the Kaiser Family Foundation indicates that health spending from some families has increased two times faster than wages.
"Health costs continue to increase and in turn health spending by families with large employer health plans has increased 2 times faster than workers' wages over the last 10 years, according to research."
- PETERSEN / KFF 2018
Mental Health is a Major Issue
The stress and anxiety about school, employment, gun violence, economic insecurity, political instability, personal relationships, climate change, and social media have weighed down Zoomers just as they should be preparing to fly.
This generation has wondered far too often if one of their classmates might gun them down in school. Thirty percent (30%) of Zers have been affected by gun violence. About one quarter (28%) of Zers say someone shot at them or a friend. This cohort has witnessed its elders storming the Capital. The oldest Zers were 13 when they watched their families struggle through the great recession.
"We are a generation forged by trauma and loss, but we are not defeated."
"Half of our generation reports feelings of depression and/or anxiety. The government reports our stress levels are twice those of adults over thirty."
- DAVID HOGG, FIGHT
Seventy-five percent of Generation Z felt stress because of mass shootings (13 percentage points higher than adults overall). Sixty-two percent were concerned about the rise in suicide rates (+18 compared to adults overall). Fifty-eight percent were anxious about climate change and global warming (+17 compared to adults overall).
- JOHN DELLA VOLPE, FIGHT
Adding to the uphill climb of trying to get a life will be the mental health bills or the costs and consequences of not getting therapy. Gen Zers need and want mental health services; however, they are more than three times more likely to cite the lack of access to affordable mental health care compared with 55- to 64-year-olds. Perhaps the most alarming statistic is that when comparing 2007–2009 with 2016–2018, researchers found that suicide rates among youths 18 to 34 increased by 47 percent.
Telling It Like It Is
Gen Z is on a search for truth. The value honesty and authenticity and they are very tired of the bullshit they’ve been hearing from older generational cohorts. As such, they have little patience for chirpy ad speak. They admit they are scared. Yet, they dare to fight and stand up to the old guard that has been denying and putting off major existential issues like climate change.
“Blah, blah, blah. This is all we hear. They [older generations] have had thirty years of blah, blah, blah and where has that led us?”
- GRETA THUNBERG
It is no longer a forgone conclusion that college is the next right move. When talking about higher education, some Gen Zers from middle- and lower-income families are unsure about the value, their concern about racking up more debt is valid. However, they ask important questions: Is it worth it? Will I get the best skills at college? Do I really need a 4-year degree? Does a college education adequately reflect real-world conditions?
Gen Zers are asking the right questions and telling it like it is. Even when we research the most mundane household products, Zers want to know what the brand is doing for the world. What is the brand's contribution to the betterment of society or the planet? How's the product going to be packaged? What are the ingredients?
In one of our focus groups for a college, one of our participants stated that she is not signing up for the traditional game of life: college, marriage, kids, house in the suburbs, etc.
" I don't need a huge house that costs too much to heat and cool. I don't want to spend money, water, and gas on a lawn I don't need. Your generation [Boomers] is shackled to a desk working late into your life to pay off all your debt. I'm not even sure I want to get married and have kids."
-CARLY, 18-YEAR-OLD MAGNET FOCUS GROUP PARTICIPANT FROM CA.
Listen Up
Listen to what Boomers have to say. Their concerns are real, and their intentions are good. Sure, there are exceptions to this, but most of the Zers we’ve researched are eager to work hard and make a difference in a way that makes the world cleaner, safer, smarter, and more affordable. Yes, they are demanding but they are not lazy or listless. They don’t want to put up with toxic work environments. They are not willing to put up with some of the unreasonable conditions that previous generations tolerated.
Gen Z has seen major institutions fail them and their parents: Wall Street, The Church, Healthcare, Gun Control, Government, Environmental Protection, Law Enforcement, Corporate America, Education, and Marriage. We don't need to furnish examples for each of these institutions since, sadly, we can all recall ways each of these structures has let us down.
They Want Purpose
Young people want brands that are rooted in doing what's right. One study states that up to 87 percent of millennials and 94 percent of Gen Zers want the brand in their lives to address pressing social and environmental issues. That explains why Millennials and Gen Zers are establishing B Corporations. Research indicates that businesses that pursue a B-Corp model, which puts profit on par with environmental and social impact, are growing much faster than traditional companies. For example, in 2021, new B Corp Certification submissions were up 16% compared to 2020 (and we saw a 24% increase in 2020 compared to 2019).
Gen Z wants to know what your brand is doing to make the world a better place. So, of course, they want brands that deliver on all the functional attributes, such as quality, affordability, reliability, and convenience. Still, on top of that, they want responsible, compassionate, inclusive, eco-friendly, and ethical brands. The latter set of attributes is now part of the value equation. A 2021 study by the firm Porter Novelli revealed some exciting findings about purpose-based brands.
More than three-quarters (78%) of respondents said they'd be more likely to work for a purpose-driven company, while nearly the same amount would be more likely to trust (76%) and be loyal to (72%) that company.
- PORTER NOVELLI, 2021
Millennials and Gen Z want to put their money where their values are. Magnet, Inc. recently conducted focus groups and a quantitative study for some banks to understand better segments called "Fiscal Rookies" and "New Money." These segments, which comprise upwardly mobile millennials and Zers, say that more than competitive rates are needed when looking for a bank. They are willing to forgo the best rates to be with a financial institution that is making a meaningful difference.
"I was with [Bank X] for a long time because my bank was bought by them. I left the bank because they still contribute to political campaigns which I don't agree with. I also care who the CEO is and what they're making."
"It matters to me if every teller is making a living wage. That would make a difference for me. If they advertised that their tellers were making $25 per hour in Boston, I would run to that bank."
"I want to hear that they are donating to local charities. I want to know that it's not just something that they're saying because they're local."
- MAGNET FOCUS GROUP PARTICIPANTS
Gallup's new book BLIND SPOT indicates that companies that have emotionally engaged customers have seen, on average, 66% higher sales growth and 10% growth in net profit, and a 25% increase in customer loyalty.
Companies that care about customers listen to them more. If you want to please this up-and-coming generation, banks would be well advised to care about Gen Zers financial well-being ahead of bank’s own interests. In the financial sector, engaged customers are 39% more likely to sign up for new services, 49% more likely to increase balances, and 32% more likely to seek financial advice from their financial institution. But first, these people need to believe that your institution honestly cares about their economic well-being.
At this point, only 9% of consumers strongly agree their bank puts their financial well-being ahead of the bank. And only 12% strongly agree that their bank wants to help them to reach their financial goals. So, there's plenty of opportunity for banks to show they care. A bank that can engage its customers and genuinely care about its customer's financial well-being will enjoy higher returns.
The Good News
As Boomers and Xers, our world began and ended in the neighborhoods we grew up in. As digital natives, Gen Z has had the world in their hands, and they are used to communicating with people all over the planet. This cohort connects with and is comfortable with different kinds of people worldwide. They also have a heightened awareness of humanity, world issues, and empathy for those in need. You see this in the actions and words of Greta Thunberg, environmental activist; Malala, women's rights activist; and David Hogg, gun control activist. These young people stand up for what's right and have the world's attention through social media and digital tech in general.
“I want you to panic. I want you to feel the fear I feel every day. And then I want you to act.”
GRETA THUNBURG
Gen Z is also the most racially and ethnically diverse of the cohorts, and they have been a part of the significant rise in the Hispanic population. So, this younger generation is globally connected and more comfortable and inclusive in a multicultural world. And what that means is that it will be taking in more ideas from more types of people and places. So, as we blend, we become more tolerant and learn from each other.
They're voting in record numbers. It is estimated that 27% of people ages 18-29 voted in 2022, making this the midterm election with the second-highest youth voter turnout in almost three decades. The highest turnout was in 2018, with 31% participation. Youth turnout was even higher in some battleground states.
They demand positive change for a better world. Knowing what Generation Zers have been through and seeing the world through their eyes will help you to understand why they are very different from the previous cohorts. If you are in business, you would be well advised to shape your brand around this cohort's view. Remember: they expect you to make a real and meaningful contribution. Your brand will benefit if it means what it says, and that appreciation will also carry over to other generational cohorts.
Gen Z: Your Customer or Your Competition?
If you don't address their needs, they will create a brand that does. Will Gen Zers be your customers or your competition? Do you know the term "hacking," a Millennial neologism still in use? Hacking entered the lexicon because younger generations proficient with technology were discovering and creating more efficient and effective ways of getting things done. Many of them had no choice but to improvise, and from these innovations, we are starting to enjoy more efficient and socially responsible products and services.
“Young Americans are seeking a better, modern form of capitalism that rewards the industriousness and innovation of all Americans, not just the shrinking slice of privileged whites graduating from college with a network of connections and little debt.”
JOHN DELLA VOLPE, FIGHT
Gen Z: Innovative Disruptors
We can't promise Zers the life we had, nor should we suggest we know the right way to live. But we can support Zers in disrupting, inventing, and forging a new and mindful way of life. Show them empathy as they fight the fights that some of us Boomers did half-heartedly.
Gen Z is an almost 70 million-strong cohort that represents a renaissance in global ingenuity and innovation. It would be wrong to suggest that an entire generation speaks in one unified voice, which is why we should all take research on generational cohorts with a grain of salt. However, this is one time when we see noticeable shifts in attitudes and behavior. We see it in their choice of products and services, their participation in elections, and their remarkable candor in focus groups. If you don't believe me, get a group of them together and hear what they have to say.
Sources:
John Della Volpe, FIGHT: How Gen Z is channeling their fear and passion to save America
Porter Novelli, Purpose Perception Implicit Association Study 2021
McKinsey & Company: How Gen Z Sees its Place in the Working World? With Trepidation.
Magnet, Inc., Generation Z: Brand Strategy Research
Gallup, 4 Things Gen Z and Millennials Expect from Their Workplace
Gallup, Blind Spot: The Global Rise of Unhappiness and How Leaders Missed It.
The Fourth Turning: William Strauss & Neil Howe