Getting young graduates excited about working in commercial banking will be a challenge for incumbents, as our report on Commercial Banking Top Trends in 2022 highlights. I began this series with a look at the industry’s outdated image in Wall St to Elm St: Surviving the talent nightmare. Then, in Smart banks will value talent more than experience, I outlined the skills and attributes commercial banks should seek in new employees. As the Baby Boomers and increasing numbers of Gen X employees retire from banks, there will be a need to create a young talent pipeline behind the Millennials—and that young talent will come from Generation Z.
Gen Z (born between 1997 and 2012) is the new cohort just beginning to emerge from post-secondary education and entering the workforce. Commercial banks looking for fresh talent will have to grab their attention, build a work environment that appeals to them and offer meaningful careers to retain them. While seemingly endless content has been written about working with Millennials, Gen Z remains a bit of a mystery to many employers. Let’s get to know them and find out what a Gen Z workplace might look like in the banking sector.
Meet Gen Z
Gen Z is largely the children of Gen X—my own generation. Gen X kids were often left to their own devices and faced challenges building a career in the shadow of the Baby Boomers—combining a mix of neon-inspired exuberance with Cold War warnings that the world might end at any moment. After surviving all that (I’m looking at you, parachute pants!), Gen X is raising its Gen Z children to value self-reliance and outside-the-box thinking.
Gen Z has grown up in a world where everyone has always had a personal computer in their pocket. Their smart phone exceeds the power of the top-of-the-line i486 PC I had in college—and it’s not even close. As a result, they expect they can take care of anything they need, however they want, whenever they want, wherever they are. And they’re not wrong—the world really has changed. Thus, a traditional early-2000s-style banking workplace full of assigned cubicles and desktop computers makes little sense to them.
As mobile natives, they are part of a world that is more connected than any previous generation has experienced. They have never heard a busy signal and rarely use their smartphone for voice calls.
But the generational differences don’t stop with technology. According to research from Stanford University, Gen Z has strong values, including concern for the environment and support for people who face social and economic barriers. They expect transparency and authenticity from companies they buy from, and even more so from companies where they work.
Simply having purpose isn’t enough. Gen Z demands that companies infuse purpose across their organizations, via all touch points, and through their words, actions, products, services and ways of doing business, inside and out.
While Gen Z does not have the endless optimism of the Millenials, it is also not as cynical or fatalistic as its Gen X parents. Despite their skepticism about corporate motives and their frustration with the lack of progress on the climate crisis, they believe in a world where people can work together to change the course we’re on—and they’re ready to roll up their sleeves to get it done. Gen Z believes in a future that they can change and are willing to work at shaping it. We, as corporate employers, need to effectively harness their energy. Banks in particular need to be transparent about their motives and create an environment that attracts Gen Z.
What does a Gen Z workplace look like?
Members of Gen Z are ready to take responsibility for their own tasks, but they like to work collaboratively with their colleagues. Perhaps surprisingly, they prefer in-person communication to online methods, which suggests that a hybrid workplace will appeal to them more than a completely remote one.
Once they learn the basics of their roles, Gen Z employees are likely to make their job their own. As pragmatists and self-starters, they will find innovative ways to complete their work if they are provided some leeway. Strict supervision is likely to be off-putting, while encouraging and challenging them to look for smarter ways to work is likely to increase productivity and reduce turnover.
75% of Gen Z revealed that they would like to explore different roles in an organization rather than switch companies.
After watching Millennials flock to create start-ups, with decidedly mixed results, Gen Z understands that failure is often part of the process. They may therefore be less risk-averse than previous generations. This makes them well suited to an agile workplace, recognizing that learning from failure is how you succeed in the long run.
For Gen Z, a bank may be more of a concept than an institution. Their world is not separated into incumbents and fintechs or branches and apps. They will be the generation that feels comfortable taking commercial banking into the social media environment, the metaverse, crypto markets and whatever else emerges over the next 30 years.
How can banks attract and retain the Gen Z workforce?
While Baby Boomers strove for the image of the perfect family/situation, Gen X strove to make money and retire as fast as possible, and Millennials saw the journey as the destination, Gen Z brings yet another perspective. Gen Z sees less of a dividing line between their work and the rest of their life. The benefit for employers is that these employees are likely to stay connected even when they’re “off the clock.” On the flipside, since work and life are less separate in their minds, they want their work to be purposeful, aligned with their values and personally fulfilling.
93% of Gen Z say a company’s impact on society affects their decision to be part of the organization.
Banks that take a proactive approach to ESG issues and involve employees in their efforts will be more attractive to Gen Z than employers that are purely profit-focused. Making a difference in the world is important to this cohort and a positive impact on society is not a differentiator; it is an expectation. Highlighting opportunities such as paid volunteer hours and participation in in-house ESG programs in your job descriptions should help to attract new employees to roles at your financial institution.
Self-care is also a priority for Gen Z. They watched their Gen X parents work long hours to get ahead and didn’t see their parents’ employers offer much advancement or loyalty in return. They will likely be looking for flexible working arrangements that allow them to take time off when they need it and work from home when it makes sense.
More than anything, retaining Gen Z employees will require companies, and especially legacy institutions like banks, to make them feel like they matter. Giving them responsibility, acknowledgment and opportunities to learn and grow will increase the chances of keeping them engaged and committed in the long run. This is not the generation of participation trophies; Gen Z is prepared to work—provided they believe their work will make a difference.
I’d like to wrap up this series with a few key takeaways to help commercial banks provide an exciting, future-focused and rewarding career path:
- Hire people with tomorrow’s skills rather than simply counting years of banking experience.
- Create a culture of cooperation and collaboration that breaks down traditional silos and facilitates both upward and lateral career moves.
- Give your people the opportunity to upskill and reskill so they can make the best use of technological advances and digitalization rather than become obsolete.
- Use mentoring and training to build your talent pipeline and provide a path forward for employees who want to grow their careers with you.
- Look beyond the paycheck to appeal to younger candidates who want to work for more transparent, supportive, socially responsible and flexible employers.
To discuss how to build a banking environment that attracts top talent and retains them for longer, contact me here. To learn more, read the full report, Commercial Banking Top Trends in 2022:Read report
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