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Generation Y

The Turnover Tsunami: Prepare For The Post-Recession Workforce

Four years ago, generous benefits and opportunities for advancement convinced many employees with advanced degrees to work for hot companies dubbed the best places to work — places like Starbucks, for example.

Four years ago, generous benefits and opportunities for advancement convinced many employees with advanced degrees to work for hot companies dubbed the best places to work — places like Starbucks, for example.

Starbucks built its global brand on a building boom so exuberant that it was lampooned with this 1998 headline in the Onion: “New Starbucks Opens in Rest Room of Existing Starbucks”.

The chain boasted more than 10,000 U.S. cafes, some across the street from each other, when the expansion hit a wall in late 2007. With the coffee chain in the midst of a building binge the worst downturn since the Great Depression hit, hammering Starbucks’ bottom line.

Reuters reported in November that employees interviewed felt Starbucks’ recent efforts to boost quality and standardize tasks have piled on extra work, adding an assembly-line feel to their jobs. On top of that, in 2009 they lost their one personal day per year. The company also took away their ability to earn 40 hours of vacation in their first year and cut the maximum for years two and three in half to 40 hours.

Bottom line: The disappearing perks and the financial fixes have dampened employee enthusiasm. As a result, Starbucks is dangerously close to being ‘just another coffee shop’ with minimal mojo and few benefits.

This disillusionment may be early signs of a culture change that could strike at the heart of what makes a great place to work great. In the Starbucks example, it was that warm, fuzzy feeling stemming from its original commitments to the global community as well as its own healthy, happy staffers who provided service with a smile.

Indeed, Starbucks has survived the economic crash. Shares in Starbucks Corp have nearly tripled which makes Wall Street happy. Sharp cost-cuts, the introduction of corporate efficiency tools like scheduling software, and an increased emphasis on pushing product sales have helped the company return to record profitability.

But for investors and management, the question is whether Starbucks can keep growing if the Starbucks culture unravels.

The Starbucks culture isn’t the only one in danger of unraveling. One thing is for sure — employees everywhere are not happy. The stress of the economic recession has taken a heavy toll, not just on those laid off, but also on the survivors who shoulder the burden of the resulting staffing gaps.

Consider this:

  • Worker satisfaction is at its lowest level since The Conference Board began measuring it in 1987.
  • Four out of every five workers are planning to, or at least contemplating, leaving their current employer, according to a recent survey by human resource consultancy Right Management.
  • In October, the US Bureau of Labor Statistics reported that the number of employees voluntarily quitting their jobs had eclipsed the number terminated through layoffs and other types of discharges.

For the past two years, companies have focused on survival and cut costs and staff. But the recent upswing in voluntary leaves could signal a shift in the job market, requiring companies to focus less on workforce reduction and more on employee retention and engagement.

As the job market improves, all of the pent up turnover that’s been festering in companies since 2008 will start being released. Businesses will face a new, post-recession challenge — a turnover tsunami that could sap them of their talent and wash away any prospect of improved performance.

As challenging as this will be, forward-thinking employers will capitalize on that dislocation to draw talented individuals into their ranks. For them the question won’t just be “how do we keep the best people,” but also “how do we attract them?”

This is easier said than done in a post-recession workforce. Even the companies once renowned for being great places to work–companies like Starbucks—are trying to rebuild their reputations and relationships.

Here are four ways your company can start shaping a more distinctive candidate experience, from how you market employment opportunities to how you measure recruiting success:

  • Articulate a purpose. Purpose-driven branding is about defining your company’s reason for being in terms that transcend mere profit and market share. People will be attracted to a career opportunity that provides greater meaning and purpose in their lives.
  • Market the opportunity. Craft talking points and company overview materials that highlight what is distinctive and different about working at your firm. Create job titles that convey the purpose and importance of a role.
  • Communicate considerately. If there’s one thing candidates yearn for (other than getting the job), it’s timely and relevant feedback. From acknowledging receipt of a resume right through to conveying a hiring decision — be thoughtful and responsive to candidates.
  • Set up listening posts. Gauge success not just with recruiting outcomes, but also with candid, unfiltered feedback from recent candidates. Have an independent party solicit feedback from new hires about the candidate experience.

The next year is likely to bring entirely new workforce challenges, partly due to turnover and partly due to exiting. The recession placed many retirements on hold, which means there is an abundance of people eligible to retire who are still working. The rebounding economy is likely to spur a retirement wave.

Be prepared for what the next year will bring. Stand out from competing employers by shaping your candidate experience as carefully as you would shape that of your customers. Focus on employee retention and engagement to reduce turnover and attract and keep good talent.Do this and you won’t just weather the employee turnover tsunami, you’ll come out stronger for it.

Zs came of age in an era of disruption

In many ways, it’s symbolic that Generation Z is named after the last letter in the alphabet because their arrival marks the end of clearly defined roles, traditions, and experiences. After all, Gen Z is coming of age on the heels of what has been referred to as the most disruptive decade of the last century. America has become an increasingly changing and complex place.

For example:

  • ‍Zs were born into a “modern family era” in which highly involved dads help out at home, and the nuclear family model (two parents, married, with children) represent only 46% of American households.
  • ‍Zs are the first generation to be born into a world where everything physical, from people to places to pennies, has a digital equivalent.
  • From the time they were infants, Zs had access to mobile technology. As a result, their brains have been trained to absorb large amounts of information, and Zs are especially adept at shifting between skills and subject matter.
  • Zs tend to have crystal-clear memories of sitting up for the first time at six months old because they can easily and quickly reference the photos and videos their parents shared on social media or saved in the “cloud”. 

Members of this generation have undoubtedly been shaped by crisis and disruption. This generation will largely be responsible for confronting the aftermath of the Great Recession, high youth unemployment, the effects of climate change, terrorism, energy sustainability, and more. These dark events have undoubtedly made this generation more cautious and pragmatic, but they have also provided this generation with the inspiration to change the world – and their grit will likely allow them to do it.

Coming of age during disruption means that most Zs will be comfortable being the disruptors. While Millennials tend to be collaborative and innovative, this generation tends to be sincere, reflective, thick-skinned, and self-directed, and will likely approach work in much the same way.

Zs were raised to be competitive

In the era following World War II, Boomers (1946-1964) were born and eventually became the wealthiest, most prosperous generation in history. Raised to aspire for the American Dream, this very large generation moved into positions of power and influence, and served as the workforce majority for 34 years.

With the American Dream alive and well, Boomers had no reason to teach their children, mostly Millennials, about competition. Instead, they taught them to focus on academic achievement and to be team players because if everyone works hard, everyone can win.

Enter Generation X (1965-1981). In contrast Boomers, Xers came of age during a time when change and economic and political uncertainty began to take root. They have lived through four recessions, struggled with debt and economic decline most of their lives, and watched the best educated and accomplished generation of all time (Millennials) graduate during the Great Recession and become the most debt-ridden generation in history.

Gen Xers can be defined by their independence and anti-status quo approach to life, and they have taught their Gen Z children to be competitive, believing only the best can win. They have encouraged their children to be realists, finding something they are good at and aggressively pursuing it.

Xers have raised their Zs with an intense focus on competitiveness -- in academics, sports, and other activities. This approach to parenting has many implications, but one stands out in terms of business: Gen Z is likely to lead.

Millennials in the workplace created and aggressively advocated for collaborative work environments. In fact, their aversion to leadership has been so strong, some Millennials sought out companies that boasted boss-free or team-managed workplaces.

In contrast, Zs have been raised with an individualistic, realistic, and competitive nature. They have been taught the skills to successfully defy the norm. This means we’re going to see the pendulum shift away from collaborative workplaces towards a widespread demand for, and pursuit of, leadership development.

Zs are career-focused.

While Millennials have been criticized for their “delayed adulthood”, Gen Z is showing signs of “early adulthood”. Educators and parents often describe this generation as being more serious and contemplative about the world. Zs are thinking about their career paths and exposing themselves to career training at an earlier age than Millennials. It’s probable that some of this early onset of adulthood is caused by parents, who are pressuring their children to be competitive and successful and to avoid the debt that plagued both the Gen Xers and Millennials.

The numbers from our global research found 46% of Gen Z said they know what career to pursue and 51% have taken a class at school focused on their career interests. Forty percent joined an extracurricular program (team, club) based on their career interests.

Zs are seeking financial security. 

Zs have been shaped by the aftermath of the Great Recession. They watched Millennials become debt-ridden and are concerned about falling into the same trap. XYZ University’s survey results show 66% of Zs said financial stability is more important than doing work they enjoy, which is the exact opposite of Millennial survey results.  Also, 71% of survey-takers have a paying job.

Zs value leaders who are positive and trustworthy.

When presented a list of leadership traits, Zs ranked positive and trustworthy the highest. While Millennials and Gen Zs both value trust in a leader, Millennials usually cite collaboration and vision as most important. In other words, Millennials focus on the outcomes leaders inspire, whereas Zs are more likely to consider leaders’ attitudes and personalities. To Z, what leaders encourage others to do isn’t as valuable as how they make them feel.


Zs want to be challenged.

Both Millennials and Gen Zs place a very high value on feeling challenged and appreciated in the workplace. However, according to our survey results Millennials rank appreciation slightly higher than challenge, whereas Zs rank feeling challenged slightly higher than appreciation.

Time will tell how Zs go down in history, but we know this generation’s influence on history will be unlike any other.


Does your organization have what it takes to engage the next generation? Take this quiz to find out.


Sarah Sladek is CEO of XYZ University. Our generational intelligence can assist you with engaging and retaining young talent and members.

Sarah Sladek

Concerned about declining engagement in our nation’s membership associations, non-profits, and workplaces, Sarah Sladek founded XYZ University, the nation’s first and only generations-focused training and engagement strategy company, in 2002.

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