Gen Z - Key Characteristics no.3 - Pragmatic
This is part of a series of blogs on Generation Z. Over the course of these blogs and through the talk I have put together I explain:
how and why Generation Z is different, naming seven key characteristics
the challenges this presents for leaders and organisations
the actions not only to overcome those challenges but ensure future prosperity.
Gen Z is the most important generational shift yet. Their experiences and outlook are not understood well enough by those who have come before them. Generation Z has huge, as yet mostly untapped, potential to meet the challenges of today.
Of all the key characteristics of Gen Z I describe it is this one which raises eyebrows the most often. To others, pragmatism does not sit well with what can be hardened perceptions around idealism, entrepreneurial spirit and a general sense of entitlement. I will deal with all those perceptions across the full series of blogs, and one of them here in particular.
Beyond that I would say that pragmatism is not just a key characteristic, but also one of the true standouts. If you want to understand this generation, you really need to understand this.
Solopreneurs
In recent years there has been an explosion in individuals setting up their own businesses and other enterprises. The graph below shows one well-known example.
Undoubtedly the pandemic has been a significant influence. When faced with time on their hands, and uncertainty over future prospects, millions took the plunge and sold their talents online.
The number of individual Etsy sellers had already increased substantially in advance of the pandemic. Some of this can be attributed to growing awareness of the platform and the means of using it. By 2012 Etsy was already seven years old. In the seven years that followed the number of sellers more than tripled.
This graph includes all sellers but the demographics are revealing as revealed in this report. It shows that 86% of Etsy sellers were women. More significantly in terms of this series, they were twice as likely to be under 35 than the owners of all other businesses. In addition, those on low incomes were also far more common. As has been stated elsewhere in this series of blogs, this most frequently refers to the young. Gen Z is a big part of driving the Etsy boom.
Etsy is just one example. Another is Depop, which describes itself as a ‘community-powered circular fashion marketplace’. Etsy is about the handmade, Depop rewards those with an eye for a bargain they can sell on for a profit, particularly vintage clothing. If any of this series is making you feel old, bear this in mind. For an item to count as ‘vintage’ it must be at least 20 years old. This brings the beginning of this century, millennium even, into the vintage category. All of this for a platform with 26 million users where 90% of its users are Gen Z.
New companies and dissolutions
The table below from Companies House shows the number of new companies (or ‘incorporations’ - dark blue) against the number of dissolutions (light blue) since the late seventies.
Over time technology has made it easier for new companies to be incorporated, but that does not wholly explain the steep incline within the graph. The number of new companies has not always outpaced the number of dissolutions, although those times are restricted to times of economic recession. The pandemic may have maintained and extended a trend, but it did not create it.
Companies House does not offer a demographic breakdown of directors and other ‘persons with significant control’. Given that many of the new businesses in recent years generate income through Etsy, or similar platforms, it is highly probable that the youngest generation are disproportionately represented here.
Furthermore the acceleration also coincided with them coming into the workplace. In 2020-21 almost half of all companies on the register were four years old or younger, and three quarters less than ten.
From one perspective this presents as entrepreneurial or, to use a modern phrase, solopreneurial. The difference between the two is that the solopreneur carries out all business tasks, whereas the entrepreneur contracts some out. Here are millions of people worldwide striking out on their own and deciding that they do not need to follow traditional work routes or careers.
Or are they?
Employment statistics
McKinsey’s 2018 ‘True Gen’ report contains some interesting statistics from their 2017 surveys of 17-64 year olds in Brazil, not least because they precede the pandemic.
The numbers on the left may fall dramatically for Gen Z but it does not represent the fall in employment it indicates. As McKinsey states it shows ‘a high preference for regular employment rather than freelance or part-time work’ for those so young. The oldest Gen Z was only 22 at this point, and the age bracket includes many still in full-time education. The oldest Gen Z was only 22. Note the upwards tick on the right for those in Gen Z who agree on the importance of a ‘job’, compared to Gen Y/Millennials.
For Gen Z of school age this goes beyond the paper round or Saturday shop work. It is also providing a more viable alternative to higher education, or means of supplementing its cost.
Attitudes
McKinsey’s report also states that Zoomers are ‘less idealistic than the Millennials we surveyed’ and said they were ‘keenly aware of the need to save for the future and see job stability as more important than a high salary’.
Recruitment website Monster carried a survey and found that
42% of Generation Z want their own business
Gen Z are concerned about long-term prospects
Gen Z have multiple streams of income out of necessity
It may not be a majority of Gen Zs who want their own business, but that figure is ten points higher than for any other generation surveyed.
The tools and technology may be in place for Zoomers, and anyone else, to go their own way through solo/entrepreneurship. These tools may feel more intuitive and reliable to a generation of digital natives which has grown up with such software. Despite that, it does not mean it is a safe option which can produce a reliable source of sufficient income. The Etsy and TaskRabbit type side gigs have not just become more popular because they can be set up quickly and easily, but because they are required to pay the rent and the bills. This is about supplementing an insufficient level of income to cover costs at modern levels.
A pragmatic response
As with any generation there are lots of examples of young, highly-enterprising individuals making their mark, some of whom are phenomenally successful. With the oldest Zoomer a few years off 30 at the time of writing it feels a little premature to judge if there are more than in any other generation. Having said that I do expect this to be the case, particularly as traditional ways of working continue to erode. A limited definition of ‘entrepreneur’ only referring business moguls setting up multi-million multinational companies will also continue to erode.
There are more Gen Zs with their own enterprise, and many of those businesses are very small. As with other generations some Zoomers not only have one side hustle, but a combination of them to form one overall income.
There is an element of hedging bets in all this. One issue from the pandemic is that some professions and trades were hit far more than others. The same applied to ‘casual’ employment or those who had not worked long enough in an organisation to have a greater level of employment rights which protected their jobs. Those whose line of work could go online did so, but many could not.
Zoomers are making decisions about their professional futures in the context of an economic outlook which is highly problematic. Even in the course of going from draft to final version of this blog it has got worse.
Significantly the pandemic has accentuated this, but did not create it. The decisions made by many Gen Zs to set up their own business has not been made with an expectation of a lucrative future, but of one where they may be able to attain what previous generations expected. The freedom offered by going it alone should not be underestimated either, including in terms of controlling working hours and conditions.
It is a more attractive alternative to what many have had in the workplace. Side hustles make part-time work a more viable option. I spoke to a group of Gen Zs in an organisation where the large majority of them were part-time. The organisation did not need them to be full-time, and this gave them the freedom to pursue other interests. Some of these involved work with each other elsewhere.
For Boomers, Generation X and perhaps many Millennials being an entrepreneur meant there was an intention of a future that was at the very least self-reliant, and ideally lucrative. Even the arguably more efficient model of solopreneurship needs to be separated from an expectation of prosperity, rather than survival. Gen Zs are simply making a pragmatic response to the circumstances in front of them bequeathed to them by older generations.
Other blogs:
Click for the first blog summarising who Gen Z are and why they are different.
And then for the Key Characteristics:
no.1 - Well-Behaved
no.2 - Prudent
no.3 - Pragmatic
no.4 - Diligent
no.5 - Apprehensive
no.6 - Diverse
no.7 - Patience
Accompanying videos are all here and also on YouTube
Click on the link to book Alex to speak at your event about Generation Z.
