Gen Z increasingly withdrawing labour from unethical employers

Amid the ‘Great Resignation', companies often struggle with recruiting talent from Gen Z. Hiring young talent increasingly requires an effort to boost the ethical profile of workplaces.

Business cannot afford to ignore purpose-led consumption anymore. UK residents of all ages are increasingly concerned with investing in companies, not just because of the services or products they supply, but which embody ethical ideals. This is particularly the case among Generation Z or Gen Z.

The demographic cohort after the Millennials is set to make up a huge proportion of the global consumers by the end of this decade. Research has shown that Gen Z especially values animal welfare, human rights, and environmental sustainability – and will quickly change its consumption habits if they will have a more positive impact by investing money elsewhere.

This is not only true of the way Gen Z individuals behave as consumers, however. They are also much more discerning about the kinds of company they will invest their labour in. New research from insurance group Bupa has shown that 68% of Gen Z feels anxious about environmental issues – more than any other (which makes sense as they will be alive longest, and subsequently may see its worst impacts) – while 63% feel the burden of climate change on their shoulders. The research took in the opinions of 2,000 consumers of all ages, and found that in comparison, just 37% of Gen X and 28% of Baby Boomers felt the same way, in spite of the large contributions their respective generations have made to the climate crisis.

Following on from this, a majority of the generation is unwilling to supply its energy to employers who are failing to confront their environmental impacts. In a tightening labour market, where competition for talent is fierce, 64% said it was important that employers act on environmental issues – and a further 31% stating they would turn down roles with firms that had poor sustainability and ethics credentials. Meanwhile, 54% said that if they were in a role for an employer that did not take action on ESG issues, they would take a pay cut to join a business in keeping with their ethics – should the opportunity arise.

Speaking on the findings, Dr Pablo Vandenabeele, Clinical Director for Mental Health at Bupa said, “A high salary for work that feels meaningless can only satisfy one for so long, whereas feeling like we're contributing to the greater good and making a difference has a positive effect on our self-esteem. It can even reduce feelings of burnout, something that many people are struggling with after a tough couple of years.”

Further illustrating this, Gen Z respondents told Bupa that seeing their employers fail to take ESG action was affecting their mental wellbeing. A sizeable 43% of the generation said as much. More generally meanwhile, 68% of Gen Z are anxious about climate change – compared to 63% of Millennials, 62% of Gen X and 65% of Baby Boomers.

Mental ill-health costs UK businesses £45 billion a year, according to a recent study by Deloitte. If that weren’t enough of an incentive for employers to take their ESG credentials more seriously for the sake of their new employees, the face that Gen Z are evidently prepared to prioritise their mental health over their earnings should more than convince them. As firms look to enjoy the boost of the post-pandemic recovery – whenever that actually materialises – those who cannot find the staff to meet the growing demand of their market space will struggle to rebound.

Sally Pain, Chief Sustainability Officer at Bupa, added, “The pandemic has underscored the inextricable link between healthy people, a healthy planet, and business performance. For Gen Z, workplace wellbeing is now a critical part of the ESG agenda. As skills shortages bite across many sectors and businesses face a challenging year ahead, it’s easy to think that social and environmental commitments are optional. Our research shows that they are quickly becoming critical to success. For companies who want to build and nurture future leaders for their business, investing in strong targets that connect with their employees’ personal values is vital.”