Eng
Eng
Consultant, Digital Strategy
Changes in consumer needs and the business environment, as well as the rapid development of the digital environment, have revolutionized our economic and social activities in recent years. New forms of digital interaction and information exchange are challenging businesses and pushing them to embrace different digital solutions. The Covid-19 pandemic and associated economic uncertainty have brought this issue to the forefront, forcing many businesses to determine their current and future strategy on their own. To avoid value chain disruptions and meet ever-changing customer needs, companies are using digital technologies to create new digital services and business models, strengthening strategies and governance to support change. This complex combination of people, processes and technologies involved in constant change is what we can call digital transformation. Researchers agree that digital transformation is a holistic process of organizational change driven by digital technologies.
Over the decades, academics, managers and consultants have recognized that transforming organizations is difficult, and digital transformation is even more difficult, and have been trying to create different models for successful practice. They modeled the role of leaders who set a vision and unite employees around a shared vision, emphasized the importance of organizational culture in this process, demonstrated the negative impact of downward communication on digital transformation, and called on companies to listen to employees and involve them in change and create an environment conducive to the formation of new ideas. However, research shows that in most organizations, two out of three transformation initiatives fail. The more things change, the more things stay the same. ( “plus ça change, plus c'est la même chose” - Jean-baptiste alphonse karr)
In reality, most companies fail to follow established guidelines at some point in time. It is important for change managers to know how to manage change in a specific context. Understanding and analyzing different approaches to digital transformation is the best basis for managing the changes brought about by the digital context.
The concept of digital transformation (DT) is formed by the merging of personal and corporate information technologies and includes the transformative effect of new digital technologies, such as social, mobile, analytical, cloud technologies and the Internet of things. Some researchers understand digital transformation as the integration of digital technologies and business processes into the digital economy [Liu et. al. 2011) in a relatively broad sense, DT is perceived as a driver of change in all contexts, especially in the business context, and influences the improvement of all aspects of business (Kraus et.al, 2021). More precisely, digital transformation involves three organizational aspects: improving the user experience and changing its life cycle; Optimization of business processes and changes in organizational structure, which ultimately leads to the creation of completely new business models (Benlian et al., 2016).
Digital transformation is seen as one of the most real challenges regardless of industry. Although organizations understand its fundamental importance, they still face a number of obstacles that make it difficult to initiate digital transformation, let alone reap the benefits of this transformation. (Schuchmann & Seufert, 2015)
The growing number of opportunities brought about by the development of information technology also forces companies to “systematically identify new business opportunities at an early stage” (Kiel et al., 2016, p. 675) and requires managers to adapt to one or more business models, or even creating a completely new business model. In a recent survey on digital transformation (McKinse, 2018), executives reported that their leaders are “more engaged in digital transformation than ever before,” but at the same time they said that “their companies must first solve a number of organizational problems before how digitalization can have a truly transformative impact on their business.” In this context, it can be assumed that digital transformation de facto affects all processes within the company, as it influences corporate strategies and leads to the revision and adaptation of existing business models (Linz et al., 2017). However, the extent to which digital technology adoption impacts corporate performance and can lead to innovative business models depends on the resources and capabilities available within the company, and it will take time for business models to become more context-sensitive than technology models. Therefore, it is interesting what stages a business goes through on the path to digital transformation and how these stages should be managed.
The stages of digital transformation provide companies with different opportunities at each stage. The first two stages - digitalization (also called modernization) and general business transformation - involve changing the existing business and forming it anew. And the final stage focuses on creating new business and creating more value by opening up new opportunities. (E. G. Popkova, Y. V. Ragulina, A. V. Bogoviz, 2019)
Based on various literature and research works, it can be said that organizations face difficulties in all three stages and if the company moves to the next stage without completing any of the stages, the failure rate will be even higher.
The first step (digitalization) involves simplifying and digitizing existing business processes using so-called ERP systems. This could be a customer relationship management (CRM) application, supplier relationship management (SRM) software, or other applications to optimize supply chain processes; In terms of employee experience, this could be automating HR processes or providing employees with a self-service portal, etc.
Is implementing these digital programs enough to transform an organization? - of course not. But this step is a critical foundation for organizational strength and rapid return on investment. This allows businesses to make more complex investments in their digital transformation journey.
The second stage (transformation of the entire business) is an attempt to change the complex cross-functional value chain. Steps taken at this stage for employees can be flexible transformation, creating a culture of continuous learning and development, improving the quality of customer service, this can be done by moving the product to digital channels, creating an application with integrated payment methods, delivery systems etc.
Can we call this an attempt at transformation? - Yes. Adapting the traditional organizational structure to changes, introducing appropriate management models, and taking care of talent development are the most important elements for the success of digital transformation.
Business-wide transformations typically focus on improving existing operations. But when successful, they often open up new opportunities to create value, for example by opening new markets or finding efficient new ways of doing business. That's why business-wide transformation is functional and complex, and the experience and knowledge gained at this stage is critical for companies on the path to digital transformation.
The third step (creating a new business) involves taking advantage of new opportunities to create value and create additional revenue streams. In terms of user experience, this could be the creation of a new business model, such as from selling a product or service to a subscription-based business model. On the operations side, this could be the use of data and analytics to accurately predict the operational performance of products or systems.
“To improve is to change; to be perfect is to change often.” -Winston Churchill
If we rely on neuroscientists, it is important to consider how habits are formed and how our brains respond to changing habits. To do this, companies often use the 7C model (Fig. 1), which assumes:
During the transformation process, everything must be certain. To reduce risks, the roles of managers and leaders must be clearly defined. The goals of digital transformation must also be clear. Unclear goals can add to existing anxiety because employees won't know whether they've achieved the goal or how to measure their progress toward it. This means that goals must be specific and measurable. For example, a task given to employees to improve productivity could be formulated as follows: “Write four reports in the next quarter.” This way, they will know exactly what they want to achieve and identify strategies to achieve that goal.
For effective digital transformation, this process must be continuous. This means that the conversion does not stop once it has started. Companies should plan for the next changes and get feedback on previous changes.
Employees often need time to process new information because most of the information received is quickly forgotten by the human brain. If the information is reviewed after a few days, it is much easier to retain. Therefore, when introducing digital products into an organization, training must be conducted and continually evaluated to ensure it is effective and maximizes its benefits.
Leaders need to convey the message that digital transformation is inevitable and that the company will continue to thrive. This feeling of security and confidence will reduce threat anxiety in the brain. Communication and a sense of security will keep employees engaged in the change process, increasing the chances of success.
There are theories that say that forming a new habit takes time. Change happens more easily when done consistently and in small doses. Leaders may want to make big changes to the company, but if they are focused only on achieving the end goal from the beginning and do not begin to implement these changes in small steps, the change process can be very difficult and painful.
Because the brain is a social organ, people can find comfort in interacting with others. Leaders can empower employees to create more work-oriented teams. In addition, it is necessary to involve them in the digital transformation process. Employees are more adaptable if they feel like they are the decision makers.
Many people may feel uncomfortable in a turbulent environment when a company changes. They may doubt their competence, their abilities, etc. This can lead to increased anxiety and depression. In contrast to these feelings, leaders must ensure that their employees' self-esteem increases. They need to show that employees themselves control the processes, make choices about what tactics to use to achieve the goal, etc.
Communication is key when it comes to transformation. Employees want to feel like they have a voice and that their voice is understood. When making changes, it is necessary to create platforms where employees will have the opportunity to share their opinions and be part of the changes as much as possible. Leaders must show empathy during stressful times and connect with employees on an emotional level. This communication can take the form of surveys, feedback sessions, or one-on-one conversations.
True transformation requires new ways of working, in which leadership plays a critical role as it involves moving from an existing operating model to a new one. Therefore, it is extremely important to have leaders who are well-versed in modern technology.
It is recognized that the top management of a company is responsible for the major strategic decisions of the organization. Senior management involvement in driving digital transformation and innovation management is an important part of corporate commitment to a company's strategic efforts and is positively correlated with the successful implementation of digital initiatives. Involving executives in transformation is critical because their specialized knowledge, skills, and experience are typically the greatest and most important organizational resources. Existing experience reveals the role of the executive, especially in conditions of high uncertainty.
One of the most important roles of chief executive officers (CEOs) is to mobilize employees to contribute to the company's strategic goals. In recent years, the concept of transformational leadership has become relevant, which promotes intellectual stimulation, creates idealized influence, inspires motivation and stimulates innovative growth. Transformational leaders manage to initiate reforms in the organization at a strategic level, inspire and guide people towards these changes. These leaders create organizational culture by placing greater emphasis on a shared vision, which leads to shared values between the company and its employees. In an organizational culture with such shared values, achieving a common goal is achieved much more effectively than in companies where there is no agreed-upon vision. Organizational development researchers argue that transformational leaders play a key role and have a significant impact on organizational culture and values. The role of leaders in bringing about change in their companies is essential, which means that without leadership there can be no change. They play a decisive role in accelerating or slowing down organizational change, so their tasks during a change management strategy can be formulated as follows:
Develop an organizational culture that encourages innovation at all levels. Creating an organizational climate that supports innovation and change is an important step forward for companies. Human capital, which is unique to every organization, needs to be encouraged. Management must address two broad issues. First, leaders need to understand the impact of their role behavior on digital transformation stakeholders. The second factor is the ability of leaders to cope with high levels of uncertainty while simultaneously stimulating innovation.
Digital transformation is impossible without thinking outside the box. Attention to creativity and divergent thinking has been especially focused in the 21st century, when the development of information technology has revolutionized our lives, work processes, communication, behavior, etc. Today, pragmatic and straightforward decisions are no longer valued as highly as they were during the development of manufacturing. According to research, as people reach adulthood, divergent thinking decreases, so people begin to think routinely and repeat what they have learned. Therefore, in the workplace, it is the responsibility of leaders to encourage the generation of original ideas and creative thinking. Since employees are given the freedom to innovate their tasks, it leads to both motivation and enthusiasm to work consistently and achieve innovative goals. The only serious problem with this process occurs when it is not supported by a strong value system in the organization that can guide activities in accordance with the overall goals of the organization.
Set short-term goals and celebrate small victories. Successful and sustainable digital transformation takes time, which means the distant prospect of an end goal may not motivate employees. Therefore, leaders must create an environment conducive to early success and visible improvement. Small achievements like these make many people feel enthusiastic and motivate them to do better.
Making transformation a personal goal. People are generally more enthusiastic about something when they think it was their idea than when they are assigned to do it. Therefore, if managers care more about a particular initiative, employees perceive it as their own. However, when employees understand how digital transformation improves their work processes, it becomes clear that their contribution to achieving the transformation goal increases.
Monitoring progress is not only beneficial for all stakeholders involved in a digital transformation project, but is also critical to strategy development. Key performance indicators and transformation management indicators highlight strategy weaknesses. By understanding what works and what doesn't, leaders can adjust the plan.
Too often, senior management forgets that they are not the only role models influencing employees; Informal leaders in organizations may have less influence on the energy levels of their colleagues if they are excited about the change agenda. Regardless of their official title and status, attracting such people increases the likelihood of change success by 3.8 times.
References:
Liu, D.Y., Chen, S.W., Chou, T.C. (2011) Resource fit in digital transformation: lessons learned
from the CBC Bank global e-banking project. Manag. Decis. 49(10), 1728–1742
Kraus S., Jones P., Kailer R. , Weinmann A., Chaparro-Banegas N., and Roig-Tierno N. (2021) Digital Transformation: An Overview of the Current State of the Art of Research
Benlian T. H., A., Matt, C., Wiesböck, F. (2016) Options for formulating a digital transformation strategy. MIS Q. Exec. 15(2), 123–139
Schuchmann, D., Seufert, S. (2015) Corporate learning in times of digital transformation: a conceptual framework and service portfolio for the learning function in banking organizations. Int. J. Adv. Corp. Learn. (iJAC) 8(1), 31–39
Kiel, Daniel & Arnold, Christian & Collisi, Matthias & Voigt, Kai-Ingo. (2016). The Impact of the Industrial Internet of Things on Established Business Models.
Dr. Linz, Carsten & Müller-Stewens, Günter & Zimmermann, Alexander. (2017). Radical Business Model Transformation: Gaining the Competitive Edge in a Disruptive World.
https://www.mckinsey.com/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/successful%20transformations/december%202021%20losing%20from%20day%20one/losing-from-day-one-why-even-successful-transformations-fall-short-vf.pdf
https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/digital-transformation-on-the-ceo-agenda
I really love to travel, I try to visit a new country at every opportunity, for the last four or five years all the stories of my vacation abroad are connected with Germany, the reason is my friends who moved to Germany, who settled in different regions of Germany in search of a better life.
It has become a trend around me when people close to me go or try to go to different developed countries, their main motive is to get better opportunities and quality of life, and the term of departure is indefinite or permanent - Anita, 27 years old: "I went abroad because life in Georgia every day is a struggle for self-preservation, there are social, economic and mental factors.I don’t want to spend my whole life fighting for survival, I want to enjoy life and be in an environment where I can develop, learn, have fun, etc.”
The list of long-term top reasons for leaving the country, cited as environmental ones, is long and includes mostly socio-economic factors: high cost of food and basic necessities, high real estate prices, low incomes, and so on. ., the feeling of hopelessness created in the country is important. Lack of access to relevant services is also related to the unstable atmosphere and the general geopolitical situation.
Due to the urgency of the problem, the ACT team decided to study the attitude of the population towards migration, their experience, as well as collect official information related to this issue, which we share with you, readers.
To see the overall picture of migration, we reviewed the official data obtained by the National Statistical Service of Georgia. According to the National Statistical Service of Georgia, 125,269 people emigrated from Georgia in 2022, it should be noted that most of them - 80.5% (100,802 people) were citizens of Georgia. The research team contacted Sakstat to find out for what purpose, for what type of work and to which countries the population emigrated from Georgia in 2022, but this information was not available. As for the level of immigration, according to the National Statistical Service of Georgia, the number of immigrants in 2022 amounted to 179,778 people, among them the share of Georgian citizens was 30.3% (54,405 people).
How to explain the positive balance of migration?
Although the number of Georgian emigrants exceeded the number of Georgian immigrants by 46,397, in 2022 the migration balance was positive, with 54,509 more citizens entering the country than leaving. The number of immigrants who arrived in Georgia from the Russian Federation in 2022 exceeds the number of immigrants from all other countries and amounts to 62,304 citizens. The number of people who migrated from Ukraine is high - 20,716 and from Belarus - 13,316. In total, in 2022, only the number of Georgian emigrants exceeded the number of immigrants, which suggests a positive migration balance due to the influx of citizens of other countries. Among them, the number of citizens of the Russian Federation is at least three times higher than the number of immigrants from all other countries.
Green card
With a positive growing migration balance, the population of Georgia is looking for different ways to leave the country. One of the most common forms of emigration from Georgia is participation in the drawing of a green card. There has been an increase in the number of people around me who have completed the green card or are considering moving to the United States of America as one of their alternative plans for the future. We were interested in the number of participants and green card holders from Georgia in the green card draw. According to the US State Department, from 2011 to 2021, the number of Georgians trying to get a green card almost tripled, from 39,253 to 112,464. In 2022, 2,071 Georgian citizens won a green card, and from 2002 to 2022, that figure reached 18,737. Eka, 43 years old: “I applied for a Green Card several times with my husband, I want to go to America for employment.” I have a job in Georgia. I also want to live and work in my country, but I feel unstable and insecure both in front of myself and in front of my husband. The reason for our departure is low income and unstable work. The backwardness of the country and the lack of future, development and progress.
My sentiments about emigration coincided with the opinion of the majority of the population, the results of the EITI survey showed that the majority of the population of Georgia - 83% share the opinion that over the past 3 years the number of people who left Georgia to live abroad for a long time or permanently has increased. 9 out of 10 respondents believe that the main purpose of leaving is to find a job. As for the reasons for leaving, according to citizens, the outflow from the country is mainly related to social and economic factors: low pensions and incomes - 69%, lack of jobs - 62 %, expensive goods and services (food, clothing, etc.) - 42%. Almost one-fifth of the population - 18% - emphasizes the availability and low quality of health care, for 16% the main reason for emigration is a sense of social hopelessness.
As for the actual experience of respondents traveling abroad, over the past 3 years, every second respondent-citizen or a member of his family, or a respondent with family members, went abroad. It should be noted that this experience is more common in Tbilisi - 56% than in the regions - 41%. More than half of the respondents and/or their family members - 51% went abroad to work, a quarter of the respondents - 25% for vacation. 43% of those who left the capital went on vacation, and the bulk of the region's population - 61% - went to work.
Recently, I have been considering going abroad as one of my future plans, for me it is more of a “forced alternative” than a real desire. It turned out that a quarter of the respondents - 25% also have a desire to leave for a long time or forever. The main reasons why respondents want to leave for a long time or permanently are still related to socio-economic factors, a relatively small number of respondents named such factors as a sense of hopelessness in society - 14%, inaccessibility of education or its low level. quality - 13%, inaccessibility of medical services or low quality - 12%, it is worth noting that access to education and medical services is relevant for most of the population of Tbilisi.
Due to the increase in immigration of foreign citizens, my Georgian friends/acquaintances are leaving for developed countries in search of a better life, mainly to Germany or the United States of America. According to the ACT study, one fifth of the respondents who want to leave the country for a long time or permanently, mainly go to Germany (20%) and the United States of America (20%), it should be noted that the number of people who want to go to Germany in the region is relatively large and amounts to 23 %, and a quarter of respondents from the capital - 30% want to go to the United States of America. Every third respondent (28%) finds it difficult to say where he wants to go for a long time or forever.
As for the prospects for the return of the Georgian population who left for emigration, every fourth (39%) respondent believes that the population who left the country will never return, this opinion is shared by half of the population of Tbilisi - 49%.
Despite the problems in our country, my favorite part of every trip is returning to Georgia, I often wish that the conditions, the environment would make me want to return to Georgia, and not very subjective reasons, although I am also aware that we are creating such environment together, of course, first of all by the mandate of trust that we give to those who are responsible for creating this environment, and on the other hand, by active civic activity, with the help of which we contribute to maintaining this responsibility.
Research methodology: ACT conducted a population survey on issues related to migration in June 2023. The study involved 801 randomly selected citizens of Georgia aged 18+. The average statistical error of the data is 3.5%. The method used is a telephone survey.
According to the Sakstat methodology:
Emigrant
A person who left Georgia and stayed in the territory of another state for at least 6 months (183 days) during the last 12 months. This number of days can be cumulative over several trips abroad.
In addition, for this person who left the country, Georgia must have been the country of permanent residence (i.e., he must have spent at least 6 months in Georgia in the previous 12 months before leaving the country).
Iimmigrant
A person who crossed the border of Georgia and stayed in the territory of Georgia for at least 6 months during the last 12 months. In this case, it is also possible that this is the total number for several trips. In addition, Georgia was not his country of permanent residence (i.e., he had spent at least 6 months outside of Georgia in the previous 12 months).
Migration balance - the ratio of people leaving the country and entering the country.
Sources:
1. https://publika.ge/2022-wels-saqartvelos-100-000-ze-meti-moqalaqe-wavida-emigraciashi-saqstati/
2. https://www.geostat.ge/ka/modules/categories/322/migratsia
The complexity, ambiguity and rapid change of the modern world are the biggest challenges for both individuals and organizations. Each of us feels the difficulties of adapting to change on our shoulders, and this pressure manifests itself in different ways in our daily lives, whether it be confusion, stress or burnout. One of the main questions of today is - how to deal with all this? What do we most need in order to achieve the desired results in the light of the current reality, without losing the feeling of fulfillment and happiness that comes from being involved in the process?
In Gestalt psychology, development (life in general) is seen as the interaction of the organism and the environment, as a result of which the personality changes and grows. This attitude is called creative adaptation. The contact of a person with the environment is the more creative, the less it is conditioned by rigid formulas and schemes. Accordingly, its growth and development is greater. Creative thinking is even more relevant in a world where the pace of change is accelerating and where artificial intelligence will replace many routine tasks. One of the major challenges facing modern organizations is how to build an organizational culture that encourages creative and growth-oriented thinking, where employees themselves are change makers, where they are created according to a clear vision and values.
systems and decisions are made. To better understand the benefits of creative thinking, let's take a closer look at how it differs from reactive (fixed) thinking, what determines their formation. First of all, it should be said that both types of thinking have different rules of the game and both games are an integral part of our reality.
Reactive thinking works according to the rules of the outer game. This is an orientation towards external reality, this is the development of knowledge and competencies that the environment requires from us. It is our existing knowledge and experience, managerial, technical and leadership competencies adapted to the requirements of the outdoor game. As a result, the so-called "traditional ways" of adapting to the environment are formed and strengthened. Fixed or reactive thinking. Reactive thinking is defensively oriented, trying to play in such a way that it doesn't lose. Every day more and more energy is required to respond to the changing and growing demands of the environment. During outdoor play, a person's sense of security and worth depends on external validation. Since any knowledge today becomes obsolete, and the environment sets new tasks for a person, external assessments also change rapidly and are unstable over time. Adapting to them requires a lot of energy from a person. As a result, anxiety and feelings of pressure increase.
Fixed or reactionary thinking (same external game) reacts to problems,
It is possible to reduce the severity of problems, but not to bring about qualitative changes. This is one of its main limitations. When the outer game dominates and the inner game constantly follows it, the result is increased stress and tension, and a decrease in human happiness. The external game finds a corresponding reflection in the organizational culture. In fixed mindset organizations, innovation and innovative approaches are not encouraged or implemented, they are intimidated by competition, and they struggle to maintain their position. In conditions of reactive management, the “language of guilt” is often used, there are frequent conversations about problems and endless attempts to find their causes, although they cannot be eliminated, there is no qualitative change in the context that caused the problems. The employee is uninitiated and waits for tasks, is afraid to make a mistake, so he does not take a step towards innovations. In such an organizational culture, the worker is lost and depressed, unable to develop and realize his creative potential. Hence, his engagement and happiness index is very low. As for the inner game, this is a process directed from the inside out, which is based on self-knowledge, awareness of one's own desires. The focus of the inner game is “what I want, what worries me”, and not “what I need, what they will tell me”. Accordingly, it is development-oriented, in which case a person contributes to the valuable work for him with his unique “I”, unique vision. A person focused on the inner game has a vision of the future and consciously takes steps towards it. Indoor games develop creative thinking. At this time, with each contact with the environment, the individual creates a unique experience, creating something that did not exist before. Creative Thinking "It's a game to win with all your heart, with nothing to gain and nothing to lose" (Larry Wilson, The Game to Win). The "inside game" does not depend on external debt. In such cases, failure is also an experience and, as a result, self-esteem is not destroyed. The internal game is a complex internal system in which the individual ability to give meaning (who we are and how we see our own identity, how we see our role in the world) is built; Decision-making process (what are the values and beliefs based on which we make decisions), self-awareness and a high level of emotional intelligence. Inner play, also known as the growth mindset, combines skills such as dignity, sincerity, high self-awareness, cooperation, courage, humility, intuition, inner wisdom. It is these qualities that are vital for us to grow and develop in contact with the environment, and not vice versa, to be repressed and become hostile. These character traits develop creative abilities in us and create the right ground for the development of new competencies, a better mood, interest and openness.
Those organizations that focus on the internal game, attach the greatest importance to the vision and values, the coincidence of the values of the organization and the employee. Such organizations create space for development, gaining new experience, introducing innovations. Teamwork and collaboration are encouraged. In such a culture, they promote self-awareness and action with conscious motivation, choosing things in accordance with the interests of the worker. Welcome openness, changes and support each other in these changes. Today's complex, fast-paced and ambiguous reality requires individuals and organizations to pay more attention to the inner game as it is a more reliable system to navigate. Establishing a healthy relationship with the environment without a strong internal play structure is unthinkable. Understanding the importance of the internal game for the leaders of the organization and readiness for transformation is the first step, although the successful transformation of the organization is possible with an integrated approach, consistent and daily work. It is a process involving continuous and often painful decisions. Proper assessment of this process and appropriate preparation are prerequisites for the desired change. For simplicity, we can say that the successful transformation of the organization is associated with consistent changes in all three areas (vision, organizational culture and performance systems) and maintaining their balance. We share this approach in ACT, in the direction of management consulting ACT offers organizations a successful transformation model POWER3. The balance of the three forces achieved in the process of transformation can become a prerequisite for a harmonious transition to the inner game. Finally, if we can move from reactive thinking to creative thinking, we can create a vision that best aligns with our inner values. Values will energize us and give us the strength to master every day the work that best expresses our core message and brings us closer each time to the vision we created.
Work-life balance, fair pay and equal values are what Generation Z wants and is willing to leave the company if they don't get it.
It's probably no news that Gen-Z, the generation born between 1997 and 2012, is the most popular generation at this stage, making up a third (30%) of the world's population. And this means that the share of their capital in the labor market is large and in the coming years this figure will increase even more (by 2025, their number in the labor market will be 27%). But what do they want in terms of career and what values are important for Gen-Z when choosing an employer, and have employers thought about this?
Technological changes and the establishment of new norms in the work process lead to transformations, both at the organizational and individual levels. Technological developments are changing the rules of work in and of themselves, but perhaps a more important change is the arrival of a new generation on the scene who plans to act on their own rules and leave a new mark on the employer-employee relationship.
Leading companies have already begun to take care of how to attract the talents of future generations. “Generation Z is an important part of the ACT workforce. They are the future of our company and country, and we are well aware of how to meet their expectations, which are somewhat different from the expectations of other generations. Their demands naturally flow from their core values: freedom, equality, an inclusive and sustainable environment. They do not want to work in companies that do not recognize equal, fair approaches and attitudes towards any employee in all aspects: communication, labor relations, development, career growth, salary, etc. It is also important for them to create a diverse and inclusive environment, which implies such an involvement of the employee in the organizational context, when he gets the feeling that he is accepted, respected and understood, taking into account his unique personality, abilities and experience. ", - Tea Shamatava, Head of Human Resources and Organizational Development, ACT.
How is Gen-Z different from previous generations and what do they want?
While everyone wants to do interesting work with decent pay and conditions, to have the opportunity for career growth and development, there are still several characteristics that distinguish Gen-Z from their predecessors: millennials, generation -X and baby boomers. This is the first digital generation that grew up with little or no memory of a world without technology and the Internet. This generation has been called the first "Global Generation", a member of a society where access to global content and information is more free, and e-commerce activities from anywhere in the world are considered the norm. Therefore, for them, remote work, freelancing and finding the right career opportunities for them is a familiar process. You might think this is a generation motivated by more pragmatic comforts and guaranteed wages, but that's not always the case.
Generation Z talent emerged when flexibility is not only possible but inevitable, digital connectivity is ubiquitous, and employees have more power to demand what they want from companies. According to a recent RippleMatch report, Generation Z can change jobs 10 times between the ages of 18 and 34. The old concept of a career ladder that starts at the lowest rung and ends at the executive rung can be replaced with something more flexible. According to the 2022 TalentLMs survey, 82% of working Gen Zers prioritize work-life balance and mental health, while 74% choose hybrid or full-time remote work. Seeing that other generations in the workplace are constantly running out of time, burn out at work and lack adequate economic security, Gen Z is demanding more free time, the ability to work remotely, and greater social responsibility from organizations. After poor pay, burnout and a lack of work-life balance were the top reasons they quit. Many of these values were millennial preferences, but for Generation Z, this is a need, this is what they expect from their employer, and if their demands are not met, they will leave the company. Often referred to as the anti-capitalist generation, Generation Z wants everything at once, but at the same time is ready to spend as much as possible in the workplace for the right employer.
According to popular belief, this is simply a generation that responds to contemporary social movements and makes good use of the lessons learned by the previous generation in the career planning process.
In the GOBankingRates survey, 19.6% of Gen-Z's other priorities are career passion, while 16.5% are salary. Although in some cases other benefits were mentioned before the financial interest, salary still matters a lot among the young people interviewed. They want to work in jobs that interest them and earn a fair salary, and they also want to feel connected to their organization. For businesses, this means they need to be transparent about building their employer brand, talking loudly about the benefits they offer to employees, and how they create a positive work culture. This means that employers will have to change their strategy for attracting, hiring and developing talent, which will lead to changes in the labor market as a whole and will benefit not only this particular generation, but any generation.
Where is the disparity between Gen-Z and employers?
In a 2023 Deloitte Digital study, Gen-Z employees and their executives were surveyed to see if they understand each other's priorities. As a result of the study, three main problems were identified:
• Conflicting views on the meaning of empathy
Gen-Z values their leaders' empathy and sees it as a necessary condition for engagement, but managers surveyed did not find empathy as valuable. It is important for this generation to be seen as a personality in the workplace and not just a KPI force.
• Different views have emerged on the impact of work on mental health.
Representatives of Gen-Z believe that their mental health is not properly maintained. Their ideas about how work affects mental health differ from those of their leaders. Less than half of respondents say that their supervisors help them maintain a normal workload, and 28% believe that they have mental problems because of the boss. It is vital for them not to think about work after hours and not feel overwhelmed.
• Different ideas about the importance of work in defining personality.
Gen Z views work less as part of their identity, while for most of their managers, this connection is strong, and for 86% of them, work is part of their identity.
The reasons for this gap of different views can be:
• Management doesn't understand what Gen-Z wants
• Managers are aware of the desires of generation Z, but do not agree with them
• Both groups agree that changes are needed, but there is no clear vision of how these changes should occur.
To fill each of these gaps, leaders must take different actions, and these actions necessarily involve change. Generations and their values change, which naturally leads to corporate and organizational transformations. In this process, it is vital for modern companies to communicate more with employees, ensure their involvement in the decision-making process and create platforms where they can express their opinion on a particular issue in the organization.
A catalyst for change?
Each generation has its own unique style, needs, goals and characteristics. That's why it's so important to create an environment where all employees feel engaged, inspired, energized and able to express themselves, collaborate and learn from each other. This is why it is important for companies to offer first work experience programs such as internships and various project opportunities. Instead, Generation Z brings new skills, innovative ideas, and diverse perspectives.
Every generation changes the workplace, from the arrival of women in the workplace during World War II, to millennials who have raised awareness of fundamental issues such as mental health, equality and inclusion, decent working conditions, and more. But Gen-Z as a workforce is emerging after the historic Covid-19 pandemic and at a time when fundamental changes are taking place in terms of technological development, values are changing and people are no longer dependent on one employer, so what Gen-Z is looking for and what they prioritize today is likely to largely determine the labor market and lead to long-term change. Preparing for change starts today.