Read the full report | 2023 EY Gen Z Segmentation Study
Understanding Gen Z’s rewritten norms and underlying expectations can serve as a beacon for businesses looking to cast a winning future.
Generations are borne from change. They are a reflection of the society they grew up in, and a framework for understanding how the world is supposed to work. We look at younger generations as a beacon to understanding the future that is coming for all of us. Understanding Gen Z’s wants, needs and aspirations now will help businesses effectively prepare for the shifting human needs and expectations that are already underway.
Gen Z, today’s 16- to 26-year-olds, represent just under 15% of the US population. But what they lack in number, they make up in influence.
Why? It’s a valid question. Most people over 35 don’t remember anyone caring much about what they thought when they were in their teens and twenties. But Gen Z is different in a few notable ways, as the 2023 EY Gen Z Segmentation Study reveals in the third of this series of proprietary research reports.
2023 EY Gen Z Segmentation Study: How is Gen Z different?
1. They hold the power of persuasion in their hands.
In a world where “media” is effectively preceded by “social,” younger people have found a voice previous generations didn’t have. Through ever-shifting digital platforms, outlets and apps, they are transforming society from their phones — largely due to an unprecedented, almost innate facility with technology.
2. Their collective voice is already reshaping how we all work, live and play.
As consumers, citizens and employees they have expectations of the organizations they work for and buy from, as well as the communities they live in — including transparency, fairness, authenticity and flexibility. And since they are the ones in the driver’s seat for the generations that follow as well, their concerns are consequential.
3. Money and mental health are in a pitched battle for balance as Gen Z square up to real-life considerations.
Their first two decades were shaped by 9/11, school gun violence, a massive recession and a global pandemic. Most report significant concerns about both their financial status and their mental health — which means how they earn money, how they spend it and how they spend their time are all inextricably woven and heavily influenced by digitally driven social forces that didn’t exist a decade ago. The line between success and survival is more blurred than ever before, and if there’s one thing Gen Z seems to share, it’s a determination to define it for themselves.
The diversity of Gen Z
The inaugural 2019 EY Gen Z Segmentation Study outlined five segments of this rising generation: Stressed Strivers, Big Dreamers, Authentic Activists, Secluded Perfectionists and Carefree Constituents. Our latest study examines how these segments are changing as Gen Z ages into new life phases.
In the third of our groundbreaking studies, we illuminate how these groups of young people continue to adapt to a changing world and how the world will need to adapt to them.
Worried about money
Gen Z continues to fret about money — how much they need, how to get it and what to do with it when they have it.
Of the 1,500-plus young adults surveyed, 52% report concern about not having enough money, and 39% are afraid of making the wrong choices with their money.
This drumbeat of anxiety has spawned a trend of financial pragmatism, including a return to traditional saving, earlier investing and a new propensity to juggle multiple jobs. Of those surveyed, 65% held a full- or part-time job last year, and nearly 40% held both a job and a “side hustle” to earn extra cash.
Employers of Gen Z need to recognize that this is not an all-eggs-in-one-basket kind of crowd, and, ideally, appreciate the varied experience, catlike tech reflexes and time management skills many young adults now bring to the table. As in previous studies, Gen Z’s top priority remains enjoying their work, although making money runs a close second as the cost of living keeps rising. And they’re getting more creative in their approach, using every tool in the shed as traditional, employer-driven career paths shift to individual-driven, strategic monetization of acquired skills, knowledge and experience.
Unbound by old standards
Gen Z is upending stigma and redrawing the boundaries of social norms. Topics formerly considered impolite or taboo, such as gender and sexuality, personal satisfaction with life and career choices, financial income, and psychological wellbeing, are commonplace conversation starters for this age group.
More than 90% of them place authenticity, or being true to oneself, among their highest values. They reject perfectionism in favor of realism, expecting inclusion and a sense of belonging they believe shouldn’t have to be earned. They’re born skeptics and shrewd observers, unafraid to question the status quo, and they’re not so sure about the long-term payoff of higher education that comes with a paper degree and a very real pile of debt.
Not surprisingly, only 34% of Gen Z believe they can “trust” large organizations or the federal government. They’re more likely to put their faith in individuals and small, localized entities they can actively engage with. And their spending habits follow suit, with 59% reporting they care about purchasing from companies that reflect their values.
Hiring companies should be aware that corporate transparency, authenticity and integrity will be assessed by Gen Z with a level of awareness that’s both unique to this generation and broadly shared among them, thanks in large part to their use of social media.
Generations provide a lens to help us understand societal changes over time and the business shifts required to keep up with evolving human needs.
Anxiety is the new normal
Stress levels are rising across all five Gen Z segments. The COVID-19 global pandemic didn’t help, clipping their wings just as many should have been ready to fly.
As in previous research, 42% of respondents said they usually or always felt anxious or depressed in the past year. But here’s a new twist: in the 2023 study, one of the biggest sources of Gen Z anxiety is not themselves, but the mental and physical health of other people in their lives, such as friends and parents. Forty-six percent of Gen Z surveyed said they were very or extremely worried about the physical or mental health of other people in their life, ahead of their own personal health (42%).
Worry has increased for all five Gen Z segments
Percent of Gen Z feeling moderately, very or extremely worried across a variety of topics by Gen Z segment
Gen Z are used to seeking professional help for mental health challenges — well over half did in the past year — and hiring companies should be aware that behavioral health care is increasingly an expected benefit for young employees.
Cautiously optimistic
Gen Z may be a bundle of anxiety, but they have some hope for the future.
Fewer than half think they will be able to live comfortably when they’re 30, but half believe they will when they’re 40, and most believe they will be as well off as their parents were by that time.
Gen Z is cautiously optimistic about the future
Meanwhile, they’re working multiple jobs, thinking about their spending, and placing a premium on their own mental and emotional health. They are judging employers based on their own measures, not standards established long ago by people they’ll never know. And they always have one eye open — their phones within easy reach even when they sleep.
The seeds that Gen Z is planting now are quickly spreading and germinating, growing into longer-term societal shifts that are already impacting business, whether you recognize it or not. Businesses who want to flourish in the near-term future must recognize and help nurture a culture that embraces these coming shifts:
Read the full report | 2023 EY Gen Z Segmentation Study
The Generational Dynamics team
Generational Dynamics
Generations provide a lens to help us understand societal changes over time and the business shifts required to keep up with evolving human needs.
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