What’s Your Plan Z?

Ernst & Young research uncovers five distinct Gen Z segments business leaders need to know.

Employers and business leaders take note: a one-size-fits-all approach to defining a generation will cost talent and customers. As Gen Z, the generation of those born between 1997 and 2007, begins to enter the workforce and flex its newfound spending power, connecting with them is critical.

Don’t assume! Gen Z contradicts many expectations.

Ernst & Young recently released the Gen Z Segmentation Study, which confirms bucketing the most diverse generation to date into one simple type would be a costly mistake. Research shows Gen Z to be a walking contradiction to society and past youth when it comes to social media usage, core values and politics.

  • Social Media: Today’s youth are perceived to be obsessed with their social media activities, and while 84 percent of Gen Z say they have a social media account, they use it more for communication than for public sharing like past generations. When asked to choose their top reasons for using social media, EY research found:
    • 80 percent of Gen Z use social media to connect with family/friends
    • 72 percent use it to satisfy boredom
    • 41 percent use it to stay up to date on news
    • 22 percent share opinions through social sites
  • Values: Today’s youth are driven and future-thinking, with 79 percent saying doing well in school is very or extremely important and 72 percent spending time on activities that will help them in the future.
  • Politics: The assumption is that Gen Z is liberal, but the research shows that these young people represent the diversity of the political spectrum. The majority view themselves as moderate (39 percent), with an almost-even split between liberal (28 percent) and conservative (25 percent), and the smallest percentage falling into the “other” column (8 percent).

These identities provide the foundation for the five key Gen Z segments:

  1. Stressed Strivers (35 percent): high achievers, driven by a fear of not being good enough
  2. Big Plans, Low Energy (18 percent): expect to do well and make money, but aren’t necessarily willing to put in the effort
  3. Carefree Constituents (16 percent): the definition of “go with the flow”; may not drive change, but will be the ones who adopt it into the mainstream
  4. Authentic Activists (16 percent): motivated by the obligation to save the world—and the fear of what will happen if they don’t
  5. Secluded Perfectionists (15 percent): focused on being the best, not for money or accolades, but for the love of what they do

“Companies need a Plan Z and to recognize the power of five—or that each Gen Z segment brings unique value,” says Marcie Merriman, cultural insights and customer strategy leader for EY Americas. “Understanding the drivers of each Gen Z segment is critical to providing them with the products, services and experiences they desire as consumers and the jobs they seek as employees.”

Societal changes impact how Gen Z is being raised.

There are many components influencing the diversity we are seeing among Gen Z, such as technological innovations, medical advances and changing social norms. Gen Z is the first U.S. generation born of three generations, meaning their parents can be baby boomers, Gen X or millennials. The research shows that diversity also exists among the parents of Gen Z:

  1. Free-Range (ish) (38 percent): care about their children’s well-being and will help them when they’re struggling, but overall, encourage their kids to be independent
  2. Controlling Critics (33 percent): dictate what their children do and make their decisions for them, rather than raise them to be independent
  3. Helicopter Parents (16 percent): worry about their children and want to have control to ensure they are on the right path for success, a holdover from the millennial era
  4. Hands-Off (13 percent): detached from their kids’ lives, providing limited emotional support

The study found a correlation between parenting styles and the Gen Z segments they foster. The more involved parents are, the more likely their child is to be a Stressed Striver or Authentic Activist, while the more detached parents are likely to raise a Carefree Constituent or Secluded Perfectionist. The following chart further details these relationships:

Companies should embrace transparency to address Gen Z’s trust concerns.

As an extremely diverse, independent and proactive generation, Gen Z have strong personalities and values, making it hard to gain their loyalty—67 percent of Gen Z say that people cannot be trusted. With the disposable nature of the current society, loyalty may seem like a lower priority to Gen Z, causing a greater challenge for companies. Transparency will help companies gain Gen Z’s trust and provide them with a platform to remain authentic, connected and fulfilled, and therefore, more aligned with their values.


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