Terry Savage: Younger generations are changing the workplace

The unemployment numbers are encouraging. The unemployment rate has remained below 4% for 27 months, the longest streak since the 1960s. Average hourly wages are up 4.1% over the last year — slightly beating inflation. The economy has added around 200,000 new jobs every month.

Those financial headlines go beyond economic statistics and political maneuvering. The job market is critical to the personal finances of all Americans — contributing to strong consumer spending, rising corporate earnings and a rising stock market.

But how long will this good news continue? And how should it impact your own career, job-changing and retirement decisions — as well as your adult children and recent college grads?

While it’s a terrific time to be starting out in the workforce because of high demand, it’s important to understand the changing workplace. There may never again be an employee who is rewarded with a gold watch for 50 years of service! According to the Department of Labor, in January 2022, the median time that wage and salary workers had been with their current employer was 4.1 years.

Switching jobs can lead to advancement — or regrets. A new survey just released by the Conference Board reveals those who changed jobs since the pandemic are significantly less satisfied with their jobs than their colleagues who stayed. According to the survey, “Job switchers’ overall job satisfaction is down 5.6 percentage points — a big decline.” The largest areas of dissatisfaction were “primarily in financial benefits such as bonuses, hard base benefits, wages and promotions."

Where is the workplace these days? In the midst of the pandemic, in spring of 2021, 65 percent of pandemic remote workers surveyed said they wanted to keep working from home — and 58 percent even said they would look for a new job if they would have to return to the office.

But the balance of power shifted, as corporate executives — who could not do their jobs remotely — demanded workers come back to the office. Even the most sophisticated tech companies, including Google, Amazon, Meta and Apple, implemented return-to-work mandates requiring employees to be in the office at least three days a week. Still, there is plenty of vacant office space to attest to the changing workplace.

For the retiring generation of baby boomers, it comes as no surprise that the boss can make demands — from office hours to attire, from project assignments to vacation requests. And it’s not just physical space that has changed for work, it’s the attitudes of the working generation.

Gen Z is about to take over the workplace. Soon there will be more zoomers working full time than baby boomers. In 2024, the generation born between 1996 to 2010 is expected to overtake baby boomers in the full-time workforce, according to Glassdoor. So it’s not your imagination that the workplace has shifted.

According to the latest Stanford Report, Gen Zers expect constant change. It’s a generation of workers that is mostly concerned about making a difference and demanding answers. They don’t accept hierarchical organizations, preferring collaboration and teamwork. And they care about mental health and work-life balance.

Most importantly, Gen Z has a different perspective on loyalty. They lived through the recession layoffs in 2008 and then the pandemic shutdowns. And they have watched their parents transition to the “gig economy” as corporations shed the costs of employee benefits. So they live for the moment.

Perhaps those changing attitudes are responsible for the surge in consumer spending, the rise of buy now-pay later, the boom in cruise ship travel, the willingness to spend a small fortune on dinner at a restaurant — an expenditure that is literally down the drain before the credit card bill arrives.

The attitudes and the financial habits of Gen Z are anathema to the boomer generation, whose own parents’ attitudes toward work and saving were built in the Great Depression. But that’s all ancient history now — almost a century ago.

Just one caveat: History repeats — because generations have short memories. And that’s The Savage Truth.

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(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)