June 12, 2024

Gen Z’s 12% Unemployment, Explained

Hosts:

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Episode Highlights

No One Wants To Train Employees Anymore

I
3:24

The Side Hustle Generation

I
4:50

How Cost Cutting Gets Expensive

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6:22

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The 10 Minute Talent Rant, Episode 90 “Gen Z’s 12% Unemployment, Explained”

It came as a shock to pretty much everyone that the unemployment rate among 20-29 year old college grads is hovering at 12%. While the economy in total is under 4%.

The question is: Why? What caused such a disparity? And who is to blame?

The answer? There’s no one cause. You can point your finger in pretty much every direction and be right.

James Hornick and Jeff Smith will breakdown how it happened and what’s at stake long term in episode 90 of The 10 Minute Talent Rant, “Gen Z’s 12% Unemployment, Explained”

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Episode Transcript

The 10 Minute Talent Rant is live. I’m James Hornick joined by Jeff Smith and we are on the clock. The 10 Minute Talent Rant is our ongoing series where we break down things that are broken in the talent acquisition and hiring space, maybe even pitch a solution or two. Before we dig in, all of our content can be found at talentinsights.hirewell.com. This week’s topic, episode 90, Gen Z’s 12% Unemployment, Explained.

I mean, 10 more until we’re at the 100. Yeah. Yeah. Yeah. Do we win an award for that. Is that like a thing? No, I feel like we should. The dozens of people that have watched the show. Watched every episode. Yeah. All right. So, I read an article on CNN the other week, it was actually talking about the Bureau of Labor statistics data on unemployment.

I think this one went a little bit viral. So a lot of people probably saw this. The too long, didn’t read on this one: broad based unemployment is still under 4%, but unemployment specifically for 20 something college grads is like at a whopping 12%, which is bonkers. Yeah.

Before I start, I want to do a side tangent cause I did talk about this on LinkedIn and you know, there’s a lot of people out there who are going to complain about how the unemployment is counted, how it’s not counted correctly because there’s labor participation rate and people have been unemployed for too long. Not looking aren’t counted anymore. And then there’s conspiracy theories about how the government is juking the stats to make things not look so bad. Not going to get into that. Don’t care.

I will say, though, just if the administration wanted to get interest rates down, which will boost the economy, they’d actually over report the unemployment because ultimately no one cares about those numbers, except for the fed and that’s how they make decisions. I digress. Jeff, get us back on track here.

Fair enough. You’re right. We’re going to talk today about Gen Z college grads specifically and how, you know, to your point, the unemployment rates are just disproportionately high. Our intent, we kind of just want to flamethrow everything. There’s no fault here is the point. There’s a lot of fault. There’s a lot of fault. There’s just-

You can’t center it on somebody, right? Everyone kind of is to blame. And there could be some, like, there could be some really substantial long term impacts to both off as individuals and just the long term talent market, you know, in general.

So the reason we, us, me and you as humans get to say this about Gen Z, I mean, why it might be different from, you know, other conversations of the young ones, you know, getting old is we’re, me and you are Gen Z, you know, board, and then there’s like the borderline millennials are literally the last group of individuals that didn’t have endless information at their fingertips.

Gen X, you’re saying. Sorry, you said Gen Z. You and I, the olds. See, this is exactly it. My brain’s already going. Gen X, yeah, Gen X. So we had to figure stuff out. Like we had Encyclopedia Britannica on our bookshelf, right? That’s gone forever. And that’s fine. The information, you know, is second to the process of getting the information.

So that’s what companies pay for. They pay people to solve problems, not to complete tasks. And that, spoiler alert, is increasingly what AI is going to be for.

So there’s a handful of things to consider here. Let’s get into it. What’s number one? All right. First off, no one wants to train employees anymore when they can just hire people who already know how to do the job. There’s plenty of data on this if you Google around. I sourced an article for entrepreneur.com mentioned how training went from average training for any corporation went from 2.5 weeks a year in 1979 to 11 hours in 1995 to right now, only 20 percent of employees get any training at all.

Actually, that’s 2011, so it’s probably less than that. So it’s just-

Like shocking numbers. Yeah. Like most people don’t get trained for anything whatsoever. Whereas it was like, everyone got like a solid several weeks of it. Just a couple of generations ago. This has like the unintended consequence of workers going from spending their entire careers at one firm back, you know, maybe 22 generations ago to an average tenure of four years.

So just think about that. Like you probably, if you’re listening to this, four years seems totally normal to you, but like your parents or grandparents, like they literally only work for one company. Like there’s, if you ever watch an old movie where like someone gets fired and it’s based on like the sixties or seventies, it’s like a life ending event where now it’s like- it’s wild. Yeah, now it’s like, nobody cares.

It’s no big deal. Yeah. Long story. So another, like I got too long, didn’t read. Everyone’s just headhunting from each other. It’s like giant cyclical pattern. And that headhunting instead of like hiring new people and training them as well, it’s cutting out, it was one of the things, cutting out Gen Z almost entirely. Yup.

The second piece to this is to the previous point, the most in demand skill, when you see this list of requirements, it’s hidden and it’s creativity and it’s the ability to solve problems. Like I said before, entrepreneurial mindset, it’s not just for small companies and founders anymore.

Large organizations are requiring folks to have demonstrated tangible experience solving incredibly complex things. Not just where’s the cover sheet on the TPS report? Yeah. To go office space. As training is waned. That’s put anyone with even a marginally less access to entrepreneurialism or less access to training at a severe disadvantage. So we’ve established Gen Z isn’t getting this training.

They aren’t getting, you know, these sorts of things from the traditional workforce. So what they’re doing is they’re going and seeking it elsewhere, which is turning them into the side hustle generation. By the way, not a dig, total compliment. Like some of the things y’all are doing is stuff that James and I couldn’t do.

But it’s also why we anticipate a lot of these young adults to start more small businesses on their own than Gen X and Millennials. And that’s going to also have unintended consequences on what, like, the workforce will look like.

What’s number two, James? Number two, companies are endlessly in cost cutting mode. I think we’ve all seen this. The do more with less mindset has a bigger effect on those workers who can’t do more because they haven’t learned how to yet. Or what we just talked about. Training and learning and development used to be a hallmark of corporate culture. Like we said, especially prior to the dot com boom, you learned a job through curriculum training, had a mentor for a few years, mastered your craft, made a 30 year career of that. Companies invested in these programs because they got a return on their investment.

You now look at the last 25 years, that return is diminished and the pandemic exponentially accelerated that return to the point where it, in a lot of cases, doesn’t make any practical business sense at least on the surface. To invest in deeply training and developing staff at scale. So there is a business component to this, again, at least superficially.

It’s not to say it’s not happening anywhere. We always talk up GE rotational and the enterprise model. Like, they work for a reason, but those examples are diminishing year over year over year to the point where we’re just not seeing as much.

Yeah. And that’s like, we have an HR recruiting practice. And one thing I wanted to mention kind of about this too. And I was going to talk with those guys, learning and development as like, as professionals, the demand for them, has been directly correlated with internal recruiter demand. Not inversely like in my mind, I’d always think if there were, if we’re not hiring internal recruiters, then we must be hiring a learning development people since we’re going to train who we have as opposed to hiring new people, but they’re not, they’re actually directly correlated.

So when internal recruiter demand goes down learning development demand goes down because, it really comes down to companies like they hire L and D people to train their junior staff. But if they’re not hiring as many junior staff, they’re just not training anybody is what it’s ultimately come out to.

Both those skills are getting pushed to HR generalists, which is another conversation entirely. I love generalists. It’s a great area, but like, how many jobs can you really expect one person to do well at a master level, anyways. The answer increasingly in these companies is as many as we can get away with. Yeah, exactly. So like L and D has largely been a function to support volume hiring, which again, just isn’t happening, so. Yeah. The end result is Gen Z just doesn’t have access to the jobs that require a patient investment. Because the bottom line is that there are more tools than ever to do that lower level work, which brings us to our third point, AI is a lot of hype, except where it isn’t.

Yeah, so if there’s a weak point in the rant, we’ll call it out here. And I say that because, I talked to several tech leaders and senior devs, and they don’t even agree on this. So there’s not like a consensus answer. But to the point, it’s never been easier to automate the boring stuff.

It just keeps getting easier and easier to do that. And I use software, like, doesn’t have to be software development, but using that as an example, there’s tools like Copilot and ChatGPT that allow engineers to work faster, more efficiently exponentially so compared to what the tools used to have.

Some, some, not all, senior devs I know, like I’ve actually commented that they think entry level work’s going to be in a real ton of trouble if tools keep improving at that pace, because people are able to do more lower level stuff on their own without the need for more junior level people to help them out and kind of fill in the gaps.

I can say the same about writing, which I do a lot of. It does not full stop create good, publishable, authentic sounding copy, but it does help you edit and do rewrites and reword things a hell of a lot faster where you wouldn’t need, like, I’ve never had a copywriter, but I have saved a shitload of time, like, in the past 2 years since these tools have come out in terms of revising things or rewording things that were just kind of awkward. Whereas like, I could see if you’re a big publishing house and did a lot of copy, a lot of content, you would have other people kind of manually helping you out with that. I wonder-

General business research, like filing lists, like all that stuff is just so easy now. Yeah. And at the same time, I wonder if this is the calculator problem. Like, again, back to a gen X thing. Like, those of us in that generation where not just calculators, but like those, those TI 85 graphic calculators came out. The most coveted, the most coveted item in all of 1994 high school. Our, we had so many teachers back in the day, lose their shit because they thought like people weren’t going to have to think anymore because this was going to help us do our geometry or calculus faster or whatever.

And it was probably the same thing 20 years before that with calculators in general. In hindsight, it felt silly because I don’t use any of this shit anymore. Anyways. Is it the same problem? I don’t know. But you could say it’s the same thing for a lot of other areas. I don’t know. So it does bring up our number four concern. Take us away here, Jeff.

If there’s less junior workers now, who’s going to do the senior level work in the future? It’s like it’s actually terrifying stuff. So the skilled labor in the office dork circles, honestly, and in manufacturing isn’t getting any younger that’s why we’re seeing a boom in the trades. At some point economics of training, hiring, like all of this is going to have to change out of the necessity, yeah to ensure that the market can normalize.

So what does that mean for the current generation? I don’t have an answer. Like are large chunks of people going to be left behind because they simply hit the market at the wrong time? Or is this the actual beginning of the gig economy that everyone’s been talking about where allegiance from companies and employees is kind of forever changed? Again, we don’t know.

But we would implore people on both sides of that equation to think about it. Yeah. So like one of the takeaways, this is a harder one to do because we’re talking about macro level problems, which no individual person can solve. And market forces to your last point should over time sort this out.

Things will work out for the greater good, but not necessarily for people in this generation. So what can they do? And I think that’s what the takeaways are for. If you’re in this Gen Z and you’re in that 12%, like, what are your options? What can you do to make sure you don’t completely left behind? Jeff, you had an idea.

Oh, man, I, this is, here we go. Old guy, like I’m there. Work sucks a lot of the time, you know, you’re going to hear that from your parents. You’re going to hear it from every other individual that’s been in the workforce longer than you. You might have to take a job potentially at an office and by at an office, I mean, you have to go to an office either in a hybrid or five day a week schedule that you really don’t give a shit about, at least initially.

Right? Yeah. If there’s one thing that post pandemic world taught us, it really is that in person collaboration does matter. We were banging the drum that everyone should go to remote, you know, right away. And I’ve, I personally have relented a little bit on it. Not that I don’t think that’s the right, you know, procedure overall, but face to face matters.

So if you are resistant to in office, because you think that it produces or from not going into an office, because you don’t think it matters on the work product that’s involved, consider looking at an opportunity that potentially sets you apart because face time, whether we agree with it or not will always matter.

Yeah. If secondly, and maybe just building on that, if a company is willing to hire for grunt work, consider it a vast majority of office dork careers have been built doing things that no one else wanted to do. I was there, we were all there, you know, I mean, it’s just the way it is so. Yeah, getting the mundane stuff done for your superiors gives you a snapshot into what those superiors do. And ultimately that could be the avenue to the stable corporate job.

Yeah, we are short on clock. That’s a wrap for this week. Thanks again for tuning in the 10 Minute Talent Rant, which I thought we’re going to hit 10 minutes this week. And look at these notes, it’s 15 minutes again.

We’ve given up but the title stays the same. Part of the talent insight series, which is always available for replay on talentinsights.hirewell.com as well as YouTube, Apple podcasts, Google podcasts, Spotify, and Amazon. Jeff, thanks again, as always. Everyone out there, we will see you soon.

Episode 89
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