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New college graduates who conserve their funds and otherwise carefully plan their futures give hope to everyone worried about the job market, says Harvard blogger Michael Fertik
Posted on Harvard Business Review: November 19, 2010 9:58 AM
I just learned that two of the youngest people working at my company have bought houses. One man, one woman, both in their twenties. One a native-born Californian, one who immigrated with her family in recent years. They have both lived with their parents for a long time, scrimping, saving, putting half or more of every paycheck into savings. And they both just took possession of their houses. He has just moved into his condo; she is renting out her house for extra income. Amazing. Just when we're surrounded by doom in the news, there is great reason to believe in the future. These young people conserved, saw an opportunity in the market, planned ahead to qualify for debt in a tough debt environment, and seized their moment.
While governments are wrangling in Seoul and elsewhere over currencies and trade imbalances, while economists debate the wisdom of flushing economies with more capital, and while debt commissions advise on painful measures, the kids are all right. They are adapting to the present and giving us reason to believe in their future.
This is part of a trend I've noticed since starting my company in 2006. A significant number of our team members have been in their twenties, whether fresh out of college or grad school or two jobs into their careers. As far as I can tell, they are saving parts of their paychecks, often living with parents to keep costs low, and contributing to their 401ks.
Over the past few years, I've read some pieces from various quarters that throw the people who've grown up in the 2000s into a giant bucket of entitlement and ego. The basic idea is that "kids today aren't good employees." I don't see it. Well, I suppose I see hints of it from time to time, particularly among people in their older twenties who entered the workforce when high-paying jobs were in oversupply. But I do think that the Lehman cataclysm and the Great Recession have already made their imprint on the entry-level workforce. There's been a turnaround in the culture of the graduating classes.
Managers and academics may soon observe more broadly some material differences between what we might call Generation Z (say, 26- to 30-year-olds) and their immediate successors, Generation After-Lehman (or Generation AL, from 20 to 25).
First, the similarities. They have a similar UI. The Z and AL kids rock the same basic attire. They like similar music, though they would (similarly) tell you they don't. They often exhibit the same seemingly lazy communication style of half-finished sentences, all-lower-case emails, and twidiot paraphrase. They expect to able to work remotely with little diminished effectiveness, and they're often quite right. The Zs and ALs both presume intellectual fairness at the office; they anticipate that the best ideas, wherever they hail from in the company, should and will win the day, and they tend to define "best" in evidence-based ways. This makes them more open to and expectant of a collaborative work style, whether among peers or between superiors and reports. Immediate feedback loops are part of their social and work lives. They anticipate that transparent and honest feedback will filter out the best ideas and people in the office.
Neither generation is cynical about business. That point of view seems to have mostly expired with the people who are now in their thirties. Zs and ALs tend to view capitalism as imperfect but damn good, and their trust in merit-based systems and their first- and second-hand observations of successful entrepreneurship reinforce their basic belief in the intelligence of the market and the moral success of capitalist rewards for hard work and good insights. They're technologists, or at least they are digital natives. Their worldview is infused with technological truths, including the essential substitution of limited sources of goods with the promise of an infinitely shareable and self-sustaining commons. That, in turn, confirms their point of view that capitalism is a positive sum game rather than the production of X through the necessary destruction of Y.
But the kids today are a hardier breed than their immediate forebears. Generation After-Lehman expects less day-to-day fun and short-term reward. Wherever in the world they hail from originally, they have more of an immigrant, hardscrabble outlook. They expect to work harder and to be paid less at first, and they are hungrier to develop marketable skills and a trajectory for their careers. The kids graduating college from 2003 to 2007 enjoyed an abundance of job opportunities and aren't accustomed to the notion that their talents are in oversupply. By contrast, the After-Lehmans expect to fight hard for a job and are determined to make the most of it. This shows up in their personal habits, like how much they buy, how much debt they sign up for, how often they are living with their parents, how many part-time jobs they're willing to do, and how often they'll manage work and school at the same time. It also seems to me that they are more "responsible" earlier in their careers than the Zs were. In interviews, they ask more often about health care benefits, health savings accounts, and 401k programs.
This is an anecdotal observation, but I think the more recent graduates are ever so slightly more formal than their older counterparts. Their manner of address and their sense of their physical boundaries seem to be, very surprisingly to me, a little more courtly. Maybe that's just a reflection of their actual age, but it's been an unexpected observation.
Generation After-Lehman has even shorter attention spans than Generation Z. I didn't know that was possible, but it is. Social media, SMS, IM, and Twitter communications have made multi-tasking part of their DNA, but the flipside is that they're not used to following the thread for more than a sound bite. A terrific business school professor told me ten years ago that, to accommodate attention spans, he limited his talking spurts in class to no more than nine minutes, in between which he'd be sure to invite questions or call on students for comment. My guess is that he'd modify the maximum to 60 seconds for the ALs. This doesn't mean you can't reach them or that they can't develop. But managers should adapt. It seems useful to reinforce important messages through multiple media, in person, by email, on a social chat board, via a PPT slide, etc. The content seeps faster. They also develop longer attention spans when managers walk them through — and make them lead — extended presentations without any extraneous iPhones, BlackBerries, or laptops in front of them.
From what I've seen, I'm very hopeful about the new generation and the innovation and growth they will bring. They're scrappy, smart, and tough. They're highly optimistic, and they expect no reward without sacrifice. It's a good combination.