Kickstarting Gen Z’s entry to the labour market

Under-represented groups, including women, people on lower wages and those at the beginning of their careers, were among those to feel first the pandemic’s impact on the labour market.

Under-represented groups are strongly impacted by economic shocks. Younger people, in particular, had a hard time during the pandemic when many of the roles they often start their work-life with, such as hospitality, were lost. Moreover, starting a career with underemployment – that is, working in a job that doesn’t reflect your skills, experience, and ability – can damage careers and incomes. So, it’s critical to think carefully about how we get young people starting their careers off to a strong start.

LinkedIn’s data shows that the labour market for career starters is much better today than it was two years ago when the pandemic had just started and hiring rates of graduates took a significant dip. The good news is that we’re seeing career starters being hired at a faster rate than the rest of the labour market in Germany and France while in the United Kingdom and the United States hiring is slightly behind the overall average. That’s a marked improvement compared to the beginning of the pandemic but markets haven’t fully recovered and there is still significant progress to be made to restore the damage from the last two or so years.

One positive shift in the labour market that creates more opportunity for Gen Z is the move towards more skills-based hiring, meaning focusing on a candidate’s skills and potential versus just their education and employment history. Gen Z often has various in-demand and cutting-edge skills employers are desperately looking for, not necessarily directly reflected in their employment history.

LinkedIn’s data shows that 40% of hirers globally explicitly rely on skills to search for and identify candidates (up 20% compared to the year prior). At LinkedIn, we’re making it easier for job seekers to stand out for their skills by adding the ability to represent skills within a specific experience on their profile and showing whether those skills are a strong match for open jobs. In addition, by linking experiences and certificates with skills, people looking for a job can more easily explain the knowledge they’ve gathered.

Our analysis shows that the digitalization of the economy continues to drive the strongest career opportunities for people starting out. When looking at the sectors that hire most career starters into entry-level positions, the Technology and IT sectors are consistently strong, with Software Engineer being the number one job those career starters were hired into in the United States, United Kingdom and Germany.

As companies try to address the new world of work and think about how they hire top talent, there’s a huge question about how they attract Gen Z, many of whom entered the workforce during the pandemic and have never known the “old” ways of working.

Research that LinkedIn conducted in January found that Gen Z (69%) is the generation most likely to have either left or considered leaving a job because their employer did not offer a feasible flexible work policy (compared to 63% of Millennials, 43% of Gen X and 36% of Boomers).

But while our research shows that Gen Z really wants flexibility, that doesn’t necessarily mean fully remote working. Our data shows that 20–24-year-olds are less likely to apply for remote roles than older groups. While remote roles continue to grow in almost all countries and job seekers are applying for these roles at an increasing rate, across the United Kingdom, the United States, France and Germany, this age group had the lowest share of applications to remote roles.

The development opportunities that being in an office brings may be a key factor here. Previous research with business leaders in the UK found that they worried younger workers were facing a “development dip” because remote working had meant they’d missed out on being around more experienced colleagues, learning soft skills and building professional networks.

While younger people have faced a series of deeply challenging issues over the last two years, we see encouraging signs for people starting their careers. The significant improvement in hiring from two years ago and the shift to skills-based hiring are positive signals for people starting their careers. But as we think about kickstarting Gen Z careers, I believe that offering flexibility will be key. It’s going to be core for employers who want to attract top talent but it’s also going to be vital in making workplaces more equitable and reflecting the realities of people’s personal situations.

Gen Z will soon make up 30% of the global workforce and will play a vital role in shaping society and the economy for decades to come. So helping them get off to a good start is critical for us all.