Industry 4.0: manufacturers must address career expectations of Generation Z

Out-Law Analysis | 12 Aug 2020 | 3:07 pm | 6 min. read

Manufacturers that do more to highlight the potential to work with new technologies stand a better chance of attracting the next generation of talent to work in the industry and of addressing the wider digital skills gap that affects the sector

Long-term talent needs should not be forgotten despite the immediate focus on employee safety and wellbeing in light of the coronavirus pandemic. HR and talent leaders within the manufacturing sector must ensure their people development and talent acquisition strategies are ready for the generation of employees who are yet to enter the workforce.

There is an opportunity to rebuild skills in the manufacturing sector as it emerges from the pandemic. Forward-thinking manufacturing businesses have invested in training programmes to help their workforce recover quickly from the current crisis.

However, manufacturers must think beyond the immediate recovery phase. Manufacturers need to recognise and then address the career expectations set by a new generation of talent who are set to enter the workforce over the next five years. 

Employers are facing a ‘Gen Z’ challenge

Generation Z (Gen Z) is the name given to people born between the late 1990s through to the early 2010s. The oldest among this generation are now graduating from their studies to take their first steps into the world of work. This demographic is a vital component of any manufacturer’s future talent acquisition and development strategy.

Earlier this year, prior to the onset of Covid-19, Pinsent Masons, the law firm behind Out-Law, asked 100 representatives of Gen Z in Germany about their career aspirations. We also asked 100 leading industrial manufacturers in Germany about how their talent development strategies are changing. A clear perception gap emerges between these two groups.

Of the manufacturers interviewed, four out of five identify meeting the expectations of Gen Z as a concern for their company, with 36% describing this as a major problem.

Employers cite a range of challenges associated with bringing this new generation into the workforce. These include:

  • Negative perceptions – 68% of the employers surveyed thought that there were negative perceptions among Gen Z associated with job positions in manufacturing, such as production-line work;
  • Lack of specialist knowledge – 78% of employers identified challenges recruiting suitably qualified talent due to a lack of science, technology, engineering, and mathematics (STEM) skills among recent graduates;
  • Competition from other industries – 61% of employers were concerned about their ability to compete for talent with brands more closely associated with technology and innovation.

A focus on STEM: German leads among OECD

Among the representatives of Gen Z interviewed, nearly three-quarters (73%) said they were most attracted to studying either STEM subjects or applied and hands-on subjects such as business studies, computer science or law. Most students in our survey lean towards STEM subjects rather than humanities or arts subjects.

This contrasts with findings from Pinsent Masons research among British students in 2018, which found that only 19% of the Gen Z interviewed said STEM subjects were their favourite and where 39% favoured arts and humanities subjects.

The divergent attitude towards STEM subjects is also reflected in the proportion of students who choose to pursue a STEM subject at degree level. According to data released by the Organisation for Economic Co-operation and Development (OECD), an intergovernmental body that represents 37 leading industrial economies, Germany has the highest proportion of STEM graduates as a proportion of all university graduates at 36%. This is higher than the UK (26%) and US (18%).

Vocational learning is typically given a higher priority and status in Germany compared with the UK and other leading economies, and this is also reflected in the way technical education is funded. A March 2020 paper released by the Education Policy Institute, a British education think tank, highlighted that Germany spends almost twice as much per capita on funding technical education compared to UK. It also shows that in Germany almost 33% of this funding comes from the private sector, compared with less than 10% in the UK.

Employers in Germany have a greater financial interest in reaching out to young people earlier on in their school career to sell the benefits of a technical education. As a result, students in Germany often gain exposure much earlier to manufacturing as a long-term career option. Like many of its peers, leading German automotive manufacturer Volkswagen offers short, ‘pre-study’ internships of up to six weeks specifically aimed at students who are considering applying to a technical education course.

How open are Gen Z to industrial manufacturing?

Our research identifies a strong preference among students in Germany to pursue a career in areas where they can build on their knowledge and passion for their favoured subjects. For example, students told us they are attracted by the idea of working at the cutting edge of industry and involved in the development and deployment of new technologies. One student who participated in the research said: "New technologies determine and influence our lives in many different ways, and the idea of pursuing a career in this area excites me."

Our research suggests Gen Z is more open to considering a career path within industrial manufacturing than many of the employers surveyed may currently believe.

The challenge for employers, however, is to translate this enthusiasm for advanced technologies and innovation into a desire to work for their company. They must showcase aspects of their business that most closely align with the criteria that Gen Z use to assess which companies they want to work for in the future. Germany chemicals manufacturer BASF, for example, encourages students and graduates to join its online Talent Community to stay connected into vacancies and new career development opportunities.

Attracting Gen Z talent: skills, flexible working and development opportunities

The results of our research provide clear pointers for employers on what makes the most difference to Gen Z when assessing their employment options. They paint a picture of a generation who are ambitious to learn and get ahead in their career, but also are keen to be rewarded for their efforts in a fair and open way.

Pay and career opportunities are high on the list of priorities and appear to be as important as work-life balance and an agile working environment. Our research shows Gen Z are looking for evidence of a range of factors. For example;

  • 83% say a healthy work-life balance is either ‘indispensable’ or ‘very important’;
  • 78% say the existence of good internal training within the company is ‘indispensable’ or ‘very important’;
  • 78% say is ‘indispensable’ or ‘very important’ that the company has salary transparency for all employees;
  • 76% say it is either ‘indispensable’ or ‘very important’ that the company offer an agile working environment, including flexible working hours and the ability to work from home even once the COVID-19 lockdown has eased;
  • 74% say it is ‘indispensable’ or ‘very important’ that the company is technologically advanced.

BASF, for example, uses its careers website to illustrate its promise for new joiners to the company, what it calls the ‘[email protected] Periodic Table’. This framework outlines what the onboarding and development experience will be like and describes elements of both its classroom learning and on the job training using videos and case studies to make the experience come to life.

Start early: using work experience to attract Gen Z talent

Work experience and internships are a valuable way for Gen Z to better understand what a career in industrial manufacturing may entail. Gen Z is actively seeking out these opportunities. More than three-quarters (78%) of the young people in our survey said that the offer of work experience would make them feel more favourably towards applying to a career at a manufacturing company.

Similarly, the offer of attending open days and the ability to meet and ask questions of current employees at careers fairs was cited by 75% and 74% respectively as a positive way to encourage more young people to take an interest in manufacturing careers.

Finessing your Gen Z strategy today

Manufacturing businesses cannot wait to for Gen Z to enter the workforce before making changes. Proactive change is needed today to prepare adequately for the future. There are actions HR and talent professionals should consider for their business:

  • Counter legacy negative perceptions about manufacturing career. Although the majority of German students generally enjoy studying STEM and other practical subjects, negative perceptions persist about how these skills can be deployed in an industry context. Some students still consider a career in manufacturing to be boring, dirty or with limited career progression opportunities;
  • Promote skills development and other learning opportunities. Pay and benefits are still important for Gen Z when assessing where they want to work. However, they are also attracted by an employer’s skills development offer. They are looking for credible evidence that businesses are offering opportunities to train employees and progress their career quickly. Provide detailed and transparent information about talent development throughout the recruitment cycle;
  • Involve Gen Z in the development of recruitment and talent development programmes. Do not simply second-guess what Gen Z want from your company. Instead find opportunities to involve them in the design of recruitment and talent development processes. Gathering detailed feedback from interns, for example, provide a good opportunity to refine your full-time employment offer to the younger generation.