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Financial Worry Is a Top Driver of Anxiety Among Gen Z, New EY Study Finds
News provided byEY
Sep 18, 2023, 9:00 AM ET
Report examines Gen Z's economic and societal concerns and explores their influence on consumer businesses and the broader workforce
NEW YORK, Sept. 18, 2023 /PRNewswire/ -- Money continues to be a growing concern for Gen Z as financial uncertainty, worry about an uncertain future and distrust of large businesses propels generational anxiety to an all-time high, according to the Ernst & Young LLP (EY US) 2023 Gen Z Segmentation Study.
"Right now, Gen Z is particularly important as the newest generation of consumers, employees and citizens that will dramatically impact businesses today and into the future," said Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader.
This third iteration of the Gen Z Segmentation Study gathered insights from over 1,500 participants across the US born between roughly 1997 and 2007 (currently aged 16 to 26 years old). The survey aimed to track Gen Z's personal and professional interests and outlook on mental health, trust, technology, career and lifestyle ambitions.
"Our research has consistently found that mental health is an ongoing challenge for Gen Z," Merriman said. "As the generation moves into our prime workforce and consumer markets, several shifts are happening simultaneously. The oldest Gen Z are aging out of their parents' health care plans this year, and they are feeling the impact of financial independence amid economic uncertainty. These factors are shaping their views of work and life and what success looks like."
Financial fears are driving the 'monetization generation'
Less than a third of Gen Z (31%) feel financially secure, with more than half (52%) saying they are very or extremely worried about not having enough money. Placing importance on making money has consistently increased year-over-year, with 46% of respondents saying it was a top priority compared with 32% in 2021 and 38% in 2019.
Among the financial fears for Gen Z are:
- More than a third (39%) said they are very or extremely stressed or worried about making the wrong choices with their money.
- 69% rate their current financial situation as only "fair" or worse, with 32% rating their current finances as poor or very poor.
As a result, Gen Z normalizes working multiple jobs to hedge their bets against the future by preparing well now. Nearly two-thirds (65%) of Gen Z were employed in a part-time or full-time job last year, while 56% earned money from freelance or "side hustle" work. Moreover, 39% of Gen Z earned money working both a job and a side hustle. This pragmatic need to get ahead by whatever means necessary is changing how they view work, how they approach savings, and when and how they choose to spend their money.
Anxiety is a norm for this generation and continues to rise
While each of our previous Gen Z studies (conducted in 2019 and 2021) has called out stress and anxiety as a hallmark of this generation, this latest research reveals that nearly half of Gen Z (47%) report excessive anxiety or worry that is difficult to control on an ongoing basis. While a COVID-19-related increase in worry and anxiety was expected in the last study, a continued increase in this 2023 edition shows mental health has become an even greater concern for this generation.
Wellness, for Gen Z, is a mix of physical, mental and social health and a common talking point and source of concern for themselves as well as their friends and loved ones. And 54% of Gen Z said they were moderately, very or extremely worried across a variety of topics, up from 46% in 2021 and 30% in 2019.
Gen Z's awareness of their own socioemotional health and genuine concern for others' well-being is paramount for business leaders. Companies will need to rework their culture and benefits structure to account for Gen Z's values, meaning mental health and caretaking benefits may be more of a priority for younger workers, beyond what older generations may have required or asked for.
Integrity and transparency are key to earning Gen Z's trust
Having been raised with the contradictions of the world at their fingertips, Gen Z is unbound by past societal standards. They are natural skeptics regarding who or what is telling the truth and look for transparency and authenticity as the gateway to trust. When asked about the likelihood that they can trust the following organizations to do what is right, large businesses and the federal government scored significantly lower (34%) than small businesses (71%) and their supervisor (71%).
Being authentic and true to oneself is very or extremely important, according to 91% of Gen Z. They are not "falling in line" with past expectations and instead are paving new roads for integrity, inclusion and trust in the workplace and driving a shift to intentional consumerism.
Their inherent mistrust may be further exacerbated by the ongoing efforts to integrate generative AI into our day-to-day lives. With 67% of respondents already indicating that most people can't be trusted, asking young employees, consumers and citizens to put their faith in a new technology that has the potential to produce false content may be another barrier for business leaders to tackle in winning the trust battle with Gen Z.
Gen Z's diversity cannot be ignored
Recognizing the psychographic nuances within the generation – what we call the five segments of Gen Z – can help businesses better understand the diversity within Gen Z and the different expectations they will drive for the organizations that wish to engage them as employees and consumers. The report further analyzes behavioral and attitudinal groupings of the Stressed Strivers, Big Dreamers, Authentic Activists, Secluded Perfectionists and Carefree Constituents segments and how these cohorts have changed.
2023 Gen Z Segmentation Study methodology
Ernst & Young LLP surveyed a representative sample of 1,553 members of Gen Z from across the United States. The online survey was completed February 3-16, 2023. To be considered a member of Gen Z, a person had to have been born between 1997 (turning age 26 in 2023) and 2007 (turning age 16 in 2023).
The survey recruited a representative mix of age, race/ethnicity, gender, geographic region, educational attainment and socioeconomic status.
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