By John Palmiero, SVP of EMEA at MetricStream
As Generation Z starts to enter the workforce, it will shortly make up almost a quarter of the global working population. Indeed, there is soon to be a new first line of defence in the workplace. The employees at the frontlines of the enterprise will be managing risks every day in their business transactions, decisions, and interactions with customers.
In some respects, Generation Z are similar to their predecessors, the millennials. However, they also come with distinctive values, attitudes and – of course – risks that governance, risk and compliance (GRC) teams would do well to be aware of, if they want to effectively harness the potential of this new demographic in building well-governed, risk-aware enterprises.
Generation Z is highly tech-savvy
Generation Z employees are the first truly digital natives. To them, smart phones aren’t just devices, but a way of life. In fact, the majority of Generation Z now communicates more digitally than they do in person. They expect information to be delivered instantly, visually, and in bite-sized chunks. They’re also big on personalised digital experiences and applications that can predict and provide what they need.
Engaging this new demographic in GRC might require a rethink of existing GRC tools and processes. GRC teams need to ask: are spreadsheets the way forward for a mobile-first generation – or are there better, more automated approaches available? Can employees use mobile apps to assess risks or attest to policies? Are these tools intuitive and easy to use and are they visually appealing? Can they be personalised by users to suit their unique preferences?
These are key questions to consider because the more effectively GRC can be adapted to the needs and behaviours of Generation Z employees, and integrated into their daily lives, the more they will be used and followed, resulting in higher protection against risks in the enterprise.
Generation Z is purpose driven
A 2017 survey by marketing specialist, Lovell Corporation, found that while millennials tend to look for jobs that provide security and a good work-life balance, Generation Z is more focused on working for organisations that they’re proud of.[https://www.lovellcorporation.com/wp-content/uploads/2017/11/The2017ChangeGenerationReport-Lovell.pdf] They actively seek out employers whose missions align with theirs and are more likely to stay with companies that value ethics and social responsibility. Having been part of seminal social media movements such as #metoo, Generation Z cares about values like ethics and transparency.
For GRC, therefore, it’s important to foster a corporate culture that Generation Z employees are proud to be part of – a culture based on integrity and trust. To do that, GRC teams should be looking into whether a company’s core values exist just for the sake of branding, or if they truly permeate thought and action. It’s also important to ensure the leadership team is living the core values, or whether they are, for instance, setting such aggressive sales targets that employees are forced to compromise on ethics. Additionally, GRC teams should test that good behaviours are rewarded, and offenses are appropriately penalised, as well as if employees feel like they can speak up against inappropriate behaviour.
It’s no longer enough for companies to pay lip service to cultural values, Generation Z is watching. And if they see their organisation being driven more by sales and profits than by a higher purpose or a sense of integrity, they may take their talents and resources elsewhere.
Generation Z is changing the nature of work
While millennials may have started the trend of flexible, independent work, Generation Z is likely to take it further. 47% of them are already freelancing – a higher percentage than any other generation.[https://www.upwork.com/blog/2016/10/freelancinginamerica2016/] And almost 60% consider the option to work remotely as a top job benefit.[https://www.ey.com/Publication/vwLUAssets/ey-next-gen-workforce-secret-weapon-or-biggest-challenge/%24FILE/ey-pdf-next-gen-workforce-secret-weapon-or-biggest-challenge.pdf]
Clearly, this is a generation that wants freedom and autonomy in their work. As businesses evolve to accommodate these expectations, GRC teams will need to find ways of balancing the associated risks and opportunities. For instance, with remote workers, data security can be a major risk. So, GRC teams should investigate how training programmes and controls can be adapted to protect data better. Similarly, when it comes to freelancers and other third parties, quality could be a problem. Can GRC teams prevent the issue with better due diligence and onboarding programmes?
Ultimately, the faster that companies adapt their risk management and compliance strategies to the changing nature of work, the more effectively they will be able to optimise the opportunities ahead.
Generation Z is all about diversity
Generation Z will undoubtedly be the most diverse generation yet to enter the workforce, with almost half in the US belonging to a minority group.[https://www.marketingcharts.com/demographics-and-audiences-68603] 81% have friends of a different race, and 59% of a different sexual orientation.[https://www.businessinsider.in/Meet-Generation-Z-the-millennials-on-steroids-who-could-lead-the-charge-for-change-in-the-US/But-they-use-social-media-differently-than-the-millennials-who-popularized-it-/slideshow/60702385.cms] Meanwhile, almost three-quarters of them consider racial equality to be to be an important social issue today.[http://www.millennialmarketing.com/wp-content/uploads/2016/12/FutureCast_The-Pivotal-Generation-7.pdf]
All of this is good news for organisations that have increasingly been under pressure to improve diversity in the workplace. But as workforces grow more diverse, new risks are likely to crop up. Habits, behaviours, and even forms of dressing that seem normal to some employees due to their religious or cultural orientations, could be perceived as odd or even taboo to others.
From both a GRC and HR perspective, it will be essential to recognise these risks ahead of time and develop policies and codes of conduct to deal with them. The aim should be to promote an inclusive workplace that treats everyone with dignity and respect. Programmes promoting integrity and corporate social responsibility will play a key role here.
As the emerging first line of defence, Generation Z employees can add significant value to GRC programmes by taking on more responsibility for risk. At the same time, their entrance to the workplace brings a whole new set of GRC challenges. Understanding and preparing for these challenges and changes will be pivotal to GRC success in organisations tomorrow and beyond.
