Recruiting, Retaining, and Engaging Generation Z Workers: How to Keep Younger Employees
Finding and keeping good people has been one of business owners' biggest challenges for a decade. Recruiting is more competitive, turnover is more expensive, and managing younger employees can feel very different from what owners experienced earlier in their careers. Much has been written about Generation Z, but the conversation often slides into stereotypes and frustration rather than practical answers.
That's an ExitReadiness® issue. A business that consistently attracts, develops, and keeps talented people is typically more valuable, less dependent on the owner, and more sellable and transferable. High turnover, on the other hand, is an easy red flag for a buyer. It signals lost experience, lost relationships, lost momentum, and something broken in how the business runs.
In this episode, Pat Ennis and Walter Deyhle, joined by Corby Megorden, talk with Danielle Verderosa, Founder and President of HR Allies, about recruiting, retaining, and engaging Gen Z employees. Danielle draws on more than 25 years of executive HR leadership to explain what's changed in the employer-employee relationship, why transparency and accountability matter, how to make an employee's first day count, and why people strategy is really a business value strategy.
Key Takeaways
Employees now have choices, and they use them. Technology and remote work have put applicants in the driver's seat. Owners now compete for employees the way they compete for customers, and the approach has to evolve the same way business models have.
Hold the line on accountability and communication. Expect the work to get done and hold people accountable when it doesn't. Then overcommunicate, because this generation expects it.
Be transparent about the business and their role in it. Gen Z doesn't respond to hierarchy and authority the way earlier generations did. Share more about the company's goals and how each person contributes to something being built.
Mean your stated values. If you say employees come first, your policies, benefits, and actions have to back it up. Gen Z grew up surrounded by fakes and has little tolerance for a culture that's only on paper.
Diagnose your turnover before you blame a generation. If people who leave weren't good hires, look at your interview and selection process. If good people are leaving, look at what happens after they're hired, starting with onboarding.
Make the first day the best day of their working life. Most first days are an hour or two of paperwork and videos alone in a conference room. New hires arrive excited and leave deflated. A great first day costs time, not money.
Tailor development to the person. Not every young employee wants to climb a career ladder; for many, personal life comes first. Start the career conversation early, ask what they want, and give them challenges that fit, including special projects that make an entry-level role feel like a real contribution.
Lower turnover means higher value. A buyer comparing a company with 30–40% annual turnover to one with 10% will see stability and predictability in the second. That's not an HR issue; it's a business value issue.
Where to Start: Danielle's First-Hour Onboarding
Schedule the start around your calendar. Have the new hire start when you, the owner, can give them an uninterrupted hour, even if that's Tuesday at lunch instead of Monday morning.
Tell them exactly why you hired them. Give concrete examples of what you noticed. It's flattering, and it sets clear expectations from the start.
Paint the picture of what's ahead. Explain how their work affects co-workers and the team, outline their first week, and name a project you can't wait for them to start.
Save the paperwork for later. It still has to get done, just not first. You want them going home saying, "I made the right choice."
About Danielle Verderosa
Danielle Verderosa is the Founder and President of HR Allies, where she serves as a trusted Executive HR Advisor to owners of growing privately held businesses across the United States. With more than 25 years of executive Human Resources leadership experience, she helps founder-led companies become more operationally effective, profitable, and less dependent on the owner by strengthening recruiting, leadership, employee retention, workplace culture, compliance, and organizational structure. She also sends business owners a short biweekly email of practical HR tips, available through the HR Allies website.
Connect with Danielle: LinkedIn · hrallies.com
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Full Episode Transcript
This transcript was generated automatically and lightly edited for readability. It may contain minor errors.
Hey there, this is Pat Ennis of ENNIS Legacy Partners. Welcome to the ExitReadiness® PODCAST. I'm here with co-host Walter Deyhle, and business partner Corby Megorden is joining us today as well. Our mission is to provide you, the business owner, with subject matter expertise on topics pertaining to building sellable business value and for planning that eventual exit from the business. We want to help you build a business that is transferable and then exit successfully on your own terms and conditions.
One of the most common challenges that we hear from business owners today, and really for the last 10 years, has to do with people: specifically finding them, keeping them, and developing good, reliable, responsive, competent, talented employees. Many owners tell us that recruiting has become harder these days. Turnover has become more expensive. Managing younger employees often feels very different from what owners have experienced in past years and decades. And while much has been written about Generation Z, the conversation often becomes oversimplified.
It's easy to fall into stereotypes or frustration. We tend to do that. But perhaps the most important question is, what are younger employees telling us about the future of work, leadership, and organizational culture? Because regardless of our opinions, Generation Z is becoming an increasingly important part of the workforce. Business owners who learn how to recruit, retain, and engage these employees effectively may gain a significant competitive advantage in the years ahead.
Those who don't may find themselves facing higher turnover, leadership gaps, and perhaps increasing workforce challenges. And there's another important consideration. A business that consistently attracts, develops, and retains talented people, and you've heard this many times here before if you're a faithful listener, and hopefully you are, is typically more valuable, less dependent on the owner, and ultimately more sellable and transferable. And so today's conversation is titled Recruiting, Retaining, and Engaging Generation Z Workers. Joining us today is our friend Danielle Verderosa.
Danielle is the founder and president of HR Allies, where she serves as a trusted executive HR advisor to owners of growing privately held businesses across the United States. With more than 25 years of executive HR leadership experience, she helps business owners like the ones we work with build organizations that are not only legally compliant but operationally stronger, more profitable, and less dependent on the owner. She advises owners on recruiting, leadership, employee retention, workplace culture, compliance, and organizational structure, transforming HR, and listen to this, this is important, at least from my perspective, from a necessary expense into a strategic business asset. Danielle, welcome to the ExitReadiness® PODCAST. It's great to have you with us today.
It's great to be here, Pat. Thank you very much for inviting me. You're most welcome. We're looking forward to this conversation. And I know Walter's got the first question teed up and ready to go.
Hey Danielle, thanks for joining us. Hi Walter, thank you. You know the question I'm going to ask you. I'm going to ask you the question, then I'm going to give you my answer. Uh oh.
And then you can give us the right answer. So the question is, you've been working in HR for more than 25 years. What's changed the most about employee-employer relationships? My answer is, the current workforce are a bunch of babies who don't want to work, and you've got to bend over backwards to make them happy, which drives them crazy. Oh my gosh.
I'm assuming that's not the right answer. You will never hear me say that, Walter. You will never hear me say that. You know, it's funny, though, because two generations above us, when we came into the workforce, were saying the same thing about us, right? We had tough shoes to fill.
That's what happens. Everybody's displeased with the next generation. Yeah. No one's ever said that about Walter, did they? No. Maybe it's just me.
I was a different person in the '80s when I started working than I am now. So yes, I hear that an awful lot from clients. It's a huge frustration. If you ask what's the biggest thing that's changed, the biggest thing is that these applicants, these employees now in Generation Z, and really anyone, have many more choices than they used to have when choosing who to work for. When we came up, we wanted a job with certain duties that fit our skills, and we had a geographic radius this big that we hoped an employer was hiring in.
When we found that job, we were grateful to have it. We stayed. Maybe some of us even got pensions if we stayed. If we had any complaints about who we worked for, we would tell our spouses or our best friends. It was just expected: that's the job, that's what you do when you work, you're not going to love your job, but you've got to have a job.
Now, because of technology and the internet and the ability to work remotely, the applicants and employees are in the driver's seat with choice, and they're not afraid to exercise it. They're very comfortable with it: if something doesn't feel right, they will go. So I think it's up to us to realize that, the same way we've adapted our business models to increase revenue, we have to adapt our approach with our employees and applicants and recognize that it's not 1995 anymore. We have to evolve to meet them where they're at, because they've got a lot of choices, and now we're competing for them instead of the other way around. Yeah.
So Danielle, there's always that dynamic where the business owner understands the business from the point of view of the need to be profitable, the need to produce work, the need for people to work hard. And oftentimes the employees don't quite get that. It seems to be more pronounced now. How does an employer balance the authority issue, the command issue, versus placating? I'm not going to judge Generation Z, right? They are who they are.
Each of our generations had a unique thing and reputation. I'm not saying your comments are unfounded; we've all worked with Generation Z, and they are definitely different. In a nutshell, if I'm an employer, I would always hold accountability and communication. Those are two things I don't sacrifice on. Anybody that I hire, I'm going to expect will do the work that I need them to do, and if they don't, I will hold them accountable.
I will overcommunicate, because this generation is all about communication and transparency. They demand transparency. Whereas as a business owner I might by default think the business is my private business, I'm not sharing it with employees, they don't have a need to know, Generation Z doesn't really see hierarchies. They don't really see authority. To paint them with a wide brush, that's just not how you're going to get them to respond to you.
So as a business owner, I would be more transparent about the business and their role in reaching the business goals, rather than keeping it quiet, on the down low, on a need-to-know basis. These people want to know that they are a very important part of something that's being built for good, and authority isn't what you exercise to get them there. They feel like you're almost a peer, and they want information shared with them so they see their important role in the business. Yeah. It almost seems like people talk about vision and the whole company being on board with the vision, and owners actually have to do that.
Yeah, right. It's a good idea, when you have your vision and your mission and your values, to mean them. Don't just cobble together what sounds like a fancy vision statement. I always laugh because inevitably a company will say, we're all about our employees, we put our employees first, they're our most valuable asset and we treasure them that way. But then when you look at the employer's actions, what they actually do, the policies they have, the benefits, costly benefits and free benefits, it doesn't really back up that vision very often.
And Generation Z, you cannot fool them. They are suspicious. They've grown up with fraud and catfishing and fakes, and you cannot fool them by saying you've got a wonderful workplace culture and an amazing vision if that's not what you're actually displaying. They've got no tolerance for fake. Hey Danielle, before we go any further, who are these Generation Z people?
When were they born? Oh, Pat, why didn't I study that exactly? Let's see, my stepdaughter is 27. She was born in '98, and she is old Generation Y. Gen Z, I believe, is the 2000s through 2015. Got it.
Okay. We like to give some practical advice in these conversations, so there are some takeaways where a listener can just say, okay, here's one, two, or three things I can do over whatever period of time. Let's just start with one thing. What's one thing every business owner who's listening today could change this week that would make younger employees more likely to stick around? At least the ones that they want to stick around, right?
Not all turnover is bad turnover, right? No, that's right. If a company is having unwanted turnover, I always look to see what the pattern is, why people are leaving. Is it because they didn't work out and they were bad employees? That's fine, and that says to me there's a problem with the interview and selection process.
If they're good employees, though, to your question, and they're just not staying, I am the biggest proponent and fan of good onboarding, meaning how you work with the employee when they first show up on day one. And unlike other HR consultants, I don't think at all that onboarding needs to cost money. I don't think it needs to be this prolonged, structured, crazy matrix of KPIs. If your listeners could change one thing, I would say this to them: make the first day that employee works the best day they have ever had in a job, ever. And we don't do that.
Usually, when we think about what somebody's first day looks like, they show up, you put them in a conference room, and they fill out paperwork for an hour or two, and maybe they watch videos like the sexual harassment video or the company orientation video. They come in so excited for their first day, right? They've told everybody about it. They figured out what to wear. They want the boss to like them and them to like the boss.
And then most people just get immediately deflated, because they're sitting by themselves in total boredom and isolation. Paperwork's necessary. Yes, there's a time for that. The Form I-9 has to be done within 72 hours, so we can't ignore the paperwork. But this is what I would do: make the first day the best day.
And I would even back it up and say, make the first hour the best hour. This is what I advise clients to do. It's a time investment, but you're protecting the investment you made in this employee. For the first hour, schedule them to start, even if it's not Monday morning at 9:00 a.m., at a time when you, the owner, have an uninterrupted hour to give them your undivided attention. And in that hour, you're going to not just welcome them and tell them how excited you are, but, and I love this trick, you're going to tell them exactly what you liked about them that caused you to hire them.
It is so flattering for a new employee to hear, "Oh my gosh, the boss already likes me and has noticed some specific good qualities about me." For example, you tell them, "I knew you were the one, because when I walked you in during your interview, you made eye contact and smiled with every single person on your path and said hi to them. I knew your customer service was amazing, and that's why I chose you over 50 other applicants." Give them concrete examples like that. Not just because it flatters them, but because it sets the expectations for them: "Oh, my customer service had better be impeccable." You're putting them on notice about your expectations.
Right. It helps set expectations right out of the gate, doesn't it? Yep, in a very positive way. And then tell them about all the exciting things they're going to be doing for your company, and how their individual contributions are going to make an impact on their co-workers and the rest of the team, because that's what they want to hear. They're not just working tirelessly for a boss; they want to be part of a team, part of something exciting. So paint a picture: this is what your first week is going to look like, but after you get through that, here's a project I can't wait for you to get started on, here's something I think you'll be perfect at, so that they've got something to look forward to.
Because by the time they go home at the end of their first day, everybody they know is going to ask them, "How was your first day? How did it go?" And you want them to say, "I made the right choice. This is going to be fun," rather than, "It was okay. I did paperwork, and then I watched somebody do their work for a while." Forget that. Engineer hour one and day one, even if you do nothing else. I could go on about week one and the first paycheck and the first 90 days, but day one is the thing to do for a takeaway.
That's fantastic. So day one, first hour: schedule time right away so the owner can tell this new hire why they were excited about hiring them, and be specific. Yep. And then number three is to tell them about the exciting things they're going to be doing in their role, in regard to the vision and mission of the company. Yep. Exactly.
Okay. That's very practical and not real difficult. And it's free. And you know what? If that doesn't fit on Monday at 8:30, have them start Tuesday at lunch or whatever. Whatever the business owner needs to do to win their hearts early on.
Yeah. Along those lines, I guess the feeling is that today's younger workers don't want to start at the bottom and work their way up. Is that more of what you were hitting on earlier, that they don't view themselves so much positionally, they just want to be part of the collaboration of a team? Yep, very good observation, Walter. I think that's exactly right. They don't see themselves as, this is an entry-level job, I have to pay my dues, and then I'll move up.
All their lives they've been told that they make an immediate impact. They've been told to advocate for themselves. They've been applauded for whatever effort they put in. And so even if they've got what we consider an entry-level job, I think the key is to give it the most exciting possible spin you can. And even if the job is drudgery, say you're hiring them to be a retail cashier, see if there are embellishments you can give them, special projects that might be meaningful to them personally, something that allows them to feel like an immediate contributor with an immediate impact.
And they won't see themselves as a cashier. They'll see themselves as the right-hand person to the manager. Yeah. Danielle, along those lines, there's the idea of professional development. I was in the Navy, and there's a path that you look ahead to while you're in that entry-level position, right?
How important is it for an employer to cast a vision of, yes, you're starting here, but here's where you can go, and then to facilitate actually accomplishing that? This generation is odd in a way. We were always career, career, career, and then work-life balance started to be a thing in the '90s, and now it's boomeranged so that there's no balance. Personal life comes first, and work is unapologetically secondary. So to your point, Corby, some of them want growth and professional development and to climb a career path, and some of them do not.
And so I like to advise, you can't overcommunicate with these people enough. So start the career conversation early on, instead of just asking where they want to be in five years and saying you'll help them get there. Think about all the options, and ask: do you think you want to take the next step, or do you want to develop yourself here and learn additional skills in this same job? So you're tailoring a plan for everyone. But it all starts with what I'd call overcommunication compared with what we're used to.
Yeah. And what I hear you saying as well is to establish an awareness of what they really want. Right, exactly. We all got to where we are by working hard and going to the next step and the next step and the next step. But if work's not your priority, many people just don't want that aggravation. Yeah. But they still want to be challenged, just in a different way than we're used to.
So does working remotely fit them really well? On the one hand, I could see it's great because it gives you a lot of freedom. Yeah. But it seems to me they do like connection, which I always found you got in the office. But I guess a lot of this generation is used to their relationships being virtual. And it's a big problem, because they may have finished high school or college virtually.
Some of my clients have had issues where Generation Z just doesn't know how to behave civilly in an office setting, because they've never been in one. So they don't know to clean up after themselves in the break room, or not to wear flip-flops to work. Nobody's ever told them. And that's where overcommunication, setting expectations, accountability, and structure come into play if they do come into the office. But if they're remote, and we get a lot of talent remotely ourselves as business owners, I think to protect the investment, you have to manufacture ways to create connections with them.
That could be Slack channels that you encourage them to be on, or regular meetings that aren't just work meetings. I just heard this from one of my clients: once a week they started doing a shout-out, thanking other co-workers, just a 20-minute break in the day. So if you can continue building relationships even when they're remote, that is huge. So Danielle, in the last few minutes, you know what we're all about here. We're all about helping owners build transferable or sellable business value and then planning for their eventual exit.
Give us your thoughts on recruiting and retaining Gen Z, and how it impacts the value of the business and its future transferability and sellability. I like what you said at the beginning of this podcast, Pat, that companies who do it right have a competitive advantage over companies that do it wrong. To me, the careful selection, recruiting, and retention of the good employees that you need is not an HR issue. It's a business value issue. When you lose somebody, you lose experience, you lose the relationships they've built with your stakeholders, you lose their productivity, you lose momentum, and suddenly everything becomes risky for a buyer, right?
When a buyer is looking at two companies, and one has 30–40% turnover every year and the other has 10% turnover every year, I think the buyer sees that the second one has figured out how to keep employees, and would much rather buy into that stability and predictability than wonder what's broken with the first. Is it the work environment? Are the managers incompetent? When you have turnover like that, it's not a generation thing. There's something wrong in your business processes that is causing it.
And I think that's going to make potential buyers squeamish. It's an easy red flag to see when you look at turnover numbers. And again, you can't blame Generation Z. It's up to us to adapt so that our systems allow them to stay. Yeah. Very good.
Excellent. Walter, Corby, any other questions from you? And then Danielle, if there's anything we should have asked you that we didn't, feel free to tell us what that is. No, I think you hit everything I wanted to talk about. I would just reiterate that we are now competing for employees the same way we compete for customers in business.
And so, with Generation Z, for all we know about them and have seen about them, it's up to us to adapt our processes. We can change processes. We can't change this generation. So this is on us to figure them out, so that we are much more attractive to potential buyers than the companies that have lots and lots of churn. Fantastic.
In closing, is there anything that you would like to promote today? Well, I will say this. I have a short email that I send out every two weeks to business owners with a practical HR tip. I call it not the fluffy HR, not the kumbaya HR stuff, just practical tips like we talked about today. Yeah.
And if anybody would like to go to my website and sign up for that biweekly newsletter, I'd love to have you join the HR Allies community. Fantastic. Okay. And if they want to contact you, that's how they could do it, too, through the website? Yep, through the website, hrallies.com.
All right. Well, that's fantastic. So, listeners, you got non-fluffy, very practical advice today. If you don't do anything else, take a look at that onboarding process and make sure that first day, that first hour, is the best they've ever experienced. Listen to it again if you have to. And if there's anything else, contact Danielle; she'd be more than happy to talk to you and see how she might be able to serve you even beyond that.
And then, if you need or want help building that valuable, transferable, sellable business or planning that eventual exit, you can reach Walter, Corby, and myself through our website, ennislp.com. And if you'd prefer to move through a planning process at your own pace and try to DIY it, maybe with a sanity check along the way with us dipping in every once in a while, visit exitreadiness.com and explore our new platform, ExitReadiness® DIY™. It's a platform that combines our proven framework for planning, practical tools, assessments, and educational resources, and it's designed to help you make better decisions along the way and create more options for your exit. So thank you for listening.
If you found today's conversation helpful, please consider liking it, sharing it on social media, and subscribing. And until next time on the ExitReadiness® PODCAST, this is Pat Ennis and Walter Deyhle with Corby Megorden signing off. Thank you.
