As Gen Z enters the workforce and the large baby boomer generation ages out of it, Burton, founder of recruitment firm Chalker Group, said the exchange will erase millions nationally from the workforce — a dynamic accelerated by the pandemic that led many older workers to retire sooner than they would have otherwise. 

Additionally, Gen Z is considerably smaller than its immediate predecessor. In the nation’s 100 largest metro areas, the size of Gen Z is about 3.6% smaller than the millennial generation — translating to gaps of at least 10,000 potential employees in 58 of those metros.

Experts say the one-two punch of these demographic shifts and reduced immigration add up to a looming workforce crisis for many businesses — and make it critical for employers to successfully recruit Gen Z. To this point, Burton said many companies are taking their eye off the ball.

While managers often bemoan Gen Z’s penchant for changing jobs quicklyits open discussions of pay and its refusal to compromise on work-life balance as “problems” with the youngest generation in the workforce, experts say the generation’s relatively small size is the real problem employers need to address.

“Companies really need to be thinking about how they’re going to recruit 10 years from now,” Burton said. 

Employers that fail to adapt could be in for years of hiring challenges, which could hamstring growth opportunities and limit productivity, among other consequences. Adapting is likely to require a rethinking of talent pipelines, hiring strategies, job requirements and workplace policies.

Higher education institutions have been planning for the challenges posed by dropping birth rates for years. But while colleges brace for what they call the “enrollment cliff,” experts say many businesses are unprepared for the workforce cliff that will follow — barring substantial changes on the immigration front.

The number of retirements among baby boomers will only grow as all baby boomers will be 65 or older by 2030. By 2034, older adults will outnumber children for the first time in U.S. history.

“What is shocking is how many companies are still waiting it out. That this is going to get better. No, it’s not. It will get better than where we are now, but we have been at this trajectory for some time now,” said Ron Hetrick, a senior labor economist at Lightcast.

Bill Frey, senior fellow at Brookings Institution, said employers and communities need to be proactive when it comes to ensuring the long-term sustainability of their workforce. 

“In terms of the next couple of years, this is what they need to start paying attention to,” Frey said. 

That includes making strategic decisions to invest in a younger generation that is both smaller and more diverse. 

“A lot more training opportunities need to be available for them,” Frey said. “Some of it is available in public schools. Some of it isn’t. Some of it is available in junior college or training programs. Some of it isn’t. What we’re going to have to do is invest in this younger generation.”

The Gen Z Problem: How metros compare

A look at how metros stack up when it comes to their Gen Z population

METROPOPULATION AGES 10-24POPULATION AGES 25-39RAW GAP BETWEEN 10-24 AND 25-39PERCENTAGE GAP BETWEEN 10-24 AND 25-39WORKERS AGING IN TO WORKFORCE NEXT 15 YEARSWORKERS AGING OUT OF WORKFORCE (NEXT 15 YEARS)RAW GAP BETWEEN AGING IN AND AGING OUT
New York-Newark-Jersey City, NY-NJ-PA3,508,4374,140,148-631,711-15.3%3,508,4373,804,978-296,541
Los Angeles-Long Beach-Anaheim, CA2,574,0983,005,942-431,844-14.4%2,574,0982,482,24291,856
San Francisco782,5951,124,499-341,904-30.4%782,595908,999-126,404
Seattle-Tacoma-Bellevue, WA690,782971,143-280,361-28.9%690,782736,126-45,344
Washington-Arlington-Alexandria, DC-VA-MD-WV1,182,7591,408,565-225,806-16%1,182,7591,194,119-11,360
Denver-Aurora-Lakewood, CO536,802718,621-181,819-25.3%536,802534,0572,745
Miami-Fort Lauderdale-Pompano Beach, FL1,063,6361,221,203-157,567-12.9%1,063,6361,226,908-163,272
Chicago-Naperville-Elgin, IL-IN-WI1,867,2262,015,073-147,847-7.3%1,867,2261,831,76035,466
Portland-Vancouver-Hillsboro, OR-WA439,268572,014-132,746-23.2%439,268461,698-22,430
San Diego-Chula Vista-Carlsbad, CA661,802783,878-122,076-15.6%661,802595,93465,868

Article written by Ty West and Andy Medici