Austin's tech sector prepares for a Gen Z invasion

Austin American-Statesman |

--Olivia Baalman has worked as a software engineer at Dell Technologies since July, making the 22-year-old one of roughly 800 Generation Z workers trickling into the massive tech company.

And as Baalman shifted from student intern to full-time employee last year, she watched the Round Rock-based company revamp itself to make room for it's youngest hires.

Now, she can work in Dell's collaboration spaces, grab a bite to eat in an updated cafeteria or take a break with a game of ping pong.

"It felt like things had evolved so much within a short amount of time," she said. "It was really cool to see."

Like companies around the country, Dell is preparing for Gen Z, classified as those having been born after 1996. It's the most racially and ethnically diverse generation yet, according to a Pew Research Center report, and a group in which most can't remember the terrorist attacks and grew up with a smartphone in their hand.

Although Gen Z doesn't make up much of the workforce yet, Austin-based research and consulting firm Center for Generational Kinetics estimates that in the next five years workers from that age group will become the country and world's fastest-growing segment in the workplace and marketplace.

Jason Dorsey, the center's president, said tech companies shouldn't think about Gen Z as the second wave of millennials, the term applied to people born between roughly 1981 and 1996.

"We know Gen Z is very different from millennials, and we've done numerous studies that have shown this," he said. The center works with roughly 180 clients around the globe -- 25 percent of them tech companies -- to help recruit and retain different generations of workers.

Companies will have to adjust to Gen Z's reliance on their phones, recruit through the latest social tools like YouTube and Snapchat and -- especially for startup companies -- show the company's financial stability, Dorsey said.

A recent study from the center found that 12 percent of Gen Z is already saving for retirement. In comparison, millennials would rather put their money in a savings account than a workplace retirement plan, the center found.

"Gen Z is saying: 'I want to know it's stable. I want to know the path for me,'" Dorsey said. "(They) want to know their career path upfront."

And tech companies are gearing up for the change.

'Newest, freshest ideas'

IBM, which has a large presence in Austin, released a global survey to help clients understand Gen Z as consumers. Dell recently surveyed 16 to 23 year olds from around the globe and found that Gen Zers aspire to work with cutting-edge technology and believe technology will create a more equitable work environment.

Dell has also rolled out several initiatives -- redesigning roughly 200 work spaces, increasing the number of Gen Z and millennial hires and creating a "Learning Studio" to give employees access to training at any time.

Steve Price, Dell's executive vice president and chief human resources offer, estimates that nearly 50 percent of Dell's workforce is made up of millennials. Gen Z makes up less than 1 percent of Dell's workforce, although it's steadily increasing.

"This is an industry that moves at the speed of light. Change is happening all the time, the pace and speed of changes in technology is faster than it's ever been and it's only going to get faster," Price told the American-Statesman. "If you want to stay relevant and competitive in this space, you always have to be bringing in the newest, freshest ideas from the best colleges and universities across the globe."

According to Price, Dell worked on the Gen Z study to better understand its next generation of workers.

"We always want to stay relevant, we always want to stay contemporary, and we want to stay modern," Price said.

Tech companies aren't the only ones paying attention to the next generation of workers. The University of Texas at Austin is preparing its Gen Z students for the real world.

Ruth Franks, UT's College of Natural Sciences director of career services, said she's noticed a shift in where students go after they graduate based on a company's geography, technology in the recruitment process and workplace culture.

"I think that the company culture is going to be very important with respect to recruiting and retaining Gen Z," Franks said.

Even the college has shifted to "experiential learning" to keep up with Gen Z. The classrooms implement project-based learning, simulated experiments and group work.

"That is a really big shift," Franks said. "These students are much much better at working in the real world."

That change matches the research, which has found that Gen Z is looking for ways to collaborate. Dell recommended that other employers offer tools like augmented reality, virtual reality and flexible work environments to help teams connect.

Karen Scully-Clemmons, lead senior career coach in UT's College of Natural Sciences, said she's noticed a difference in the way companies recruit younger hires. Those efforts seem to have shifted away from Facebook and more toward newer social media platforms like Instagram and Snapchat.

"One of the broader changes -- even in the past five years -- is the type of technology," Scully-Clemmons said. "I think (companies) that are having more success are the ones who have figured out how to distill their message in 15 to 60 seconds."

Opportunities and culture

Jonas Wechsler, a computer science student graduating in May, is one of the UT Gen Z students gearing up for a job in Austin's tech industry. He said he has accepted a data position at online jobs listing company Indeed after weighing another offer from online retail giant Amazon.com.

Wechsler, 21, said he chose Indeed because he wanted to work with a company that is keeping up with the latest trends and allows him to advance his understanding of computer science.

"I just felt that right out of college I wanted to do something that was more theoretical" rather than server upkeep and standard software engineering duties, Wechsler said.

His decision also came down to which companies had more opportunities for advancement and a positive office culture.

"At least to me, it's important to have a place that will be pleasant to work in," Wechsler said.

Dre Coldwell, a UT graduate and senior software engineer for Dell Digital, also focused on starting her career at a large company. Coldwell, a 24-year-old who is right at the Millennial and Gen Z dividing line, has worked at the company for two and a half years.

"One thing that was really important to me was that I wanted to be working at a big company -- somewhere where I knew my job would be secure," she said.

Coldwell, like Baalman at Dell, said she's also seen the company transform in a short period of time. Software engineers within Dell Digital work in pairs -- a recent change for the company -- in an effort to improve production and increase collaboration.

And like most tech companies in the 21st Century, Dell provides time for drinks, snacks and a game of ping pong.

"I've seen the shift in the last year," Coldwell said. "They understand that you have to have the snacks, you have to have the drinks. It's not a big price to pay to make people happy."

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