Attracting (And Keeping) Gen Z in the Manufacturing Workforce

What matters to Generation Z, and why are they so hard to attract and keep in manufacturing jobs? These are the questions Vijay Sarathy, senior advisor with McKinsey's chemical practice, addressed at the American Chemistry Council's annual Responsible Care Conference in Fort Lauderdale, Fla., in a session on May 7, 2025.

Sarathy said that with a flood of domestic and foreign investment coming into the country, U.S. manufacturing is in better shape now than perhaps it ever has been. Additionally, there has been a surge in new technologies in manufacturing, promising a fourth industrial revolution with increased productivity. Finally, a younger, more tech-savvy generation that operates naturally in an increasingly digital world is entering the workforce.

Even though this new generation of digital natives is available to work, they aren't flocking to manufacturing, let alone chemicals. Sarathy said only six out of 10 manufacturing jobs are occupied and many companies have openings that they have difficulty filling.

“[That] is an acute problem for us in our industry, because a lot of us are going to retire in the next five to 10 years,” Sarathy said. “And to make matters worse, there's a lot of data to suggest that some of the new generation that do come in don't stick around for that long. They leave.”

Sarathy presented information from surveys comparing work motivations between Generation Z (Gen Z) - people born between 1997 and 2012 - and baby boomers - people born between 1946-1964 - for joining, staying, and leaving a company, and said he has not seen “a more striking difference between generations.”

“What we see is for perhaps the first time in history, we have maybe four or five, depending on how you count, generations in the workplace at the same time. They have different aspirations, different dreams, they expect different things,” Sarathy said. Add to that the fact that the chemical manufacturing industry is standardized and is not designed to handle multiple generations, he said.

What Matters to Gen Z and How to Keep Them?

Data from Sarathy's survey showed that baby boomers are driven to join and stay at a company based on the total compensation package - and they leave for the same reason. This could not be more different from Gen Z, who rank compensation as the No. 6 reason for joining and No. 8 for staying. Although compensation is ranked as the third-highest reason Gen Z leaves companies, it is clearly not the most important factor.

Sarathy said that typically, when employees are unhappy, manufacturing jobs throw more money at them, pointing out that manufacturing wages have increased 21% in the U.S. since COVID-19.

“And yet we are not attracting people, so clearly we are throwing money at people who don't value money nearly as much as [other generations] do,” he said.

The No. 1 thing that attracts Gen Z to a job, according to the survey, is reliable and supportive coworkers. Gen Z also listed workplace flexibility, career advancement opportunities, and meaningful work among the top priorities in a job. Gen Z was also the only generation of those surveyed to list safety, both psychological and physical, as a top three priority for the workplace.

Sarathy said the smartest things companies can do to attract (and keep) younger generations in the workforce include:

• Start off right: The first 90 days are important when hiring anyone, but particularly when it comes to Gen Z, as that is when most attrition happens.

“You have got to pay really, really careful attention to onboarding these people,” he said. “Time and effort need to be put into making sure that you welcome these people [and] support them, so they feel this is a place where they want to make a career in the first 90 days.”

• Turn managers into leaders: Unburdening frontline managers through restructuring can help managers be the leaders and mentors Gen Z employees are looking for. By freeing up managerial roles from process burdens, leaders' schedules are open to quality time to properly train and care for employees.

• Remember that meaning matters: Meaningful work is consistently a top priority for Gen Z workers. Bolstering industry reputation is essential for attracting new workers, and providing broader context to the meaning of jobs helps drive the “why” the new generation is looking for. Sarathy said his practice emphasizes sustainability innovation in the chemical industry as a key recruitment tool.

• Rethink how jobs are structured: Sarathy highlighted that one attribute of Gen Z is a sense of agency over work and having opportunities to problem solve. “They feel like 'I did it myself.' [That] kind of thing is important to them,” he said.

According to Sarathy, even restructuring processes to where workers have the ability to fix small issues in equipment, rather than waiting for maintenance, can make a difference. Additionally, in the age of hybrid work, Gen Z is looking for workplace flexibility. While hybrid work is not possible for factory manufacturing jobs, Sarathy recommends implementing flexible hours opportunities, when possible, to help attract more talent.

• Invest in career development: Investing in career growth opportunities and showing Gen Z employees where they can grow and develop their skills within a company is key to job satisfaction and retention for the younger generation.

If chemical companies want to take advantage of the Gen Z workforce, they must be willing to restructure and prioritize the unique needs of the generation and continue promoting the industry as an attractive place for the new generation to find meaningful work.