Is Gen Z risk averse?
Written by Claire O'Brien
Imagine coming of age in a world that makes the volatility of the Bitcoin market look stable. That’s the reality for Gen Z, those born between 1997 and 2013.
In an era defined by unpredictability (climate change, a global pandemic, financial crises and international conflicts), it’s not surprising that Generation Z takes a different approach to risk than previous generations. What is surprising is how cautious that approach can be. Also known as “Generation Sensible,“ they are shaping up to be more pragmatic than millennials.
The drawback? They may struggle to develop essential coping skills and may miss out on certain rewards that can accompany risk. Calculated risks, after all, can lead to new career opportunities, foster business innovation, teach us lessons from failure and help us step out of our comfort zones to experience personal growth.
So, what happens when an entire generation, shaped by the uncertainties of its times, leans toward avoiding risk — but only in certain situations? Jamie Johnson, MS, NCC, CCC, career advisor at University of Phoenix, weighs in.
Gen Z’s risk paradox
Generation Z’s risk aversion has captured the attention of many researchers, who look at everything from their financial strategies to their early adoption of bucket lists. Interestingly, studies reveal this rising generation tends to blend caution in some areas, like alcohol consumption, with boldness in others, such as their comfort level with sharing data online.
Johnson comments on this dichotomy: “We have to go back to their foundational experiences and what influenced them to make the certain choices they’re making now. For example, one Gen Z client shared he is seeking new work opportunities in Bitcoin, part of the crypto revolution in digital investing. He loves the idea of risks and possible rewards and helping people make new choices in investing. Yet he still lives at home and would prefer to work remotely.”
Breaking down Gen Z’s approach to risk
That blend of practicality and boldness not only defines Gen Z’s present choices but also has implications for how they navigate their education and careers, trends that will ultimately shape future business culture.
In education
So, how does Generation Z’s approach to education and career stack up against their risk aversion? Johnson has observed a shift in overall educational preferences, noting the generation’s inclination toward more practical and secure options.
“They’re making all the traditional choices that students make, but there’s a more practical bent to what they choose because they’ve come through a pandemic,” she says.
While traditional education pathways — including higher education and various majors — still attract Gen Z, their career expectations may have changed. Johnson notes that future earning potential is a genuine concern, but so is interesting work combined with a healthy work–life balance.
At work
As Generation Z is expected to make up 30% of the U.S. workforce by 2029, their unique attitude toward risk could potentially make for a dramatic shakeup at work. Johnson specifically predicts a new wave of flexibility driven by the younger cohort’s work–life balance expectations.
“We’ll see more opportunities for people to be flexible with their work,” she says. “Even in the corporate setting, I think we’ll see more freedom with that. And I think that will be the new wave of creativity in the workplace because that’s normal for them. They expect it.”
Employers, meanwhile, need to take note. “I know a recent grad who is not interested in working hybrid or in an office due to his high anxiety — and he’s not the only one,” Johnson says.
With regard to mental health
Gen Zers’ aversion to certain risks and insistence on work–life balance may be partially explained by their personal experience with mental health: A survey of more than 1,000 participants ages 18 to 24 reveals that 42% have a diagnosed mental health condition.
Even more startling, 31% rated their overall mental health as poor in 2022.
On the positive side, 87% of the survey participants feel comfortable talking about mental health — and are more likely to have taken mental health days off work or school and discuss mental health issues with supervisors. This willingness to prioritize and discuss mental health in their careers and personal lives may drive employers to offer digital and in-person mental health-based benefits.
“Flexibility to take care of themselves and their family is important when considering joining a company,” Johnson adds.
The future of work according to Gen Z
The current narrative of Generation Z’s risk aversion is only the beginning.
Johnson explains: “They will take risks, but we need to define what it means in their world. They dealt with COVID-19. They dealt with a world turned upside down. And the world has changed — technology brings the workplace to them, and that means the world is their oyster. How they take risks won’t be the way a baby boomer or Gen Xer would look at it, because that wasn’t even available.”
This generation’s approach to risk has been shaped by transformative global events and the generation’s unparalleled digital connectivity. Bear this in mind then as they carve out their space in the workforce over the next decade, especially with regard to leadership.
“That’s when we’ll see true work–life balance,” Johnson predicts. “They’re going to be leading the charge. Millennials brought it. Gen Zers will make it happen. They’ll be great bosses to work for.”
Career resources for Gen Z (and everybody) at University of Phoenix
Whether you’re a Gen Zer, Gen Xer, millennial or boomer, UOPX offers a variety of resources to help students, alumni and others prepare for their career journeys. Explore the following resources.
- Career Services for Life® commitment: Available to UOPX students and graduates, this offering comprises complimentary career coaching, including guidance on how to build a personal brand and write a resumé.
- Free career resources: Browse a range of downloadable guides and templates to help you optimize your LinkedIn® profile, get ready for a job interview and write a resumé and cover letter.
- Career With Confidence™ newsletter: Get career insights every week via UOPX’s LinkedIn newsletter.
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ABOUT THE AUTHOR
A graduate of Johns Hopkins University and its Writing Seminars program and winner of the Stephen A. Dixon Literary Prize, Michael Feder brings an eye for detail and a passion for research to every article he writes. His academic and professional background includes experience in marketing, content development, script writing and SEO. Today, he works as a multimedia specialist at University of Phoenix where he covers a variety of topics ranging from healthcare to IT.
ABOUT THE REVIEWER
Christina Neider is the dean of the University of Phoenix College of Social and Behavioral Sciences. Neider’s career spans more than 30 years in academia, healthcare and the U.S. Air Force. She has held several academic leadership roles at University of Phoenix, and she is the Vice President of membership for the Arizona Chapter of the Healthcare Information and Management Systems Society.
This article has been vetted by University of Phoenix's editorial advisory committee.
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