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There is an old joke: when someone says "young people these days have no manners," the reply is, "that line is even inscribed on ancient stone tablets." Generational conflict has always existed throughout history. In the effort to study it, cohorts have been given names — the Baby Boomers, the 86 generation, Generation X — and every newly named generation has been placed on the examination table of every older one.
The most recent of these, now almost a meme in its own right, is undeniably the MZ generation. It combines two generations into one bracket with a broader age spectrum than earlier classifications, but the gap with the older generations that society feels in a general way is bigger than it was for any previous cohort.
On the front line of actual companies, that gap feels even more dramatic. "Young employees won't do anything outside of what they want to do," "They clock off ahead of their supervisors the moment the day ends," "They treat working from home as a given but still want higher rewards" — many companies are voicing how hard the younger generation is to manage. The deeper reason why management is so difficult is that, unlike previous generations, retention of this cohort is extraordinarily hard — and even recruiting them is hard to begin with.
Feeling these communication difficulties, older managers have often labeled the MZ generation as "cheeky."
That perception gap even surfaced in the government's weekly-working-hours debate, where a remark about "a generation that is willing to shout, 'Boss, come out! Chairman, come out!'" drew public scorn.
Any "generation" is made up of too many and too varied individuals to pin down its behaviors and their causes with any certainty. But it helps to start from the very point raised above — that retaining and attracting this talent is so difficult.
Traditionally, the way companies retained and attracted talent was by securing "competitive compensation." Offering more than competitors was essentially the only retention tool. But when talent competition heats up, companies end up burning through labor costs at competitive rates, and it is impossible for every company to sustain "better-than-peers" compensation competitiveness indefinitely.
Because offering ever-higher rewards is hard, companies chose to defer the cost. The concept is
many Korean companies offered high job security and, in exchange, promised higher rewards in the future, reducing the immediate burden. This is how Korea's deeply rooted seniority-based compensation systems, centered on the hobong (pay step) system, were built.
This reward system is highly effective, as long as the company keeps growing and no external job market emerges to poach its people.
It creates a kind of virtuous cycle: the company can hire more people on the promise of continuing employment and incrementally rising compensation, and then cover the higher pay of experienced workers and managers through the results produced by a larger business base.
When the precondition of continuous growth breaks, the virtuous cycle turns into a vicious one. Even if the business cannot keep growing, the company has already committed to future rewards and promotions for the people it hired — so it has no choice but to minimize new hiring. That in turn produces an inverted-pyramid "HR congestion," in which there are more manager-level employees than there are people doing the actual work.
To resolve this HR congestion, many Korean companies have been lowering the ceiling of job security. Examples include cutting the six-step job level system down to five or four, or tightening the requirements for promotion. At the same time, they try to dilute the weight of job levels and promote a more horizontal organizational culture by consolidating titles.
Naturally, this direction erodes trust and expectation in the "future value" of rewards. A seniority-based compensation system attracts and retains people through the future value of rewards, so if people are leaving after only a few years of service, the future value of rewards is no longer an attractive proposition for them.
Employee tenure is getting shorter, especially in growing industries, and growth sectors that have to compete globally are feeling the retention pressure most acutely. Take the most fiercely competitive of all — the battery sector — where average employee tenure has already dropped to 3.3 years, a sharp contrast to the 11.1 years in Korea's automotive industry.
Alongside the changes in job level systems, the macroeconomic picture also reduces the attractiveness of "future rewards." As economic growth slows, the rate at which promised yearly raises actually materialize has slowed too. And because the cost of the assets people need for daily life (like housing) has risen much faster than those raises, generations that have to build the foundations of their lives feel that gap especially keenly.
If the expected future reward is low, there is even less reason to tolerate high workloads and low current pay at a current employer.
Another keyword is "meritocracy." The 20- and 30-somethings who form the core of today's workforce are the generation that has broken through the highest levels of competition since childhood. That experience of hyper-competition has been internalized as a demand for fair measurement of performance. To them, the seniority-based evaluation method — where the highest ratings go in sequence to the most senior employees — looks like a symbol of unfairness.
This heightened sensitivity to fairness inevitably surfaces as a demand for high transparency in every internal decision, including evaluation and reward.
What is more, demands for fairness and transparency are no longer expressed purely as in-company grievances. They are shared widely on social media and job portals, and it is now common for companies to be branded as
"black firms." In companies where such negative experiences accumulate, younger employees increasingly engage in what has come to be called "quiet quitting."
In the end, the practice of securing cheap, available labor through the promise of future rewards — long treated as an article of faith — along with the lifelong employment and seniority-based HR model built on the assumption of continuous growth, has been rendered powerless. The result is the extreme turnover issues of today's generation. And because the older generation has failed to find a fitting answer to this, they have written it off as a generational issue and dismissed it as "cheekiness."
Fundamentally solving the issue means thinking about how to strengthen compensation competitiveness further. But as discussed earlier, competing on compensation inevitably takes on the shape of a
"chicken game," and offsetting the erosion of future reward value caused by low growth requires even greater rewards to keep employing these workers. This is hardly an efficient strategy.
A positive employee experience can be more effective at attracting and retaining people than higher compensation alone. If we can deliver an adequate level of compensation satisfaction along with higher-quality QOWL (Quality of Working Life), that will benefit both the company and its employees.
One area many companies are pushing to expand in the effort to improve employee experience is the concept of Work-Life Harmonization.
Beyond extending in-office work to include remote and hybrid arrangements, this includes messaging apps, cloud-based task management, and the app-driven execution of interactions and communications with employees.
Immediate diagnosis and data management of the employee experience that emerges through these interactions — and the ability to use that data to
detect factors that raise turnover risk and burnout as quickly as possible and respond to them at speed — is the key to solving the issues raised above in a non-monetary way.
As we have seen, the fundamental cause of many of these problems is a seniority-based model built on the assumption of continuous growth. As noted, the pressure to change is especially strong in areas where global competition is intensifying, which calls for more active change management.
That change would include building flexible reward systems centered more on competitiveness in the job market, setting non-standard goals grounded in job expertise and managing performance through real-time and continuous feedback, and running job level systems built on role rather than on seniority. Because such change will fundamentally shake up the current formal rating system, companies first need to think about the required level and definition of the job expertise and skills they need — and about data-driven evaluation systems that can identify the people best suited to perform the required roles.