03.06.2025

A missed opportunity for growth: research shows untapped potential for Gen Z and small businesses

Small businesses are missing out on the power of Gen Z employees to help them weather economic and recruitment challenges, according to a new study on attitudes and culture in the workplace.

The research, from HR and employment law consultancy Citation, suggests that misconceptions about Gen Z priorities in the workplace could be contributing to this lost opportunity for growth. Small business owners chose flexibility and remote work as their perceived top priority for Gen Z employees (chosen by 55%), but Gen Zers themselves told researchers they value a positive and collaborative working environment more highly.

77% of Gen Z said working for a business with a positive culture was the most important aspect of working life. However, just a third (31%) of small business owners believed a collaborative and inclusive working environment was a priority for this generation. Offering flexible work was the strategy implemented most often by business owners to attract Gen Z employees, by 35% of respondents. In reality, only 60% of Gen Z employees said the ability to work from home was important.

The results also indicate that Gen Z employees should look more closely at small businesses when evaluating their future career path. Currently, just 20 per cent of Gen Zers said they would like to work for a small or local business. This comes despite a fifth (18%) of those working in large businesses reporting a negative experience of work and almost half (49%) stating that their employer does not understand their needs.

Comparatively, almost three quarters (73%) of SME business owners said Gen Z have made a valuable contribution to their workplace and 79 per cent said that they would hire Gen Zers to work in their business. A similar proportion of these businesses (72%) said they are confident in their ability to adapt to future generations, yet more than half (51%) said they currently work with fewer than 10 Gen Z team members.

Overall, the research paints a picture of untapped potential for Gen Z employees and small businesses. These companies may not be the first thought for young people when entering the world of work, but they could be a crucial piece of the puzzle for a slice of the economy currently under serious pressure.

“It’s been a tough year for small businesses, who have been navigating serious economic and recruitment challenges. Simultaneously, many Gen Z employees are yet to really find their place in the world of work and are facing serious obstacles of their own. Our research shows that there is a real opportunity for these two groups to support one another. For small businesses, embracing the skills, energy, and creativity of Gen Z is a real opportunity to tap into the some of the greatest young talent on the market,” said Matt Stewart, Managing Director at Citation.

“Discussion of Gen Z’s role in the workplace has been loud, and they’re often portrayed as incompatible with today’s realities of work. Our data shows that there is a fundamental misunderstanding of Gen Z’s priorities in the workplace, and that businesses could be doing more to make their workplaces inclusive, productive and collaborative homes for this powerful generation.”

For more information, visit: Citation | Research shows untapped potential for Gen Z and small businesses

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