Medium-sized companies are in vogue among the younger generation and are becoming increasingly important. A 2020 study by the German Economic Institute (IW) even states that both Generation Z and millennials prefer SMEs to large corporations, start-ups and self-employment. In reality, however, many SMEs are struggling with a shortage of skilled workers. What do the younger generations expect from their employer and what do SMEs need to offer to appeal to this young target group?

Sustainable and fulfilling

Generation Z attaches great importance to making a meaningful contribution. Sustainability and social responsibility are particularly important here. A 2019 study by the German Association of Small and Medium-Sized Enterprises (BVMW) shows that more than 80% of respondents believe that companies have a social responsibility and should be committed to sustainability. If SMEs align their business models and products with sustainability and get involved in social projects, this is to their advantage.

The job is an important part of their lifestyle. Accordingly, it should also be representative and in line with their values. SMEs should adapt their image and working conditions to the expectations of this generation.


The digital expectations of the younger generation are also an important factor. This generation has grown up with digital media and expects the same from their employer. In addition to high-quality technology, digitalization and the use of digital tools are also crucial. SMEs should therefore bring themselves up to date with the latest technology and digitalize their business processes and business model in order to meet the expectations of Generation Z.


A secure job with permanent contracts, appropriate remuneration and pension provision is also very important. However, a promising business model also plays a role in ensuring the continued existence of the employer. SMEs should therefore continue to develop and adapt their business models to the needs of Generation Z.

Work-life balance

A good work-life balance and flexible working hours are of great importance. A 2020 study by the German Economic Institute (IW) shows that more than 60% of respondents consider a good work-life balance to be the most important factor when choosing an employer. SMEs can score points here by offering flexible working time models and the option of working from home. The use of digital tools also enables a flexible and location-independent way of working.


The opportunity for further training and career development is also very important for Generation Z. A 2018 study by the Association of German Chambers of Industry and Commerce (DIHK) shows that more than 70% of respondents consider further training to be an important factor when choosing an employer. SMEs can score points here by offering their employees further training and career opportunities.

Where are the applications from Generation Z?

This description of the desired working environment does not exactly describe the image that forms in your mind when you think of a typical medium-sized company. This may explain, at least to a small extent, why SMEs are highly rated by the younger generation in surveys, but struggle to find employees. However, SMEs are in a state of flux. And they must continue to evolve in order to meet the needs of Generation Z. By adapting business models, working conditions and further training opportunities, they can not only become more attractive to (young) talent but also make existing employees and customers more satisfied.

Effective advice from MORGEN: Solving real problems

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About us:

MORGEN is a specialized management consultancy that focuses on the development of new business models for medium-sized companies. In particular, it supports owner-managed companies in their future-proof transformation. Knowledge transfer is at the heart of its consulting activities, which is why the MORGEN Blog regularly publishes articles on key topics such as digitalization, transformation, customer centricity and sustainability.

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