As boomers exit the workforce, Gen Z is changing how US companies hire

As the oldest members of the US workforce step into retirement, a new generation is quietly but steadily taking their place. The transition is not just numerical; it is strategic. With baby boomers exiting leadership roles and institutional memory, companies across the United States are re-evaluating how they hire, train and retain talent. At the center of this shift is Generation Z. In the third quarter of 2025, nearly 57% of global employers, including those in the US, reported that they are actively future-proofing their HR strategies to prepare for the departure of senior employees, according to the ManpowerGroup Employment Outlook Survey (Q3 2025). The sectors most impacted, including healthcare, logistics, IT, and energy, are also the ones prioritising internal succession planning, skill transfer, and onboarding strategies tailored to younger professionals.

A generational handover

Boomers, born between 1946 and 1964, currently account for around 18% of the US labor force. Their gradual exit is not a surprise, but the implications are far-reaching. Their departure leaves a gap not just in numbers but in leadership style, work ethic shaped by decades of face-to-face business, and long-standing industry experience. Employers, especially those in industries like manufacturing, infrastructure, and healthcare, are now looking to Gen Z workers to fill roles that require both adaptability and long-term commitment. This handover is taking place at a time when the US hiring outlook stands at 30%, higher than the global average (24%), but static compared to the same quarter last year. The plateau, is due to caution. Employers are hiring, but deliberately. They are adjusting expectations, job descriptions, and training modules to better match Gen Z’s capabilities and preferences.

Hiring Gen Z: What’s different?

A March 2025 HR Dive analysis revealed that US employers are actively working to attract and retain Gen Z talent, not just because of workforce need, but because of the potential this generation brings. Gen Z workers are digital natives, known for their fluency with AI tools, ability to multitask across platforms, and openness to hybrid or fully remote work structures. However, hiring managers also report mixed experiences with Gen Z candidates. Challenges such as communication gaps, lack of feedback responsiveness, and differing interpretations of professionalism are recurring themes. A study by Intelligent.com reveals that 60% of US hiring managers had to let go of at least one Gen Z hire shortly after onboarding due to unmet expectations. Yet, these challenges have not deterred companies from investing in Gen Z. Instead, they are refining their approach. Many are adopting skills-based hiring models, shifting the focus from degrees to competencies, especially in roles related to data analysis, AI, and operations. This strategy is proving essential as college enrolment patterns shift and more young professionals pursue non-linear education paths.

What Gen Z wants and what companies are offering

To retain Gen Z employees, companies are building in more than just compensation. In 2025, Gen Z places high value on:

Employers in the US are responding by reimagining job design. Performance reviews are becoming more continuous rather than annual. Internal mobility is being tracked and promoted more openly. Mentorship programs, once informal, are now being structured to provide multi-generational knowledge transfer. Additionally, companies are recognising the importance of soft skill training, particularly in sectors like IT, healthcare, and finance. Communication, emotional intelligence, and collaboration are now being formally taught in onboarding and professional development programs.

Preparing for the next chapter

The ManpowerGroup report also highlights that industries with a high dependence on institutional knowledge, such as energy, logistics, and healthcare, are among the most proactive in adjusting for generational transitions. These sectors report the highest levels of preparedness for boomer retirement, with over 60% of employers implementing retention and replacement strategies. In the US, this preparedness is also driving investment in automation. About 61% of companies globally, including those in North America, are increasing their use of automation to streamline repetitive tasks. While this shift might reduce headcount in certain areas, it also opens up higher-order roles for Gen Z candidates skilled in data, design thinking, and systems operations.

The generational workplace is here

The US workforce in 2025 is a complex blend of outgoing experience and incoming innovation. As baby boomers step back, they leave behind industries and structures that need updating, not just in operations, but in how people are hired, trained, and empowered. Gen Z, in turn, brings a mindset shaped by technology, fluidity, and value-driven choices. Companies that recognise this shift and build bridges between generations rather than walls are likely to lead the way in the evolving employment landscape. The question is no longer whether Gen Z is ready for the workforce, but whether the workforce is ready for Gen Z.TOI Education is on WhatsApp now. Follow us here.