Learn the economic realities that have reshaped the modern workplace and why the youngest generation’s approach to career loyalty is a rational response.
For generations, job loyalty was preached as a cardinal virtue of a good employee. The prevailing wisdom was that if you dedicated yourself to a single company, worked hard, and paid your dues, the company would, in turn, take care of you with promotions, raises, and a secure retirement. This unwritten social contract was the foundation of the traditional career path. However, the economic landscape has undergone a seismic shift over the past few decades, and that old contract has been rendered null and void.
1. They know that loyalty is rarely rewarded with market-rate pay.
This is the central economic truth that drives Gen Z’s behavior. They have seen that internal annual raises for loyal employees often hover in the low single digits, barely keeping pace with inflation. In contrast, the salary increase that can be achieved by switching to a new company is frequently 10% to 20% or more. This “loyalty tax”—the penalty you pay for staying put—is a powerful disincentive to long-term tenure.
Gen Z understands that the most effective and reliable way to ensure their compensation keeps up with their market value is to change jobs. They see their relationship with an employer as a business transaction, and they are not afraid to seek a better deal elsewhere.
2. They have seen that pensions and guaranteed retirements are gone.
The traditional model of loyalty was built on a foundation of defined-benefit pensions, where a company guaranteed its long-term employees a steady income for life in retirement. For the vast majority of private-sector workers, these have been replaced by defined-contribution plans, like 401(k)s, where the employee bears all the investment risk and the company’s commitment is limited.
Gen Z has entered a world where the pension is a historical artifact. They know that their retirement security is entirely their own responsibility. With the primary long-term financial incentive for staying with one company gone, the logical appeal of loyalty has been significantly diminished.
3. They understand that “at-will” employment means loyalty is a one-way street.
In the United States, the vast majority of employment is “at-will,” which means that an employer can terminate an employee at any time, for any reason (that is not illegal), without any warning. Gen Z understands this legal reality better than previous generations. They recognize the inherent imbalance in a system that demands loyalty from an employee but offers no reciprocal guarantee of security from the employer.
From their perspective, offering unwavering loyalty to an organization that can, and often does, eliminate your position with no notice is not a wise or rational strategy. They see loyalty as a two-way street, and the current legal structure of employment makes that impossible.
4. They witnessed their parents get laid off after years of dedicated service.
Many members of Gen Z grew up watching their Gen X parents, who were often dedicated and loyal employees, go through rounds of corporate downsizing and layoffs, particularly during the financial crises of the 2000s. They saw firsthand that years of hard work and loyal service were no protection against a sudden and impersonal layoff.
This formative experience created a deep and lasting skepticism about the concept of job security. It taught them a powerful lesson: a company’s primary loyalty is to its shareholders, not to its employees. This has led them to adopt a more defensive and self-reliant approach to their own careers.
5. They recognize that skills can become outdated by staying in one place.
In a rapidly changing economy, the skills that are valuable today may be obsolete in five years. Staying at one company for a long period can sometimes limit your exposure to new technologies, different ways of thinking, and emerging best practices in your field. You become an expert in “the way we do things here,” which can make you less marketable outside of that specific organization.
Gen Z understands that their long-term security comes from the portability of their skills, not the stability of their current employer. They are motivated to change jobs to ensure they are constantly learning and adding new, in-demand skills to their professional toolkit, which makes them more resilient to future market shifts.
6. They see that a new job is often the fastest path to a promotion.
In many large companies, the path to a promotion can be a slow and bureaucratic process, often dependent on a manager’s departure or a lengthy annual review cycle. Gen Z has observed that a faster and more effective way to get a better job title and more responsibility is often to apply for that higher-level role at a different company.
A new employer will hire you based on your demonstrated potential and your current market value, while your current employer may still see you as the junior employee they hired two years ago. This makes an external job search a more efficient mechanism for career advancement than waiting for an internal promotion.
7. They believe their primary loyalty is to their own career and skills.
Ultimately, Gen Z’s approach is a shift in the object of loyalty. Their loyalty is not to a specific company, manager, or corporate brand. Their primary loyalty is to themselves, their skills, and their long-term career trajectory. They see themselves as the CEO of their own career, and they are making strategic decisions to maximize the value of that enterprise.
This mindset is not about being selfish or uncommitted. It’s about being the protagonist in your own professional story. They believe that by investing in their own growth and ensuring they are fairly compensated, they are building a more sustainable and secure foundation for their future, a foundation that cannot be taken away by a single layoff or a corporate restructuring.