If you’ve ever watched a Baby Boomer express frustration at what they see as a lack of commitment from younger colleagues – or watched a Gen Z employee disengage the moment they feel invisible in a team – you’ve witnessed something that looks like a values clash but is actually something more specific.

It’s a contract collision.

That was a central insight from O.C. Tanner‘s generational recognition research, presented by Alexander Lovell, PhD at a recent session in London that I attended. Drawing on surveys of over 5,700 employees across 17 countries, and nine qualitative focus groups, the research introduces a framework that reframes almost every generational conversation happening in organisations right now.

Regular readers know that researching and writing about intergenerational workforces is a key focus of mine so I was keen to dig into this research.

The generational contract

Building on psychological contract theory, the research argued that each generation enters the workforce with a set of unspoken expectations – shaped not by personality, but by the economic and social conditions they experienced when starting work. These expectations govern what they believe they owe their employer, and what they believe their employer owes them in return.

They are not preferences. They are rational responses to the world each generation inherited.

And crucially, they don’t disappear when the world changes. They become the lens through which each generation interprets everything that happens at work – including the behaviour of people from other generations.

Four contracts, four realities

Baby Boomers entered work during post-war prosperity and built their careers on an industrial contract: loyalty for security. Work hard, stay loyal, and the system will reward you. That deal was real for them. It delivered. And so loyalty became not just a strategy but a deeply held value – one that Boomers use in conversation constantly.

When OC Tanner ran semantic analysis across generational language, “loyalty” appeared almost exclusively in Boomer responses. Other generations barely used the word at all.

Gen X entered during institutional downsizing and learned a different lesson: security depends not on loyalty but on skill. Their performance related contract – competence for autonomy – produced a generation of pragmatic realists who are deeply distrustful of organisations, but extraordinarily committed once that trust is earned.

One of the worst things you can do with a Gen X employee is to micromanage them! They believe they have spent their careers proving they don’t need it.

The Millennial generation arrived in the workforce with high ideals and acute social awareness, forging a purpose contract – meaning for commitment.

When organisational values align with their own, they have 28% higher odds of engagement than other generations. They arrive prepackaged for dedication – but will push hard on whether the values published in the onboarding materials are the values actually lived in the organisation. Most organisations find that conversation uncomfortable. Millennials find its absence disqualifying.

Gen Z’s contract is perhaps the most misunderstood. The community contract – inclusion for engagement – reflects a generation that is digitally hyperconnected but relationally starved. They have hundreds of online connections but far fewer deep ones. And one of the places they most want to find genuine belonging is work – the place where they spend 40 hours a week with people who share a common purpose.

Contrary to almost every assumption made about them, the research indicated that Gen Z largely prefers in-person work. They are not looking to disappear into remote setups. They are looking to be known.

Why Friction is Predictable – and What To Do About it

Each generation looks at the others through the lens of their own contract and finds them lacking. Boomers see disloyalty. Gen X sees naivety. Millennials see moral compromise. Gen Z feels invisible. Everyone is applying their own deal to other people’s behaviour, and finding that it doesn’t compute.

This, the research argues, is why generational friction is not random. It is structurally predictable. And because it is predictable, it is also solvable.

Only 26% of employees currently experience what OC Tanner calls generational synergy – working across generations and leveraging differences to produce better outcomes than any generation would achieve alone. That number should be alarming. It means three quarters of organisations are sitting on an unrealised resource.

When generational synergy does exist, the returns can be significant:

8 times greater financial stability

10 times greater customer satisfaction

11 times greater adaptability

Cultural impact scores range from eleven to seventeen times. And each generation’s strengths turn out to address another generation’s struggles – Boomer dedication and stability provides the scaffolding that Gen X’s pragmatism can optimise; Millennial purpose gives Gen X something worth being competent for; Gen Z’s community orientation pulls millennial individualism back toward collective belonging.

A Different Way to Think About Burnout

One of the most useful reframes in the research is what Alex Lovell called “burning up” – a four-stage process that precedes the exhaustion we conventionally label as burnout.

Stage one is identity erosion: an employee learns the unspoken rules, notices that values are applied selectively, and begins editing themselves to fit.

Stage two is moral conflict: they know what the right thing is but feel unable to do it.

Stage three is cynical withdrawal: they create distance as a coping mechanism.

Stage four – energy depletion – is what most organisations finally notice and call burnout.

By the time exhaustion becomes visible, the process has been underway for three stages. And younger generations are significantly more vulnerable because their contracts require values alignment more acutely. Generational synergy, the research found, cuts the odds of this cycle by 53%.

Recognition as The Bridge

The practical application of all of this is recognition – and the research is precise about how recognition lands differently across contracts.

For Boomers, career anniversary recognition honours the loyalty contract directly.

For Gen X, recognition that names specific skills and expertise speaks to the competence contract – what they did and how they did it matters more than generic praise.

For Millennials, recognition that explicitly connects their work to organisational values makes visible the alignment they are constantly scanning for.

For Gen Z, frequent peer-to-peer recognition that makes belonging tangible addresses the community contract – the need to feel known, seen, and not replaceable.

None of these approaches work exclusively for one generation. Career anniversaries move everyone. Values-aligned recognition resonates with everyone. The difference is in the degree – each approach lands significantly harder for the generation whose contract it most directly honours.

The Practical Question

Alex Lovell closed his session with three challenges

First, audit your generational strategies. If you have separate initiatives for different generations, ask whether they are engineering division or building synergy. Strategies that invite cross-generational connection consistently outperform those that cater to one cohort in isolation.

Second, build cross-generational connection deliberately. Reciprocal mentoring, mixed-age teams, and communication channels accessible to all generations are not soft culture initiatives. They are the mechanism through which generational synergy actually happens.

Third, make recognition integrated, not episodic – and personalise it to the contract. The difference between a recognition programme that checks a box and one that shifts culture is whether it speaks to what each person actually signed up for when they walked through the door.

Every generation in your organisation made a deal with the world before they ever made one with your organisation. Understanding that deal is not a nice-to-have for people leaders. It is the foundation of everything that follows.

For decades, career success had a shape everyone recognised. You started at entry level, you climbed, and you measured your progress in titles, pay rises, the size of your team and the size of your office. It was linear, hierarchical, and – for the generations who grew up with it – deeply motivating. Status was the incentive, and the ladder was the route.

That model is collapsing. In a recent #FromXtoZ podcast chat myself and Danielle Farage talked about some of the findings from a Deloitte survey of nearly 23,000 young workers across 44 countries.

Gen Z and Millennials aren’t mourning the loss of the career ladder. They’re building something entirely different in its place.

From Ladder to Web

The Deloitte research is striking not just for its scale but for the clarity of its findings. When asked about their career goals, only 6% of Gen Z respondents cited reaching a leadership role. Let that sit for a moment. The entire architecture of the traditional workplace – the management tiers, the promotions, the performance reviews oriented around “progression” – has been built on the assumption that people wanted to move up. For most of Gen Z, that assumption is simply wrong.

What they want instead is harder to map on an organisational chart but no less purposeful: a web of experiences that weaves together skills development, wellbeing, financial security, and meaningful impact.

Success, for this generation, isn’t a destination at the top of a structure. It’s a living, evolving combination of things that matter – and that combination looks different for every person.

This isn’t aimlessness. It’s a rational response to the world they’ve inherited.

The Incentive Has Changed

Previous generations climbed because climbing worked. A promotion meant more money, more status, a bigger car, a better postcode. The rewards were tangible and socially legible. You knew you’d arrived because other people could see it.

For Gen Z, many of those rewards have either diminished or disappeared entirely. Housing markets have made the traditional milestones of adulthood feel remote for many young workers. Corporate loyalty has eroded in both directions – companies have spent decades demonstrating that employees are expendable, and Gen Z has noticed.

Why sacrifice your wellbeing climbing up a ladder when there’s no guarantee the rungs won’t be pulled out from under you?

Into that vacuum has come a different kind of motivation. This is a generation that grew up knowing that careers in purpose-driven organisations, with values-led work, are not just idealistic fantasies – they are real, viable options. The awareness of what’s possible has fundamentally reshaped what people are willing to work towards.

Learning as a Lifestyle, Not an Event

One of the most revealing findings from the Deloitte research concerns how Gen Z approaches learning. 70% say they develop skills on a weekly basis, and 67% invest time outside of work to keep pace with their field. This is not a generation waiting to be trained. It’s a generation that has internalised the reality of working in a world where the skills required today may be obsolete in eighteen months.

Context matters here. Gen Z is entering the workforce knowing they are likely to have around thirteen different careers across their lifetime. They are also the first generation to build their careers during a genuine AI revolution, with two thirds worried that automation will eliminate jobs and 61% concerned it will close off traditional entry-level pathways. The anxiety is real. But so is the response: learn constantly, broaden relentlessly, and never assume that what you know today is enough for tomorrow.

Alongside technical and digital skills, the research is clear that soft skills are considered essential by this generation. 85% identify communication, empathy, leadership and networking as must-haves – a recognition that in a world where AI handles more and more of the tactical work, distinctly human capabilities become more – not less – valuable.

The Management Gap Nobody Is Talking About

While most of the discussion around Gen Z at work focuses on what young people want, the Deloitte research also finds something equally important on the other side of the relationship: managers are failing the people who report to them – not out of indifference, but because the system won’t let them do otherwise.

The data shows that managers currently spend around 40% of their time firefighting and only 13% on developing their people. This is a structural failure with generational consequences. Gen Z is the cohort most openly hungry for mentorship, guidance, and the kind of hands-on development that comes from working alongside someone who will bring you into the room, explain the dynamics, and help you navigate the complexity. That “second row” learning – sitting in on a client meeting, being invited into a senior conversation not because you’re needed but because you’ll grow from it – is increasingly rare, and its absence is felt.

What This Means for Organisations

The companies that will thrive with Gen Z talent are those willing to retire the ladder as their primary organisational metaphor. That means rethinking how progression is defined and communicated, building genuine flexibility into career pathways, and investing in managers who have the time and skills to actually develop people rather than simply manage output.

It also means taking seriously the values that young workers are looking for. Purpose is not a soft extra that Gen Z want alongside their salary – for many, it is the primary reason they choose one employer over another, and the first thing that erodes when the day-to-day reality of a job fails to live up to its promise.

The Career Ladder had a good run. But the Career Web is already being built, whether organisations choose to support it or not.

You can check my full podcast chat with Danielle here – https://open.spotify.com/episode/26Bau1QR1cnMQIBUfQNWS8?si=cbce79a111e345f9 or through the image below: