CURATED READS ON GEN Z IN THE WORKPLACE

Welcome to the latest edition of Mind the Gap. We hope you find our perspectives useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

first up

For US education administrators, funding is more top of mind now than it has been in a while. On September 30, pandemic-era stimulus funding allotted to the country’s K–12 schools ended. Known as the Elementary and Secondary School Emergency Relief (ESSER) fund, the nearly $190 billion—or about one-third of annual K–12 spending over a three-to-five-year period—was earmarked for schools to combat absenteeism, address students’ mental health challenges, and expand virtual and hybrid instructional models, among other aims. (As of 2022, the most recent public data for enrollment available, there were more than 20 million Gen Zers in US public elementary and secondary schools.) 

A new article from McKinsey partner Wayne Redmond and coauthors outlines just how effectively schools used their funding—and what challenges lie ahead for both school districts and the students they serve now that the grants have expired. The good news: most of the nearly 500 school district administrators surveyed by McKinsey believe their use of stimulus funds was moderately or highly effective in achieving their goals over the past three years. (Points for Gryffindor!)

Yet even the interventions that district leaders felt were effective were not necessarily in areas where they would have spent more, the survey found. That’s because those “necessary stopgaps” often addressed immediate needs related to the pandemic, such as personal devices for students or safety items. While those devices definitely helped in virtual or hybrid learning environments, there are fewer uses for them now that students have returned to in-person learning.

In hindsight, school budget allocators wished they would have spent more on interventions that prevented learning loss and alleviated mental health challenges. That comes as little surprise, given how much student achievement globally has stalled since the pandemic began—a huge problem for the youngest Gen Zers, who are just entering their teenage years. Research shows that from 2019 to 2022, the pandemic erased two decades’ worth of academic progress and widened the achievement gaps between high- and low-performing students.

Now that the ESSER funding has expired, Redmond and coauthors expect average school budgets to decline between 5 and 8 percent, leading to what some experts are calling an educational “fiscal cliff.” Since most school budgets are allocated to staff and salaries—and therefore difficult to cut—cost reductions in other categories that are not contractually or legally fixed could be even bigger. Fifty-seven percent of school district leaders worry that a potential fiscal cliff would cause declines in student learning and achievement, which could be even more dire in low-income districts.

To deal with their budgetary constraints, the authors suggest that school districts evaluate where the additional funding resulted in the biggest benefits for students rather than simply relying on budgets from previous years. Zero-based budgeting FTW.

In education, everything can seem like a high-priority challenge. But when cash is tight, school administrators have to make tough choices about what issues get addressed first. As Carey Wright, former state superintendent of education in Mississippi, told McKinsey’s Emma Dorn, “If everything is a priority, then nothing is.” 

Luckily, Gen Z students have a clear view of what engages them at school, which directly relates to their achievement and higher education ambitions. According to a 2024 Gallup survey, 46 percent of Gen Z K–12 students say opportunities to learn in a hands-on way drive their interest, while just over one-third say they enjoy learning when they can connect a subject to the real world. Administrators, take notes!   

VISUALIZE IT

Women make up 29 percent of the C-suite, up 12 percentage points from 2015. But progress in corporate representation has been notably slower at the entry and manager levels.

WAIT, DON’T SCROLL

Tapping out. Does “runner up” or “underappreciated star” describe your persona at work? If so, it may be time to quit your job, says this author (exclusive to users who download the McKinsey Insights app).

Clocking in at the ‘leadership factory.’  These are the personal attributes that distinguish a 21st-century leader from those of the past.

More love for HR. Human resources jobs have become more stressful since the COVID-19 pandemic began. 

NOT US; STILL GREAT

All by myself. Working from home isn’t the biggest indicator of whether an employee will feel lonely, according to this research. [Axios]

From fusty to fab. Do you recognize the newest Gen Z slang? [Economist]

CROSSWORD

—Edited by Alexandra Mondalek, editor, New York