How to Prepare for the Gen Z Leadership Shift

With retirements accelerating and workforce demographics rapidly shifting, many organizations are facing a looming leadership gap. If succession planning doesn’t evolve, companies risk falling behind. For HR leaders, that means rethinking how — and who — they develop into future-ready, high-impact leaders.

According to a report by Lightcast, a firm that collects and analyzes labor market data, 80% of the 5 million Americans who have left work since 2020 are over age 55. Baby Boomers (born 1946-1964), who made up 15% of the U.S. labor market as of 2024, will finish turning 65 in 2029, leaving a major gap in the workforce.

Today, Millennials (born 1981-1996) make up the largest share of the U.S. workforce at 36%, with Generation X (born 1965-1980) not far behind at 31%. Meanwhile, Generation Z (born 1997-2012) has leapt from 5% to 18% of the labor market since 2018.

By creating a flexible development plan that plays to the strengths of younger generations, organizations can successfully safeguard against shifting workforce conditions.

The Challenges of Traditional Leadership Planning

To Oates-Forney, the biggest issue with leadership and development planning today is a lack of clarity. “A lot of companies are not clear about what future leaders need to be,” she said. “And when you don’t know what you’re measuring your successor against, it’s hard to develop a successor.”

Other common challenges include:

• Assessment limitations: Setting success factors for future leaders is just the first step. Companies need the ability and resources to assess potential candidates effectively and identify leadership traits.
• Limited resources for solutions: With potential leaders identified, HR leaders now have the onus of creating solutions that help train future leaders and fill skills gaps, a time-consuming task.
• Company turnover: Companies may struggle to retain younger candidates long enough to identify and train them as future leaders. Once a taboo practice, job hopping has become a popular way for workers to increase their salary and benefits.
• Fewer qualified candidates: Not only is the workforce set to shrink significantly, but many younger job seekers are not looking for leadership roles. A recent survey found that 72% of Gen Zers would choose individual career advancement over managing others, a trend known as “conscious unbossing.”

These challenges highlight the need for a more flexible, data-informed, and personalized approach to succession — one that reflects both individual aspirations and broader organizational strategy.

Rethinking Leadership Potential

Identifying the next generation of leaders is about aligning emerging talent with the evolving cultural and strategic needs of the organization. And with women making up 47% of the workforce, inclusive leadership development is more essential than ever.

Oates-Forney emphasized that the core of good leadership is helping employees add value and feel valued. That’s why identifying leadership traits and success factors is crucial.

Millennial and Gen Z workers have a lot to offer the workforce. Both generations are known for being creative and comfortable with new technologies and prioritizing work/life integration and learning and development, a survey by Deloitte found. Other valuable leadership traits, especially among Gen Z, are fearlessness, curiosity, and innovation, Oates-Forney said. 

The problem is that many workplaces are not set up to take advantage of incoming leaders, especially those who are less interested in traditional career tracks. 

“You can’t have a one-dimensional approach to leadership, because you’re leading four, five, even six generations in the workforce, and what motivates them is going to be different. That’s why you’ve got to meet people at their point of need,” Oates-Forney said.

Preparing for the Next Generation of Leaders

“You need the right leaders to help you build high-performing teams and meet overall business objectives,” Oates-Forney said.

Start by providing an accurate preview of leadership roles and offering multi-generational learning environments that build both business acumen and interpersonal agility. To do this well, companies should consider partnering with organizations such as SHRM Linkage.

SHRM Linkage offers immersive, personalized leadership development solutions backed by decades of research, assessment data, and expert coaching. “It enables you to assess your leaders in an unbiased, unfiltered way and move the individual, and the company, forward,” Oates-Forney said. 

With the right approach, organizations can turn demographic shifts into a competitive advantage — ensuring their leadership pipelines are as resilient and future-ready as the workforce they aim to lead.