Gen Z’s Implications for the U.S. Military
- Military Brand Advisor
- Oct 30, 2024
- 11 min read
Not Millennials 2.0
If you think Gen Z is just a continuation of Millennials, think again. This new generation thinks, acts, works, and communicates very differently – and there are major implications for how the US military attracts, trains, motivates, leads, and retains talent going forward. The differences are profound, with the first generation of true digital natives who find their way into the military, among them: greater life expectancy than any previous generation, better health than the general population, a much higher level of military compensation, and a diverse and inclusive life outlook shaped during formative years post 9/11, embroiled in COVID, and in the wake of withdrawal from Afghanistan. To successfully adapt to the ever-changing geopolitical landscape and competition between nations, national security policy shapers must incorporate Gen Z’s orientation into force design and modernization and break from doctrinaire rationalizations. Generation Z will likely challenge the defense establishment to change in more ways than any previous peer group.
Members of Gen Z continue to reach enlistment age and are filling the ranks with a world view shaped by the “always on” economy and digital banking, electronic payments, and online trading. This cohort exists in a more socially conscious, diverse military composed of over 17% female and 31% ethnic minorities, (DoD, DASD MC&FP; 27) where spouses are most often the primary financial decision maker, and family separations are longer and harder due to a slowly shrinking force and higher operations tempo. Adapting to both the opportunities and the challenges presented by Gen Z’s world view, financial perspectives, and the unique ways in which they think, act, and communicate is essential.
A Distinctive World View
The Generation Z Timeline
While it has become easy to simply label a generation within a linear timespan, much more contributes to generational zeitgeist that defines the character of a cohort. If we are to take a fixed point in time, the first of Gen Z started to populate Earth during 1995 (Gartner). With a starting age of 18 years old for
entry into military service, which means the high school graduating classes of 2013 produced the first of Gen Z eligible to serve. Most current generational research sets within a 2-to-3-year time span that the newest members of Gen Z continued to be born until the year 2010. As a result, we should expect this generation’s size, buying power, and influence in the U.S. military to increase until 2028. The impact in the military and society however will endure much longer (see the Gen Z timeline chart above), with some members of Gen Z making martial careers lasting longer than 30 years and enduring in the service well past the year 2058.
The Gen Z Military Will be Healthier than the General Population
Healthier than the general population – By sheer virtue of military entrance qualifications, service members enter the military in good health and are the beneficiaries of the military healthcare system throughout their service. As economists like to say, “as long as people are healthy, society becomes wealthier.” With that comes different attitudes about life and work.
Gen Z is seeing role modeling by members of the Boomer generation publicly maintaining active careers well into their 80s and 90s. With a distinct perspective on what careers mean, work-life balance, and employment compacts, traditional retirement planning perspectives are shifting toward life-long income generation strategies rather than asset depletion. This has implications as Gen Z will be the first entire generation to be the beneficiary of the Blended Retirement System, the latest version of a military retirement plan implemented in 2018.
A declining number of young Americans eligible for military service – The number of new high school graduates, the principal cohort comprising entrants into the U.S. military, is steadily decreasing. In 2020, a record low of only 23% of Americans ages 17-to-24 either medically or physically qualified for service (Garamone). Members of the U.S. military will continue to be significantly healthier than the average American and will have better access to health care long term, increasing the leading factors contributing to longer life expectancy. Insurability and the income streams surrounding lifetime customer value expands with this group.
2135 is a lot of more ground to cover than previously experienced –
Life Expectancy Increasing – The first person to live to 125 is alive today – Beginning life around 1995 and continuing to be born until 2010, we should expect the longest living members of Gen Z to be with us until the year 2135. In general, average life expectancy in the United States continues to increase, up from 69.77 years in 1960 to 78.79 years in 2019. Concurrently, the forecast number of American centenarians projects an 8X increase between 2020 and 2050 (Stepler). Interestingly, 85% of current centenarians are female. With a 14% increase (DoD, DASD MC&FP) in women in the military between 2000 and 2020, there are potential long-term implications for Gen Z. Not only does this mean people are living longer, and life expectancy is significantly increasing, it means members of Gen Z will spend more time on the planet than previous generations. In fact, with Gen Z, life expectancy for some will approach 125 years. Those who make the military a career will be the first generation that will still have more than half their lives ahead of them once they reach military retirement and leave the service. Those contemplating the opportunities the demand for new products and services (and where Servicemembers Group Life Insurance, Tricare, and the Veterans Administration cannot quickly adapt) that do not exist today will create competitive advantage with viable solutions to meet emergent needs and by filling lifestyle gaps that heretofore did not exist.
Generation Z Will be the Best Compensated Military Force in History
Military compensation has steadily risen for over a decade. Military Millennials have benefited from this increase and early-stage members are now eligible for full military retirement. Further, the remaining active-duty Gen Xers represent the services’ most senior leaders, as Gen Z continues to reach enlistment age and fill the ranks. With a world view shaped by the “always on” economy and digital banking, electronic payments, and online trading, two distinct sectors of consumers—Delegators and Validators—are becoming even more prevalent. This cohort exists in a more socially conscious, diverse military composed of over 17% female and 31% ethnic minorities, where spouses are most often the primary financial decision maker, and family separations are longer and harder due to a slowly shrinking force and higher operations tempo. Gen Z is also entering service during a time of significant compensation adjustments. The largest pay raises in decades are financially enabling the youngest troops in ways previously unimagined. Competition for dollars and attention from the first true digital natives will be stronger than ever. Organizations that prepare for both the opportunities and the challenges presented by Gen Z’s world view, financial perspectives, and the unique ways in which they think, act, and communicate will achieve competitive advantage in the military space.
The biggest pay raises in decades – In January 2023, the highest pay raise in two decades went into effect, raising base pay an additional 4.6 percent. The portions of military compensation
designed to offset inflation also increased. Originally forecast for 3.4%, meal allowances (BAS – Basic Allowance for Subsistence) increased 11%. On average, housing allowances increased 4.3% in 2023. Generation Z will be the best compensated military force in history, with personal income, managed correctly, enabling a much fuller range of short-term and long-term lifestyle options. Managed incorrectly, the Gen Z military will continue to face family economic hardships, personal financial emergencies, food insecurity, and the challenges of single-income life that will continue to adversely impact unit financial readiness and retention.
Personal income rising – Service member income has steadily increased over the last decade. There has been a 30% increase in base pay over the last ten years. At the same time financial readiness remains a concern. The average E-4, someone who is around twenty-one years old, and has been in the military around four years, will have personal annual income of over fifty thousand dollars a year in 2024. At the same time, despite higher individual compensation, personal and unit financial readiness remains a concern for both unit commanders and those who serve. The leaders of the defense department and the individual services must contemplate why, despite higher level of base pay and inflationary offsets for housing and meals, are today’s warriors beset by the same financial pitfalls experienced by servicemembers for two-and-a-half-centuries.
The creation of the Year One Six Figure E1 (Y16E1) – Bigger-than-ever enlistment, reenlistment, and special pay bonuses – In 2022, maximum allowable enlistment bonuses increased to $50K (in lump sum). In 2023 enlistment bonuses maximums increased to $75K. Wonder why financial readiness is a concern? In 2023 some new recruits were handed four times in annual base pay as they left recruit training. Essentially, service members who have never had a real paycheck in their lives, and at 18 years of age, alone, away from home for the first time, adapting to a new lifestyle, learning a new job, and with no real expenses were receiving a comparatively enormous amount of cash. Suddenly E-1s will find themselves with a 6-figure income in their first year of service (the second year, not so much, but still substantially different than we think). In 2024, average E-1 annual income is over $39K per year. An E-1 is no longer, and has not been for quite some time, the $18K/year wage earner we think of them as.
Little-to-no college debt countertrend – Most new officers (second lieutenants and ensigns), new college graduates commissioned through service academies and Reserve Officer Training Program (ROTC) scholarships, unlike their peers in general society, will not typically carry five-figure student debt (Wood). Lack of appreciable student burden, coupled with immediate employment, accompanied with competitive income, will not escape consumer product and financial industry notice much longer.
Gen Z will judge us harshly, albeit silently, perhaps
If we are thinking Gen Z is just a continuation of Millennials, think again. This new generation thinks, acts, works, and communicates very differently. How Gen Z is enabled, empowered, and considered, while at work, socially, as consumers and how organizations and brands they choose to affiliate with embrace environmental, social, and governance (ESG) issues makes a substantial difference. Strong opinions may emerge, but more frequently, Gen Z will vote with their feet and wallets and softly message their values by shifting time and energy elsewhere.
True digital natives – Gen Z has grown up with cryptocurrency, non-fungible tokens (NFTs) e-trading, e-commerce, e-gaming, the always on economy, mobile banking (mobile everything), subscriptions services like Netflix and Hulu, and software as a service (SaaS), as the norm.
Personal relationships with their devices – Gen Zers operate multiple devices and are constantly online, even while they are at work. The relationship is much deeper than the way Millennials typically rely on having access to a smart phone for use as a coordination, social, and shopping tool. Often apps and sites outside corporate-furnished networks are in use while Gen Z works.
We should not assume unfettered digital access military market counter trend – War in Ukraine does have an impact on business access to servicemembers. We were already seeing deployments and training exercises without cell phones prior to Russian leadership losses on the battlefield. In 2020 elements of the 82nd Airborne were among the first units to leave their cell phones at home during deployment (Rempfer). In 2018 the defense department banned the use of fitness app Strava due to GPS tracking capability (Browne). Russian losses due to digital signatures (Schogol) has highlighted the importance of restricting servicemember access to devices while deployed, in combat and during field training.
Less Social – Members of Gen Z may appear outwardly to prefer working individualistically. Appearances notwithstanding, in actuality, members of Gen Z naturally immerse themselves in networking and social interaction online. COVID and resulting remote work has heightened Gen Z’s digital relationships, networking, and collaboration.
Responsive to mentoring – Military Millennials may have tolerated traditional norms, but Gen Z will challenge the status quo, requiring original approaches to sales, recruiting, coaching and leadership.
Entrepreneurial orientation – With an outlook toward carving out their own place in the world, Gen Z manifests entrepreneurial tendencies in collaborative ways as well as a business sense. We can see two major subdivisions of Gen Z forming, though there may be significant overlap between delegators and validators.
Delegators – Gen Z is inclined to farm out their own personal work to those who are best at it. This may be a significant advantage for some sectors while creating challenges for how members of Gen Z are led in a work setting.
Validators – To some degree Gen Z expects near instantaneous affirmation. This manifests most directly in online posting activities and response to social media post likes and follows. We also see peer-to-peer confirmation of purchase decisions through known, trusted sources, such as on-line reviews, friends, and influencers.
Want to make a difference right away – How organizations respond to societal change and environmental, social, and governance (ESG) concerns, or not, will make a difference to Gen Z. The Gen Z military will find itself playing a role front-and-center is some of the most pressing environmental issues important to this generation.
Climate change – How institutions respond to hurricanes, wildfires, floods, warmer than normal temperature patterns, and natural disasters associated with climate change will come under increasing scrutiny. This requires a mind shift in orientation from viewing cataclysmic climate-related events as the worst-ever, to the best it will ever be. Gen Z will look to see how organizations treat stakeholders and how their needs are either considered or marginalized in preparing and responding to climate events.
Opening of the Artic – Competition for the global commons as polar ice caps recede will increase artic operations for all branches of the military. More service members will be stationed at installations in Alaska and the Seattle area, and specific military pays will incent moves and permanent change of station orders.
Pacific pivot – Chinese military technological advances, aircraft and ship production surges, and artificial reef building will dictate more US military presence in Hawaii, Guam, Japan, and Korea, which already are home to some of our largest overseas military population centers. We should not be surprised by more military assets and personnel in places like Diego Garcia, Guam, Yokota, Australia, and remote island chains.
Russian invasion of Ukraine countertrend – Russia’s 2022 move into Ukraine reverses two decades of troop reduction in Germany and Europe. For the first time in recent memory, we are seeing new unit creation in Germany accompanied by family moves, new installations in Poland, and increases in deployments and rotational strength in Romania, Estonia, and amongst the 42 European nations with some level of US troop presence.
Takeaways
The generation coming of age presents significant opportunities for entities willing to begin addressing Gen Z’s demographic impacts sooner rather than later.
Rising military income and life expectancy are more than statistics. Organizations will have to adapt the way they think about their business currently and contemplate new ways to offer value to service members and their families. Long-ignored gaps in military lifestyles will surface more frequently, and Gen Z will not be less tolerant of a bureaucratic defense department than previous generations.
As lifestyle brands, the individual military branches must move faster to orient and adapt thinking to meet Gen Z as they come of age and seek their place in the world. Gen Z servicemembers will find themselves living in geographies of great interest to them and working in situations that often clash with their world view.
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References
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Browne, Ryan. “Pentagon Bans Use of Geolocators on Fitness Trackers, Smartphones.” CNN.Com, Cable News Network, 6 Aug.
Garamone, Jim. “After Tough Year, Military Recruiting Is Looking Up.” U.S. Department of Defense, 22 Dec. 2023,
“Gartner Finds ‘Gen Zers’ Behave Differently to Millennials and CIOs Must Adapt Their Leadership Approach.” Gartner.Com, 5 Nov.
Rempfer, Kyle. “No Cellphones, Laptops Were Allowed to Go with Army 82nd Paratroopers Deploying to Middle East.” Army
Times.com, 6 Jan. 2020, www.armytimes.com/news/your-army/2020/01/06/no-cell-phones-laptops-were-allowed-to-go-with-82nd-paratroopers-deploying-to-middle-east/.
Schogol, Jeff. “Russian Soldier Gave Away His Position with Geotagged Social Media Posts.” Task & Purpose.Com, 3 Jan. 2023,
Stepler, Renee. “World’s Centenarian Population Projected to Grow Eightfold by 2050.” Pew Research.Org, Pew Research Center,
21 Apr. 2016, www.pewresearch.org/short-reads/2016/04/21/worlds-centenarian-population-projected-to-grow-eightfold-by-2050/.
Wood, Sarah. “How Much Student Loan Debt Does the Average College Graduate Have?” U.S. News.Com, U.S. News and World
Report, 21 Oct. 2024, www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-changed.
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