Survey Shows Record-High Gen Z Employee Firings — Key Takeaways for Employers

Employers are increasingly terminating recent college graduates — often within months of hire — due to performance and professionalism concerns. This trend raises important employment law considerations for organizations managing early‑career employees.

The Data: Early Terminations Are Widespread

Intelligent.com surveyed nearly 1,000 U.S. business leaders involved in hiring decisions. Approximately six in ten employers reported terminating at least one recent college graduate they hired in the past year. Three‑quarters of employers stated that some or all of their recent graduate hires were unsatisfactory. A majority placed at least some of those employees on performance improvement plans (PIPs) prior to termination.

According to the survey, one in six hiring managers reported hesitation about hiring recent graduates again. Roughly one in seven indicated they may avoid hiring recent graduates altogether in the coming year.

Why Employers Say Terminations Are Occurring

Those who responded to the survey cited soft‑skill and workplace‑conduct issues, rather than technical incompetence, as the primary drivers behind early separation decisions. Commonly cited concerns included:

• Lack of motivation or initiative (approximately 50%)
• Lack of professionalism or failure to meet workplace norms
• Poor communication and organizational skills
• Difficulty accepting feedback
• Attendance, punctuality and dress code issues

More than half of hiring managers concluded that recent graduates are unprepared for the realities of the workplace. Approximately one‑fifth reported that new hires struggled to manage basic workloads.

Legal Considerations for Employers

Although Gen Z employees are not protected by age discrimination statutes, which protect workers over the age of 40, high termination rates among any identifiable group can create legal risk if decisions are not well documented and consistently applied.

Key considerations include:

Clear Expectations and Onboarding
Many of the reported issues relate to workplace norms rather than misconduct. Employers should ensure that expectations regarding attendance, communication, professionalism and feedback are clearly communicated during onboarding and reinforced with written policies.

Consistency in Performance Management
While most employers reported using performance improvement plans before termination, inconsistent application of PIPs can undermine an employer’s defense in litigation. Employers should confirm that similarly situated employees are afforded similar opportunities to improve. All performance issues should be consistently and objectively documented.

Avoiding Generational Stereotyping
Internal communications attributing performance issues to generational traits, rather than specific conduct, may create discoverable evidence that complicates defense strategies. Performance documentation should remain objective and behavior‑focused.

Manager Training
The survey suggests that many employers believe etiquette or professionalism training would improve outcomes. From a compliance perspective, training managers to identify performance issues early and timely communicate expectations can significantly reduce risk.

Best Practices Moving Forward

Employers experiencing high turnover among early‑career employees should consider:

• Implementing structured onboarding programs for entry‑level roles
• Formalizing performance expectations and standards of conduct
• Training supervisors to document deficiencies with specificity
• Applying corrective action processes consistently
• Focusing hiring decisions on adaptability, coachability and willingness to accept feedback

Bottom Line

While termination decisions remain lawful where performance‑based, the survey data confirms a growing disconnect between employer and early‑career employee expectations.

Clear responsibilities, consistent performance management and manager training remain the most effective tools for mitigating those risks while addressing productivity concerns.

Please contact Mark Fijman or any member of Phelps’ Labor and Employment team if you have questions.