The current job market presents significant challenges for young professionals, particularly members of Gen Z, many of whom depend on family support to navigate employment hurdles. A 2024 study revealed that over half of Gen Z individuals sought job opportunities through parental networks, with 53% reporting that their relatives had secured leads or referrals for them. n nJulia Lamm, PwC’s workforce solutions principal, believes this trend may intensify amid economic pressures, as more parents attempt to assist their adult children in securing positions. However, she emphasizes the need for organizations to maintain fairness in hiring. “Strong companies will completely blind the referral process so decision-makers aren’t influenced by personal connections,” she explained, advocating for systems that ensure impartial evaluation. n nIn cases where transparency is unavoidable—such as when a candidate is related to a founder or executive—Lamm recommends alternative development paths. One organization she advises is exploring rotational programs for junior staff, allowing them to gain cross-functional experience. This approach helps ensure that individuals who enter through connections can build credibility and competence over time. “The ‘nepo’ part should only open the door,” she said. “What follows must be earned.” n nThe same principles apply to hires brought in through friendships with leadership. To prevent bias, Lamm suggests implementing independent review processes during performance evaluations. “Just because someone succeeded elsewhere doesn’t guarantee they’ll thrive here,” she cautioned, noting that misjudged hires can harm team dynamics. n nAdditional HR insights covered in the report include historical perspectives on remote work, current debates around DEI policies, and findings on AI bias in recruitment. Leadership advice included avoiding over-analysis in decision-making and recognizing that underperforming employees—often labeled “B-players”—can hinder innovation and block top talent.
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How to handle ‘nepo babies’ in this economic climate’s tough job market
It’s no secret that the job market for Gen Z isn’t great—and many young people rely on their parents for help, ranging from financial support to health insurance to job leads. One 2024 study found that more than half of Gen Z asked their parents to find them job opportunities, with 53% of that group reporting that their parents had found them jobs to apply to through personal connections. n nJulia Lamm, PwC’s principal of workforce solutions, told me she suspects more parents will be trying to pull strings for their adult kids in this economic climate. n nBut how should workplaces deal with “nepo babies”? Lamm had a few suggestions to make sure the hiring process is still fair, and those without connections aren’t shut out. “The really good companies will completely blind [the connection] from the decision-making process so you don’t even know it’s a referral,” she said. “You try to hide that so that it’s inherently an unbiased process.” n nIf that proves impossible—as is often the case when the referred person is related to an owner, founder, or executive at a company—Lamm suggests thinking about a revamp of how entry-level employees engage with the company. One firm she works with is considering a rotational program for junior employees to get hands-on experience with different parts of the company. n n“It’s to truly support the development of the nepo babies so that if they do rise to a role in the organization that’s going to be a leadership role, they will be credible,” she said. “They will have the experience, and they will be able to properly steer the organization so that the ‘nepo’ part was just opening the door, and they do the rest.” n nNepo friends should be treated in a similar fashion. In addition to blind hiring processes, Lamm recommends making sure those employees that were hired by friends in leadership roles be subject to secondary, unbiased reviewers during performance review season. n n“Sometimes what happens is you … bring your friend on over, and because they were successful in another organization, you think they’re going to be successful here,” Lamm said. “That is not always the case. Those are the scenarios where I’ve seen it go south.” n nKristin Stoller n nEditorial Director, Fortune Live Media n nkristin.stoller@fortune.com n nAround the Table n nA round-up of the most important HR headlines. n nA NASA consultant’s experiments in the 1970s found that “telecommuting” could reduce turnover and save millions—but neither companies nor unions were ready to embrace it. Big Think n nThe HR trade group SHRM is facing controversy over attendance policies, DEI stances, and dress codes, among other complaints. Business Insider n nHuman oversight is not enough to prevent hiring bias in AI, a new academic study found. Washington Post n nWatercooler n nEverything you need to know from Fortune. n nSnap decisions. A Land O’Lakes executive’s rule of thumb for avoiding “analysis paralysis”: If more information won’t alter the outcome, stop digging and make the call. —Ruth Umoh n nA recruiter’s revelation. Most problems at an organization can be attributed to “B-players,” who seek credit, block talent, and slow innovation. —Dave Smith