Most employers have workers spanning at least three generations—from Gen Z through Gen X—and even a fourth generation, if you count a small number of the youngest Baby Boomers who have yet to retire in the coming years. Creating a benefits package to meet the various needs of these very different generations can be a challenge.
In this three-part series, we’ll explore the major differences between the three largest employee demographics—Generation Z, millennials, and Generation X—and find out which benefits can best help employers attract and retain employees from each generation. We start with the youngest workers: Gen Z, defined by Pew Research Center as those born between 1997 and 2012. According to World Economic Forum, Gen Z will represent 27% of the workforce by 2025—but it’s important to know that the typical benefits package doesn’t appeal to this generation.1
Who is Gen Z?
They are digital natives. This is the most tech savvy generation yet. A study found that nearly half of them found their current jobs postings through social media. They want to apply online with a mobile-friendly application. Growing up with technology at their fingertips, they look for all the information they need to be provided online, including salary range, job requirements, benefits, opportunities for growth, and even the company’s culture.1
They care about diversity, equity, and inclusion. This is also the most diverse generation yet, with only 52% of the generation being Caucasian (compared with 61% for millennials).1 As many as 35% of Gen Z workers surveyed say they know someone who prefers using a gender-neutral pronoun,1 and a 2021 CloudBees survey said 88% of Gen Z respondents felt it was important that recruiters or potential employers asked about their preferred gender pronouns. Equality and inclusivity are paramount to creating a sense of belonging that will engage Gen Z in the workplace.
They value work-life balance. The CloudBees survey also found that Gen Z employees made it a greater priority to stick closely to reasonable work hours, being less likely to stretch the work week and sacrifice work-life balance than their older millennial peers.
They prioritize social responsibility. Members of this generation don’t care so much how a company’s mission is stated on its website as how it’s enacted in real life. They also want to feel that they’re working in a meaningful position that makes a positive impact on their community and their environment.2
Which benefits appeal most to Gen Z?
The oldest Gen Z workers remember 9/11 and the Great Recession and were just entering the workforce or completing an undergraduate degree when the pandemic hit. Younger employees had their entire college experience impacted by the pandemic. These events helped shape the way Gen Z views their future and the benefits they value most. Besides ample paid time off and competitive pay, here are the benefits most valued by Gen Z:
Flexible Work Arrangements. A Business News Daily article examined differences in Gen Z’s demonstrated employment priorities as shown in pre- and post-pandemic surveys. A key difference post-pandemic was the desire for flexibility to work remotely at least some of the time.3 Many Gen Z employees work side gigs or freelance work, and working remotely allows for greater flexibility to accommodate that—and greater work-life balance in general.1
Professional Development Opportunities. Continuous learning programs, mentorship and reverse mentorship programs, and skill-building opportunities are highly valued by Gen Z employees, who understand the need to continue to retool and evolve skillsets for a rapidly evolving workplace.1 They’re not like past generations who would choose a career and stay within that track.2 Gen Z is likely to use tuition reimbursem*nt programs extensively to further their education and open new pathways for themselves within the stability of a company they feel aligns with their values.
Health and Wellness Initiatives. Mental health support is vital to this generation, who is more likely than any previous generation to admit their mental health is poor and to seek assistance.4 Flexibility in health benefits is key, with 70% of Gen Z employees expressing that they value the option to choose their own health benefits.1 They also value wellness programs, apps, and wearable technology that helps employees integrate wellness into their lives to help them proactively manage their physical and mental health.5
Financial Well-Being. As of March 2022, the average Gen Zer had $15,000 in student loan debt.6 While this is less student loan debt than older generations carry, assistance with student loan repayment from employers is a benefit Gen Z won’t turn away. Balancing this debt with retirement savings is a concern. Many Gen Z employees have seen their parents struggle to save for retirement, so retirement savings is a priority for them. It’s interesting to note that Gen Z is saving an average of 14% of their income for retirement.7 Competitive salary is a prioritized benefit for this economically conservative generation.
Social Responsibility and Sustainability. With the premium Gen Z places on sustainability and social responsibility, these workers will be attracted to employers who have strong corporate social responsibility programs and impactful sustainability initiatives in place. Gen Z employees want to feel that they’re part of an organization that aligns with their values, and feel that they can make an impact. Having opportunities for volunteer work and community engagement is also important to Gen Z employees.5
Learn how our team can help.
If our experienced team at BenefitEd can assist in any way with setting up education benefits to help support your Gen Z employees, reach out to us today. Stay tuned for Part 2 of our series, where we’ll discover which benefits are most highly valued among millennials.
1https://www.peoplekeep.com/blog/hiring-and-retaining-gen-z
2https://www.benefitnews.com/advisers/opinion/the-employee-benefits-gen-z-wants-and-expects
3https://www.businessnewsdaily.com/11296-what-gen-z-workers-want.html
4https://www.apa.org/monitor/2019/01/gen-z
6https://www.bankrate.com/loans/student-loans/student-loan-debt-by-generation/
7https://www.blackrock.com/us/individual/insights/retirement/2023-read-on-retirement-survey
