An understanding of generational influences can help inform total rewards strategies
By Claudine Kapel
Generational influences can affect employee values and priorities. By understanding these nuances, organizations can create more effective total reward strategies.
Organizations will need to be mindful of such demographic differences as they begin to welcome new employees who belong to generation Z.
“Like every generation before it, gen Z has had its own events and conditions resulting in a shared experience that shapes its unique personality,” notes the Institute for Corporate Productivity (i4cp) in its report Generation Z: What Employers Need to Know.
It defines generation Z as encompassing individuals born between 1995 and 2012 — which means the oldest of this cohort are reaching early adulthood and entering the workforce.
The report suggests that while generation Z reflects a diverse population, it represents a group that has experienced “one shared reality that impacts virtually every member of gen Z: The world is a scary place.”
Notes i4cp: “Gen Z has experienced a post-9/11 childhood combined with the Great Recession, the war on terrorism, school shootings and climate change, just to name a few markers."
Other watershed experiences for gen Z included “the first black president of the United States, the invention of the iPhone and the ubiquity of continual Internet connectedness.”
Overall, i4cp concludes “there is no denying that the gen Z employee is looking through a completely new lens at a radically changed and changing world.”
It adds that while millennials “could grow up yearning to be a part of a robust and flourishing middle class,” gen Z has “witnessed it being hollowed out, creating the need to be smarter and more strategic about planning for the future and achieving any level of economic stability, let alone affluence.”
Referencing a survey conducted with Generation Z respondents, i4cp identifies some key characteristics that define this generation:
- Realistic and pragmatic: Generation Z is “acutely aware” that what was needed to truly “make it” a generation ago is table stakes now. This has created “a new mindset in terms of planning and preparing for the future,” with 60 per cent of survey respondents reporting they want a long career with one company.
- Highly competitive: Generation Z will likely be “less team oriented and reliant on those around them.” About half of the survey respondents said they consider themselves to be competitive or extremely competitive. Further, nearly half (47 per cent) indicated they wanted their own office and 21 per cent said they’d want to work from home.
- Suffers from “an intense fear of missing out”: About 44 per cent of the survey respondents reported that they check in on social media “at least hourly,” with seven per cent reporting that they check in more than every 15 minutes.
- Seeking high touch communication: For generation Z, the “real world and the virtual world naturally blur and overlap.” Yet at the same time, the more high-tech they become, “the more they will likely want high touch.” For example, when it comes to communication at work and feedback from their bosses, 78 per cent said they prefer face-to-face communication, while a little over a third said technology has a negative impact on people skills.
- Seeking customization: Generation Z has grown up in a world “where they expect others to customize their brands for them.” This demand for customization “will be a defining characteristic of gen Z.”
The i4cp report identifies some implications for employers. The importance of customization to generation Z, for example, will mean “recruiters will need to develop more highly customized messages that have laser-like focus on specific individuals.” It adds that talent segmentation and a strong talent brand will also be critical.
Further, individual development plans will be especially important to generation Z employees, notes i4cp. “Laying out a prescribed career plan with exact titles and boxes will not appeal to a workforce that wants more control, freedom, and flexibility.”
As the i4cp research suggests, the newest entrants to the workforce will come with their own unique vantage points and expectations. That’s not to say generation Z won’t also have a lot in common with the needs and priorities of other employee groups. But it is important to consider unique generational characteristics to ensure your total rewards offering can deliver against potentially unique needs.
Key themes from the i4cp research point to generation Z as having distinct needs regarding customization, flexibility, and timely, face-to-face communications. These could build internal pressures related to workplace flexibility, greater transparency, and a more diverse array of total rewards programs that can facilitate higher levels of customization on a large scale.
All of which is good food for thought as you think about how your existing total rewards offering aligns with your emerging talent needs and strategies.