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The largest population segment in the world, “Gen Z” has started entering the workforce and will be continuing to join the labor force over the coming decade. The keys to recruit talent from this generation and to motivate and manage them to produce great results may be surprisingly different than you think—and given a twist by COVID-19.

Gen Z (those born between 1997 and 2012) numbers around 70 million in the U.S. alone and will make up about one quarter of the workforce in 2020, according to Statista. The job market and the workplace greeting Gen Zers graduating this spring are very different than those met by their peers just a year ago, thanks to the impact of the COVID-19 pandemic.

The new normal may work for Gen Z

Yet, while jobs might be fewer now, once jobs come back, the new normal may actually be a good fit for Gen Z.

For one thing, the COVID-era workplace favors remote work, and the post-COVID workplace promises to be much more amenable to remote work in industries where that is possible. That should suit Gen Z just fine. In beqom’s survey report, How The Next Generation of Workers is Changing the Culture of Total Rewards, 42% of Gen Z workers listed flexible work hours or remote work options as the most important workplace benefit - even before the pandemic. That flexibility may be even more important to women. Job search site Fairygodboss polled 400 women ages 18-22 and found that nearly three-fourths of the respondents said their most important company perk is a “flexible schedule/the ability to work remotely.”  

The proclivity of Gen Z for remote work is being amplified by the virus-driven trend in the same direction. In a recent survey by Accenture on the impact of COVID-19 on consumer behavior, 46% of people who never worked from home previously said they now plan to work from home more often in the future.

In general, the pandemic has accelerated the trend towards digital adoption, which again aligns with the proclivities of Gen Z. This generation, even more than millennials, are digital natives. From their very earliest years, digital technology was omnipresent in their lives. 97 percent use some type of video streaming platform in a typical week. 95 percent are on a social media app or website at least once a week. They are not going to be impressed with a company that is still using manual processes or legacy technologies. The best and brightest of Gen Z will likely gravitate to companies that are ahead of the curve in digital transformation.

Transparency earns trust

One common characteristic of Gen Z is that they expect transparency. Global consultancy EY recently polled more than 2000 Gen Zers in the U.S., publishing the findings in Gen Z: A generation of contradiction. According to the EY survey, 67% of Gen Z say that people cannot be trusted. “Their strong values make it hard to gain their trust,” according to the report. “Transparency is the first step toward establishing deep bonds with this generation. Companies must be forthright about motivation and purpose to gain Gen Z’s trust.”

Gen Z is not afraid of transparency in pay. A 2019 beqom survey found that Gen Z was the generation most open to sharing pay information. In the survey report, How The Next Generation of Workers is Changing the Culture of Total Rewards, 61% of Gen Z reported they would share their salary information with colleagues, compared to only 25% of baby boomers. By the same token, they expect companies to be transparent and authentic.

Diversity and an expectation of fairness

Gen Z is diverse, and to their credit, they value fairness. “Gen Z will be the most diverse generation in America and they’ve been raised with issues like social justice and sustainability top of mind,” says Katy Shields, vice president of People and Places at VSCO, in Forbes. “They care about how others are treated and diverse representation, and they expect transparency in company practices, especially those related to fairness.”

Look for gender pay equity and other forms of pay fairness to be important to this group. That seems to still hold true even during a global pandemic. In speaking with HR professionals at financial services firms about their priorities for 2020, we found that nearly 50% of them responded that, despite the new challenges of this pandemic, their immediate priority is pay equity.

Companies will need to understand their own scorecard in terms of how they stack up against external benchmarks and whether their pay distribution is equitable across variables like age, race, and gender.

Winning with Gen Z

What, then, does this mean for Human Resource departments who are tasked with recruiting, motivating, and retaining the coming workforce? They will need the energy and talent of Gen Z to keep their companies in sync with the times. So, first, they need to understand this burgeoning pool of talent: their diversity, individuality, and motivations. Then they need to design flexible working arrangements and flexible rewards structures that can be effective in attracting and motivating this emerging workforce.

Beyond designing effective total rewards programs for Gen Z, companies will need to have the infrastructure and tools to then execute that strategy. For example, they will need a compensation management system with the ability to be collaborative, fair, and transparent, with the flexibility to meet individual needs. They will need the data and reporting tools to analyze their own pay structures and benchmark against the market. And that technology must provide the mobility and user experience that these digital natives have come to expect.


Get to know Gen Z and how to design the right Total Rewards strategy to attract and retain Gen Z talent for years to come, with our free eGuide, How The Next Generation of Workers is Changing the Culture of Total Rewards.

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