Why Gen Z is so motivated by pay
This contribution is from the BBC portal and the author is Megan Carnegie.
Young workers want to be paid well from the start. Their quest for higher wages isn’t simply a way to make money.
Older Gen Zers have had money on their minds since they first entered the workplace, and many have been dissatisfied with their salaries.
Data shows that as Gen Zers enter and rise through the workforce, they are highly motivated by salary — and perhaps more so than any other generation right now.
The laser focus on salary isn’t entirely new — 2016 data from the employment site Monster showed that 70% of American Gen Zers named salary as their top work motivation, along with health insurance — but several years later, experts say economic restraint has made these young workers even more salary-conscious.
In the past year, surveys show their salary expectations have skyrocketed — many are aiming for six-figure salaries early in their careers.
This is largely due to the fact that Gen Z is in a unique position among generations.
They grew up watching their parents, mostly Gen Xers, struggle for money amid economic downturns; now, they have graduated into their own economic turmoil and are worried about securing their future.
As a result, they are demanding more pay from their employers than ever before — and at earlier stages in their careers — and experts say many young workers are willing to forgo higher-paying opportunities.
To some people, Gen Z may seem “obsessed” with pay. In some cases, experts say, it can be hard for older generations to understand why young workers have such an intense focus on pay.
“By the age of Gen Z, older people were working 40 hours a week and making enough money to buy a house and have barbecues on the weekends,” says Corey Seemiller, an educator, researcher, and TEDx speaker about Gen Z.
“Gen Z works 50 hours a week at their jobs and another 20 hours a week at side jobs, but still makes barely enough to pay rent.”
But there’s more to the story than just the human desire to earn as much as possible. What’s more: their quest for higher wages could benefit everyone.
Recessions and Turbulence
Most Gen Zers, generally defined as born between 1997 and 2012, grew up against a backdrop of multiple global recessions and economic crises. For some, instability is all they’ve ever known. “They grew up surrounded by their parents’ conversations about not having enough money and the bad things that happened because of it — houses being foreclosed on and savings decimated,” Seemiller says.
While economic stress may have been abstract for many of them, largely observed through their parents’ experiences, the economic instability of recent years has hit them personally — and head-on — as they’ve entered the labor market.
Many of these young workers graduated into the workforce or were in their first positions during the Covid-19 pandemic.
In addition to being stunted professionally and unable to move up the pay scale, they also became susceptible to layoffs — according to some data, more so than other generations. “Those experiences have shaped their values, and that fear of not having enough runs deep,” Seemiller says.
They also receive entry-level wages in extremely tough economic times, which has compounded their financial worries and made them a feature of daily life.
Rising inflation has raised the cost of living; And as education costs have skyrocketed, many young people also have student loans.
Bank of America data from 2022 shows that a significant portion of Gen Z has reported an inability to save and pay off debt in the current climate.
At Gen Z’s age, seniors were working 40 hours a week and making enough money to buy a house and barbecue on the weekends – Corey Seemiller
In short, they are extremely concerned about their finances – and often more so than other generations
A Cigna survey of 12,000 workers around the world showed that 39% of Gen Zers cite financial insecurity as their top stressor, compared with 34% of millennials and 29% of those aged 50 to 64. Younger workers are especially concerned about the rising cost of living and how it will affect their future.
“From both the data and anecdotes, Gen Z workers clearly want to be fairly compensated and recognised for the value they bring to the workplace, but they are also looking for stability,” says Sam Chen, founder and CEO of Gen Z at US-based job search site Fetti.
In fact, a 2022 survey from early-career jobs community Handshake shows that 74% of the 1,400 U.S. 2023 graduates surveyed said they prioritize employer stability and salary, above factors like a well-known employer brand (41%), a fast-growing field (39%) or overall benefits (66%).
Basically, Seemiller says, Gen Z seeks high salaries to ensure that security.
“They want to be able to live off their salaries and not worry about paying their bills,” she says. “My studies have shown that being happy and fulfilled, and earning enough to live comfortably, are the most important characteristics in Gen Z’s ideal careers—not being rich and traveling the world.”
So it’s not necessarily that Gen Z is greedy or miserly—most, experts say, just want to cover their costs.
Workers in places with a higher cost of living, primarily big cities, are particularly looking for a higher salary; For example, by some estimates the average starting salary for US workers at the end of 2022 was $55,260 (£44,627), but a single adult living in San Francisco would need to earn more than $74,280 (£59,978) – after tax – to cover their costs.
While of course all generations are experiencing the strains of cost of living, Gen Z is not as far ahead in life stages and is therefore less secure.
Millennials, for example, have been in the workforce longer and have earned more money in aggregate – some were able to buy homes before prices skyrocketed and Covid-19 inflation hit.
“Members of Gen Z simply won’t be able to have a comparable life, in terms of financial stability, compared to previous generations when they entered the workforce,” says Seemiller.
“Other generations, aside from perhaps millennials who entered the workforce during the recession, did not face these circumstances as young adults.”
Are the conditions right for pay rises?
So will Gen Z get the higher salary they want? In some cases, the signs are positive.
Current labor market conditions are creating a good situation for young workers. Although hiring has cooled from its pandemic peak, the market for job seekers remains “red hot” in many countries, meaning workers still have the power to make demands of potential and current employers.
Experts say this means Gen Z is more confident in demanding a higher salary; emboldened by intense competition for talent, some studies show they feel positive about having their needs met.
Handshake data shows that more than 80% of respondents believe they can find a job that pays well and fulfills them personally, too.
There is one caveat, however. Data from recruitment industry platform Sonovate, which surveyed 500 UK small and medium-sized business owners who have raised salaries to attract and retain talent, shows that 54% doubt they can maintain this pace of pay rises for long. Simply put, even the most optimistic young people may be disappointed with their employer’s offer in the future.
Gen Z workers clearly want to be compensated fairly
And recognised for the value they bring to the workplace, but they are also looking for stability – Sam Chen
Many Gen Z employees may have to change companies if they want a higher salary. And some Gen Zers are also taking the initiative to earn more money on their own, especially if they are not going to get what they need directly from their employers.
Faced with wages that aren’t keeping pace with inflation, they’re seeking new sources of income at a higher rate than previous generations, with Gen Z the most likely to take on a second role (30%) and increase their hours (32%), significantly higher than Baby Boomers at 17% and 13%, respectively, according to Randstad’s Workmonitor 2023 Report.
A Rising Tide
Seemiller says older generations can benefit from this wage motivation. Yes, Gen Z is trying to shore up their financial future, but Seemiller also believes their quest for a wage is largely tied to their finely tuned radars for fairness and equity.
“They’re a generation that speaks up, that speaks up when they feel the work they’re doing isn’t well paid,” she says. “By doing this, they’re drawing attention to issues and making other generations feel empowered to ask for a fairer share, more flexibility or more suitable hours.”
Many companies are already feeling these changes. Beamery data from April 2023 shows that 91% of the 700 UK business leaders surveyed believe the needs and expectations expressed by younger employees could have a positive impact on all generations.
Ultimately, even as some older workers complain about Gen Z’s high salary demands, salaries are becoming more important to all generations. Gallup has been tracking the priorities of American job seekers since 2015, and salary has moved from being the fourth most important priority (41% say it is very important) to the number one priority (64%).
As for whether salary will remain a priority for Gen Z, Seemiller finds it hard to imagine them reneging on their obligations or staying static once they reach a certain salary level. “Our indicators point to a generation that cares about happiness, significance and fulfilment over a high salary just for the sake of having one,” he says. “Either way, they are hyper-focused on equity and will continue to be the first to speak up if they don’t get what they think they should get.”
You’re Not Guessing It: Job Search Is Getting Worse
This contribution is from the website of the prestigious TIME magazine and its author Alana Semuels is an economic correspondent for TIME. She covers topics such as work, consumer spending, retail, gender and technology. She has been a four-time finalist for the Gerald Loeb Award for distinguished business and financial journalism and has won awards from the Society of Business Editors and Writers and the Los Angeles Press Club.
There was a time, not long ago, when employers were in such a hurry to hire workers that they went out of their way to make it easier for people to apply.
That time is long gone. Job hunting was becoming more miserable even before the pandemic, as the time it took companies to hire lengthened and they asked candidates to undergo more and more interviews.
Labor shortages during the pandemic provided a temporary reprieve, but now, as fears of a recession mount, companies are reverting to their old habits of putting candidates through a grueling process.
“It’s frustrating and exhausting — looking for a job has never been so hard,” says Michael Cook, who was laid off from a video game company in December after more than a decade on the professional job market and has applied for hundreds of jobs since.
One company put him through six rounds of interviews over several months; another asked him to create a project that they then used on their website, but they didn’t pay him for his work; Others sent him tests to take home or asked him to record videos of himself answering pre-set questions. He hasn’t received any offers.
Part of the difficulty is due to an increasingly tight job market
Especially in fields like technology, which have seen hundreds of thousands of layoffs in the past nine months. There is now, on average, one opening for every two applicants on LinkedIn — a big change from early 2022, when there was one opening per applicant on average.
But it’s not just the economy that’s causing companies to change their hiring processes in ways that make them longer, says Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania.
The pandemic increased the use of one-way video interviews — in which applicants are asked to record a video of themselves answering a list of pre-set questions — because interviews couldn’t be done in person. But the proliferation of these interviews just gives companies that much more content to sort through.
Meanwhile, as companies prioritize equity, they are involving more people in the hiring process
Inviting senior managers and a potential colleague’s peers to weigh in, which adds time. Companies that laid off HR staff are now delegating interviews and hiring to line managers who aren’t familiar with the process.
None of this, Cappelli says, means employers are getting better candidates, but it has lengthened the time it takes to hire.
According to a report released this month by the Josh Bersin Company and AMS, a workforce solutions company, the time it takes to hire a new employee hit an all-time high of 44 days in early 2023. “Make no mistake, the hiring market is not going to get easier anytime soon,” Jim Sykes, global managing director of client operations at AMS, said in a statement.
Many job seekers told me they had been victims of scams
In which purported employers offered them an attractive-sounding job and even set up Zoom calls and interviews, but turned out to be people posing as recruiters seeking candidates’ personal information and work accounts. Even legitimate companies are posting “ghost jobs” that they never actually fill, according to a survey by Clarify Capital.
Employers post ghost jobs to get a pool of candidates they can use one day, to give the impression that their company is growing and to keep current employees motivated, according to the survey of 1,045 managers involved in the hiring process.
The miserable job market appears to be worse for people with a college degree, according to a Harris Poll conducted on behalf of TIME.
It found that 51% of job seekers with bachelor’s degrees who had at least one interview completed the interview process without receiving an offer, compared with 35% with at most a high school diploma.
Those with a bachelor’s degree were also more likely than those with a high school diploma to be asked to complete a job skills assessment; to be asked to do a one-way interview in which they recorded themselves answering pre-set questions; and to report inconsistencies between the job requirements and salary range listed in the posting and what they were told later in the interview process.
Companies’ commitment to diversity, equity and inclusion also appears to have disappeared
And Black job seekers have particularly bad experiences. In a recent survey of 1,200 U.S.-based employees by recruiting software company Greenhouse, while two-thirds of respondents overall reported being ignored after a job interview, candidates from historically underrepresented groups faced a 25% higher chance of being ignored compared to white candidates.
Candidates frustrated with the mess apply for more positions, creating a vicious cycle in which the job market is even more saturated with applications and employers turn to software to sort through these applications, further lengthening the process.
According to Rand Ghayad, LinkedIn’s director of global labor markets and economics, job seekers are sending 40% more applications than they did this time last year.
“Workers are losing some of the bargaining power they had in recent years,” he says. “The balance of power is shifting back into the hands of employers.”
Part of this shift in the balance of power is related to uncertainty in the economy
Hiring managers and HR staff may think they have the budget to hire for a week and then find out, after they’ve posted the position and even conducted interviews, that the company has changed its mind.
Barriers in the interview process may explain why more job seekers are turning to freelance work and part-time jobs—perhaps they’re trying to avoid wasting time jumping through companies’ hoops when they’re unlikely to land a job.
Cierra Reid has applied for at least 10 jobs a day since she was laid off from her job as a customer success manager in November. She’s had a few interviews, but her experience has been most
