Generation Z entered the workforce last year. This means some of its oldest members—those born as early as 1997—are already embedded as our colleagues.
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But as more companies prepare to accommodate the next generation, it is worth asking, “Did we really ‘get’ the Millennials who came before?” Sure, remote work options and relaxed dress codes are more ubiquitous than ever, but in terms of actually retaining Millennial talent, the answer is much less clear.
For one, Deloitte says that 43% of Millennials plan to quit their job within 2 years, and only 28% plan to stay with their current company for more than 5. In other words, Millennials not seeing a future with their employers is widespread—despite the normalization of (and investment in) “Millennial-friendly” workplaces. So, when it comes to attracting and retaining Gen Z, what can companies do differently this time around?
Start with a Shift in Perspective
It will come as no surprise that the benefits and perks you offer matter when it comes to attracting and retaining talent. But employers often overlook how they deliver them. Shifting your perspective accordingly is a great opportunity to stand out.
People in every generation—shaped by the period in which they grew up—harbor a different attitude toward the employer-employee relationship. Roughly 40% of those in the Baby Boomer workforce, for example, stayed with their employer for over 20 years.
This sort of rigid segmentation—the notion that “Baby Boomers did this; Millennials wanted that; so Gen Z will demand those”—won’t do you any favors. Ultimately, when it comes to employee benefits and perks, people want access and flexibility.
So, to better attract (and retain) Gen Z, take steps to personalize the benefits experience. Your existing employees will thank you, too.
Millennials in the workforce today span a 15-year range in age. On one end, you have people who have just gotten acclimated to post-college life. On the other, they are married or already parents of young children—perhaps even starting a college fund. These are hugely different, often-ignored contexts.
To better serve all employees, try swapping the convention of generational “segments” for life events. Ask yourself, “What are some common scenarios my employees might be going through during their tenure?”
Examples include paying off student debt, buying a home, starting a family and college fund, saving for retirement, or caring for an aging parent.
Benefits should reflect and serve the needs of everyone. A future-proof strategy to do so will provide flexible options to support multiple life events—as these will naturally change in priority for each employee over time.
Give Gen Z a Path, Not Perks
By thinking in terms of life events, your investment in benefits becomes an investment in your employees’ being able to reach important milestones. Frame it this way.
Because of their age during the Great Recession, it’s not unreasonable to imagine Gen Zs having had financial conversations with parents or other family members sooner than their Millennial siblings.
The U.S. Federal Reserve estimates that there’s currently $1.48 trillion in outstanding student loan debt. According to some experts, 46% of Gen Z is personally worried about it.
That’s a significant amount—don’t overthink it. Consider offering student loan repayment options as an alternative to the status quo of 401(k) or 403(b) contributions, but recognize that messaging matters. Offer a path to something tangible and top of mind like getting debt-free.
Providing complementary education is a great way to take this a step further. Pair direct student loan repayment support with financial or investment literacy courses. 401(k) is still important for employees to think about, even when they might be focused on loan repayment. Similarly, purchasing life insurance can be a better investment when you’re younger.
Equip your team members with knowledge. Help them take full advantage of the benefits you are offering, as well as prepare to reach their next milestone, not just the one at hand. Retention stands to improve as a result.
Seventeen percent of employers already offer education toward preparing for life events like saving for college, getting married, purchasing a home, or having children.
Illuminating a path to reaching these sorts of life milestones—through education and more personalized benefits—is a powerful way to engage employees of all ages, including Gen Z.
Turn Insight into Action
There is an immense amount of research on Gen Z already out there, and the absolute worst thing you can do is ignore it. With that in mind, remember it’s not just about drawing conclusions around adding flashy new benefits and perks Gen Z might want.
As you learn more about a new generation of talent, look beyond the “what” of benefits and perks to include “how” they’re actually being delivered.
To summarize:
- Focus on thinking in terms of life events that employees are likely to consider important.
- In taking steps to personalize a benefits experience to match, help employees see a clearer path to reaching the life milestones that matter most to them.
- Double down and invest in education to help employees take full advantage of the benefits you end up offering, as well as recognize your commitment to their future.
Whether it is Millennials, Gen Zs, or whoever comes after, refreshing your approach to designing a benefits strategy can go a long way in terms of making your company a unique and attractive place to work for the long haul.
David Feinberg is the Vice President of Operations and Risk at Justworks, a fast-growing HR technology company that helps entrepreneurs and businesses grow with confidence. He leads a cross-functional team with broad oversight to ensure the delivery of payroll, payroll tax, workers’ compensation, and benefits in compliance with regulation across all 50 U.S. states. Feinberg began his career as equity research analyst for Goldman Sachs and later Morgan Stanley, where he first covered legacy PEOs. He first made the transition to the start-up world at WellNet, where he built national, small group health plans as the Executive Vice President of Health Plan.