What younger generations are looking for in compensation

10.2.2023 | Denise Deveau

For younger workers, base salary is only one factor they consider when making a move

Female employee talking with colleague at desk For some workers, flexibility may be paramount; others may be concerned about values alignment, opportunities for growth or more (Shutterstock/ Fizkes)

When it comes to compensation, younger generation workers have a different wish list than their older counterparts. In some cases, the deciding factor may come down to flexible benefits and workplace rewards that suit their particular interests and lifestyle. For others, skills development might be a critical factor, or they could be swayed by an organization’s alignment with their values and priorities—or all of the above.

“Younger generation workers are not a monolith,” says Michael Kravshik, CPA, CEO and co-founder of LumiQ, a provider of continuing education podcasts for finance and accounting professionals. Kravshik manages a staff averaging in the mid- to late-20s range. “Some people thrive in a structured environment, others in a much more dynamic environment where they can choose their own adventure.”

What Kravshik sees with his staff is a generation who care about what they are going to learn, how they are going to progress in the company, flexibility and work-life balance. “One thing that almost never comes up in an interview is insurance and retirement accounts. One very sought-after benefit is a hybrid workplace, but a big part of their work is also the social quality and making friends at the office.”

WHAT THE RESEARCH SAYS

Deloitte recently released its annual global survey to track how millennials and Gen Z employees feel across a variety of topics that impact their career decisions.

“At the top of the list were financial concerns, work-life balance, mental health and climate,” says Carolyn Hamer, partner, national leader workforce transformation for Deloitte Canada. (Hamer is is the guest on CPA Canada’s Mastering Money podcast: S8 E03: Decoding Compensation – Beyond the Numbers.) “From a financial standpoint, one of their top priorities was the cost of living. They want something much more holistic beyond the dollars and cents, such as development opportunities, and new learning programs, family support, flexibility in where and how they want to work, and mental health support.”

A recent study by Robert Half Canada also offered similar takeaways. “Money still matters most for just about any generation, especially given these high inflationary times,” says Cal Jungwirth, director of permanent placement services for finance and accounting, Robert Half Canada. “Beyond that, Gen Z employees want the best of both worlds—that is, the flexibility to choose where and when they want to work. They also want managers who will drive their growth trajectory and tend to have higher expectations to learn and grow.”

THE IMPORTANCE OF VALUE ALIGNMENT

Beyond compensation and flexibility, Hamer says younger employees are also interested in where the organization is at its core. “They are asking really important questions about what actions companies are taking to bring their organizational purpose to life and putting more priority around alignment with the things that are important to them.”

“Gen Zs want companies that resonate with their own values,” says Jennifer Mazzarolo, president, Maverick Consulting Group. “They don’t see employment as just a job.”

Employees are specifically asking companies about their purpose and mission and considering how the company will support their own values, she says. “They want to know how much the company gets involved in the community or whether their values align with the company’s charitable pursuits. They are examining what industry a company operates in, their human rights record, and their carbon footprint much more widely than other generations.”

Emily Nesbitt, CPA, is the manager of technical education at LumiQ. She started her career at EY where she worked in their audit practice starting in 2015. She shifted gears to join LumiQ in 2021.

“I realized my long-term goal was not to be a partner in an accounting firm. I wanted to apply my professional experience with something that was fast and growing and to be part of a company that I really aligned with in terms of their goals and mission. A plus with joining LumiQ was getting to use more creativity in my work which is pretty uncommon in traditional accounting roles.”

For Nesbitt, her new role is more about bringing value to the people she works with. “I enjoy that feeling of making a positive change for stakeholders and the clients I work for.”

THE LURE OF ADVANCEMENT OPPORTUNITIES

Career development support is something that also resonates strongly with younger employees, says Mazzarolo. “Gen Z can follow more non-traditional pathways and are seeking benefits or in-house training that can help them develop their skills in areas such as presentation skills and conflict resolution, leadership, mentoring, and networking.”

Employees are interested in benefits such as tuition reimbursement, internal training programs and mentorship, she adds. “They are asking what programs does the employer have? Will you fund my MBA studies? What is your track record for supporting career development?”

When candidates are looking at startup companies, says Mazzarolo, “Sometimes they consider it’s more lucrative to have an equity component to compensation even if it means a lower base salary.”

While some prefer the rigour of a larger firm, others will often seek out smaller companies to fast-track their leadership skills, says Kravshik. “There are people who have spent three years at my company and are able to qualify for a job that would have taken 10 years in a more traditional shop. That’s the nature of a small company. You can do more, see more, pick up more skills as you go.”

Amanda Fanning, CPA, manager, assurance services for MNP, says she knew from the day she graduated that she wanted to work in a flexible environment where she could fast track her career. Since joining MNP three years ago, she has moved into a managerial role that she says would have taken more than five years in a larger environment.

“In a smaller firm I became an instrumental member of the team more quickly. Within my first year at MNP I was leading client conversations. Now I’m getting more into the innovation and technology side of the business through several projects. It’s all very new and exciting.”

START THE CONVERSATION WITH YOUR EMPLOYER

“It is important for job seekers today to have a lot of clarity in terms of what they are looking for when evaluating organizations,” says Jungwirth. “Compensation packages tend to be very individual in scope, so employees should really evaluate and prioritize what they need so they can articulate that during an interview.”

“Employees aren’t just looking at base salary as a determining factor in making a move. They are evaluating all the other components,” says Mazzarolo. “I encourage younger employees to look at the total rewards including vacation, pension plans, RSP matching, tuition reimbursement, or stock options.”

“It’s really an exciting time to be an employee looking for new opportunities and there is a chance to think about new pathways they may not have thought of in past, regardless of where are in their career,” says Hamer. “Organizations for their part are thinking more broadly and creatively in addressing what they need.”