advertisement
advertisement

This workplace taboo is not so taboo for your Gen Z workers

Here is the difference in viewpoints between Gen Z and baby boomers in terms of this workplace measurement.

This workplace taboo is not so taboo for your Gen Z workers
[Photo: Paper Boat Creative/Getty Images]

Younger generations of workers aren’t shying away from discussing compensation anymore. And they expect their employers to welcome–or even lead–these conversations.

advertisement
advertisement

The push for greater pay transparency has gained momentum over the past few years, and it’s not just that Gen Zers are interested in having conversations their parents avoided. Numerous surveys show a stark disconnect between Gen Zers and baby boomers when it comes to comfort discussing pay, knowledge about compensation-related decision-making, and belief that greater pay transparency will have positive outcomes. Recent LinkedIn market research asked U.S. professionals if sharing their pay information leads to greater pay equality; 81% of Gen Z respondents answered affirmatively versus only 28% of baby boomers.

Organizations looking to create equitable transparency policies that satisfy all employees must address this generational divide head-on.

There’s an urgency to increase pay transparency

The movement toward greater pay transparency prompted my technology company to conduct a recent poll of 1,000 U.S.-based, full-time employees to understand the workforce’s opinions of and experiences with pay transparency. The survey revealed the importance of pay transparency for people of all backgrounds and showed how companies that fail to divulge compensation-related information face problems hiring and retaining talent.

advertisement
advertisement

However, when looking at our data across age bands, we noticed that Gen Zers were more disposed to talking about compensation than baby boomers, but less informed about factors determining compensation. So, it was no surprise to learn younger respondents aren’t as satisfied with their company’s pay transparency practices as their older colleagues.

Here’s what to know about pay transparency and potential solutions for bridging this generational gap.

Information gaps across generations widen disparities in pay transparency

Although Gen Z is having more conversations about pay than older generations, they’re not as informed about the decision-making processes behind determining compensation policies. They’re also less connected to the people making those decisions. Seventy-seven percent of baby boomers feel knowledgeable about who makes compensation decisions versus 67% of Gen Zers. And while 66% of boomers feel they understand the factors behind their compensation, only 51% of Gen Zers say the same.

advertisement

With more tenured staff often responsible for determining compensation, a discrepancy in pay transparency between generations indicates older decision-makers aren’t effectively sharing the information younger, more junior employees crave. This disconnect is further reflected in employees’ opinions of their company’s transparency policies.

Even though two-thirds of survey respondents said their company does a good job with pay transparency, lower-level employees tend to feel less satisfied than those in leadership and executive-level positions. Just 60% of associate- and analyst-level respondents approved of their company’s transparency practices versus 90% of those who are in the C-suite.

This discrepancy may not be intentional; it could simply be attributable to the generational differences in preferences for transparency. But either way, leaders need to reconsider how their policies reflect their personal views on pay transparency rather than the desires of their employees.

advertisement

Additional trends in transparency

While our survey revealed discrepancies about pay transparency according to age, that doesn’t mean providing visibility into those decisions appeals to only Gen Z employees. When we asked participants about their desired level of pay transparency, 79% said they wanted some form of transparency, with 32% asking for total transparency in the form of publicizing all employee salaries.

It’s also important to note that transparent compensation policies serve organizations well during the hiring process. When asked about the most important consideration when viewing a job posting, the estimated salary was the most commonly cited answer in our survey. Failure to disclose compensation during the hiring process could discourage the best candidates from even considering a company; 11% of respondents said they have never applied or interviewed for a role without knowing compensation beforehand.

Be prepared to adapt and open up

Nearly everyone wants at least some form of transparency about compensation practices, but younger employees are especially keen on the concept. That means an organization’s ability to recruit and retain talent hinges on becoming more transparent about pay as future generations enter the workforce.

advertisement

In the meantime, leadership teams can assess their organization’s current policies, identify opportunities to be more transparent, and consider technology that delivers the right level of transparency and satisfies employees of all ages.


Andrea Derler is a principal and researcher of customer value at Visier, a software company.

advertisement
advertisement