The Impact of Gen Z Expectations on Pay Strategy

July 21, 2026

Stephanie Gilman

As one of the fastest-growing segments of the workforce, Gen Z is projected to make up 30 per cent of all workers by 2030. And while every generation has reshaped work norms in its own way, Gen Z compensation expectations around pay transparency, career growth and financial wellness are pushing organisations to rethink not just what they offer, but how they talk about it. For HR and payroll professionals, keeping up with workforce generational trends is essential to attracting and retaining Gen Z talent.

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Transparency expectations among Gen Z employees

More than any previous generation, Gen Z’s compensation expectations include knowing where they stand on pay, before they even apply for a role. According to a 2023 Handshake survey, 80 per cent of Gen Z jobseekers ranked a high starting salary as a top factor when choosing a job, and a previous trends report reported respondents saying including the salary range in a job description was the greatest motivator to apply for a job.

And they’re not shy once they’re inside an organisation either. Nearly 40 per cent of Gen Z employees openly discuss salary at work, almost double the rate of Gen X. For employers still clinging to a culture where it’s taboo to talk about pay, that dynamic is shifting whether they welcome it or not.

This makes compensation communication strategies for Gen Z a real priority. It’s not enough to pay fairly—you have to be able to explain the rationale around how and why salaries are decided.

Designing compensation models for Gen Z employees

Gen Z’s salary preferences are about more than a starting number. This is a generation that also weighs career growth, learning opportunities and whether an employer’s values align with their own. The dollar amount might get them in the door, but it’s rarely the only thing that keeps them from leaving.

What this points to is a real shift in employee value proposition trends. Gen Z wants flexible pay structures, faster feedback and career development incentives that feel concrete—not a vague promise of a promotion somewhere down the road. The traditional annual review and incremental raise cycle simply doesn’t match how this generation thinks about growth.

Adapting total rewards to the needs of Gen Z means rethinking several things at once. Some of the adjustments employers are making include:

Offering more frequent performance check-ins tied to compensation conversations, rather than waiting for the annual cycle;
Building transparent promotion criteria and salary progression paths that employees can actually track;
Considering financial wellness preferences of Gen Z workers and adding benefits like student loan assistance and emergency savings programs to total rewards packages; and
Using digital compensation tools preferred by Gen Z to communicate pay decisions clearly and accessibly.

” Gen Z expects pay transparency, frequent performance feedback, financial wellness support and clear pathways for career growth, not just a competitive salary ”

Retention strategies for Gen Z talent

Retention is where these adjustments carry the highest stakes, since Gen Z has a reputation for moving around. Research shows 83 per cent of Gen Z workers consider themselves job hoppers, and 62 per cent are actively or passively looking for new roles at any given time, versus 49 per cent of other generations. And with the average salary increase by 14.8 per cent when switching jobs compared to 5.8 per cent for those who stay with their current company, there needs to be more incentive for building tenure.

A strong generational retention strategy treats compensation as one part of a broader employee experience. According to a 2025 Deloitte survey, 48 per cent of Gen Zers don’t feel financially secure, up from 30 per cent in 2024. Employers who respond with holistic financial wellness support, not just competitive base pay, build a different kind of loyalty. How organisations structure performance-based incentives matters too. Gen Z tends to respond better to frequent, transparent recognition tied to clear goals than to a once-a-year bonus that feels disconnected from their day-to-day contributions.

Aligning rewards with Gen Z career values

The broader lesson for generational workforce planning (and generational pay strategy overall) is that Gen Z isn’t asking for more, they’re asking for something different. They want compensation that reflects their growth, rewards their contributions and signals that their employer is invested in where their career is going.

As Ronald Seifert, North America total rewards leader at Korn Ferry has noted: “Companies that are concerned about Gen Z would be well-served to address the issues that matter to this generation in their value proposition to employees and ensure that the company demonstrates a commitment to employee physical, mental and financial well-being.”

Adapting your modern compensation strategy to meet these expectations doesn’t mean starting from scratch. But it does require listening more closely, communicating more clearly and building future-focused pay models for emerging talent with this generation’s reality, not a playbook from a previous generation, in mind.

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