Gen Z is asking for more from their employer: mental health days, work from home two days a week, legal insurance, pet insurance, travel perks, tuition assistance, college debt relief, access to live event tickets and even “emergency fund” access. The office gym is now the price of admission and yesterday’s news.
The inherent tension is that older employees didn’t have access to this range of benefits when they were at the same point in their career journey. Some will begrudge younger workers from access to a broader benefit suite because it doesn’t fit into their old framework. Flexible benefits is today’s new CHRO mantra.
Flexibility Matters. Ignore The Myths You Hear.
Did you realize that 27% of the workforce will be comprised of Gen Z in 2025?
A 2023 report from Workhuman iQ, found that flexibility is a key indicator for whether an employee is happy with their work arrangement. Additionally, Gallup has found that exclusively remote and hybrid employees tend to have significantly higher employee engagement than on-site workers.
We’ve heard the myths before with Millennials — this generation of young people is lazy, entitled and unrealistic. Will Gen Z be even more difficult to work with? Or is this really just new expectations fueled by a combination of new “Covid-19 rules,” technology that allows for increased collaboration from anywhere and other trends?
Daniel Pink, author of seven NY Times best-selling books commented, “I don’t buy the idea that younger employees don’t work as hard as their elders. Every incumbent generation in history has said that about the generation rising behind them. Geez, people used to say that about Gen-Xers like me — and now they’re saying we’re deranged workaholics and relentless taskmasters!
“Instead, as people live and work longer, the deeper need to to rethink the structure of career paths and the nature of jobs. For instance, with lots of people in their 60s still working, and with a small and fixed number of top executive positions, companies would do well to create new roles — like senior scientist or team coaches or master mentors. Likewise, I’m a fan of reverse mentorship programs, where these supposedly slacker young employees share their insights and guidance on technology and social trends with their older colleagues. The new normal is going to be more idiosyncratic, nonlinear career paths and job categories people never imagined.”
Let’s face it I contribute to Forbes, but I don’t live in NYC. That wouldn’t have been likely when I graduated college in the late 1980s. As a Gen Xer, I certainly got tired of hearing the term “slackers” too.
Nothing stays the same forever.
Norms evolve.
Rules change.
Human Capital Remains Scarce
The U.S. unemployment rate is hovering at 4.2% which is well below the long term average of 5.69%. Employers want to retain quality employees and the labor pool remains thin at this point. One of the old ages is people quit their boss.
However, companies have an obligation to create a strong employment brand and build emotional connections with employees. Emotional connections help tip the scales slightly to the companies’ advantage when employees get poached.
Cris Grossmann, CEO of Beekeeper. Cris added, “35-55% of front line workers changed job in the last twelve months. Employee retention becomes a big issue. Access to communications and benefits needs to be available to all employees.”
Let’s Start With Mental Health
A GWI Report highlighted that Gen Z is the most likely of any generation to say they have a mental health condition – and they are also the least comfortable talking about the condition.
Megan Gerhardt, Ph.D. and author “Gentelligence: The Revolutionary Approach To Leading An Intergenerational Workforce” confirmed there is a shift in norms with respect to expectations on both sides — employer and employee.
Gerhardt and I spoke by Zoom and she said, “Generational differences need to be embraced. Generational shaming isn’t helpful. Gen Z is coming to work with a different psychological contract. The generational norm of today is that we ask for the things we want.”
Gerhardt elaborated, “The older Gen Z’s had only been at work for a few year’s at most when the pandemic occurred and this was a formative phase in their work journey. Work and health were conflicting priorities during Covid. If you are sick don’t go into work. And for the first time many company leaders were checking in on the mental health of their employees at scale. Further, many employees were questioning is my work site safe. Gen Z had a front row seat to the issue of mental health at work.”
Now fast forward to today. Employers are expected to check on employees mental health. Gen Z does not see a stigma around mental health as a topic they discuss not only with peers but at work. It is no longer unusual to share my current state of mind.
76% Of Gen Zers Don’t Understand Their HR Benefits
Payroll Integrations 2024 State of Employee Wellness Report highlighted that only 24% of Gen Zers completely understand their company’s benefits. Given the importance Gen Z employees place on employee benefits this “lack of understanding” gap is an employer brand opportunity. You have a workforce that wants more unique benefits and a communications gap around what the company has made available and their future roadmap to flexible benefits.
Doug Sabella, CEO of Payroll Integrations remarked, “Many Gen Zers are leaving money on the table at a time that is crucial for them to start to support their financial future. Further, Gen Z turnover may be impacted by this lack of understanding around benefits because they don’t fully understand what’s offered.”
Missy Plohr-Memming, a MetLife executive focused on group benefits, noted the impacts of Covid on tribal knowledge, “Entering the workforce during and post-pandemic, many Gen Z employees have primarily experienced remote or hybrid work, limiting their opportunities for casual, ‘water-cooler’ conversations and sharing about benefits with colleagues.”
A Flexible Benefits Tsunami Is Coming In 2025
While attending the HR & Tech Conference it’s clear we’re witnessing an explosion in employee benefits. Companies are rapidly competing to offer more innovative and personalized packages. What was once a landscape dominated by basic health insurance and retirement plans has transformed into a vibrant ecosystem of offerings tailored to the diverse needs of today’s workforce. Wellness programs, mental health support, flexible work, financial planning tools, and experiences like live events are becoming essential for attracting and retaining talent. As workforce expectations shift, employees seek meaningful support that enhances their overall well-being.
Adam Rossbach, a live event expert and TFL President commented, “Companies embracing this change will stay competitive and boost employee engagement and productivity. The benefits landscape is transforming the way businesses create emotional connections with their employees who are often the first line of contact to the brand experience.”
Cristina Goldt, a GM at Workday noted the power of technology in creating flexibility, “By harnessing AI and employee sentiment data, companies can gain a real-time understanding of how their Gen Z workforce uses and feels about their benefit options. Increasing this transparency enables companies to tailor their benefits offerings – whether it’s enhancing mental health support, offering coverage for pets, or improving paid leave options – and invest in the benefits that their employees truly want.”
Organizational Purpose Matters
Gen Z wants more transparency and a sense of company values. The truth is I’d label this a Gen Z mindset as older generations appreciate the same but Gen Z started this trend.
David Klein, VP of Talent at Spirit Airlines & Recognition Professionals International board member, is currently spearheading transformational change. He added, “Gen Z is a purpose-driven generation, which emphasizes the need for HR executives to be transparent and aligned with a broader mission when leading change. It’s essential to personalize communication, focusing on the ‘why’ behind the change, allowing Gen Z team members to see their role in the organization’s purpose. This connection fosters greater commitment and motivation.”
Gen Z Isn’t The Snowflake Generation
Generational shaming is a losing strategy. Gen Z isn’t going to be more difficult to work with, but they will be different. And different means making adjustments in the employer-employee compact.
We all know how to work with Gen Xers since we’ve been doing that for decades.
Understanding both the need to adjust and the root causes will enable senior executives to build a powerful HR brand that’s both flexible and enduring.