Generation Z has been slowly making its way into the workforce. The oldest members are turning 25 in 2020, and many of them leave college with high expectations regarding the future earning potential.
While unemployment remains shockingly low, empowering job seekers to focus on more lucrative opportunities or to leverage shortages in the workforce for pay increases, that doesn’t mean all employee pay expectations are realistic. This is especially true for Gen Z grads.
If you want to know if your prospective employees are reasonable with their salary requests or if you need to bump up pay rates to remain competitive, here’s what you need to know.
New Grads Have Unrealistic Expectations
One survey of undergraduate students showed that many of those who are poised to join the workforce don’t have a solid grasp on their actual earning potential. On average, Gen Z students were expecting to make nearly $58,000 a year. However, for bachelor’s degree holders with less than five years of professional experience, the average annual salary was only $47,000.
That $11,000 difference highlights the substantial disconnect between employee expectations and reality. Many undergrads are overestimating their pay potential once they leave college. Additionally, the problem continues, with many wrongly assuming that they’ll be earning about $15,000 more than statistics support once they reach mid-career, too.
Typically, this creates one of two scenarios for Gen Z grads. First, they may fight for pay rates that aren’t available, keeping them out of the workforce for longer. Second, they might accept a role, but ultimately be disappointed that their expectations weren’t met.
Dealing with Unrealistic Pay Expectations
Members of Gen Z consider compensation a priority. Many of them are motivated by financially-oriented incentives, including strong salaries and benefits packages. As a result, this disconnect can be especially challenging to navigate and can lead to issues with morale and engagement.
However, that doesn’t mean it can’t be overcome. If your company’s pay rates are competitive, consider having proof available. If you can show that competitors are offering the same salaries (or slightly less) than you are willing to provide, that can help reshape a candidate’s expectations.
Additionally, give them access to perks that are meaningful but not money-related. For instance, Gen Z values mentorship opportunities and clear communication, especially when their manager is involved. They also favor employers that give back to their communities.
Gen Z also thinks privacy at work is essential. If you can give them their own space, allow them to wear headphones when engaged in heads-down work, and personalize their workstation, you can make your company more appealing.
Ultimately, Gen Z might have high salary expectations that aren’t generally realistic in today’s market, but that doesn’t mean you can’t position yourself as an employer of choice. By using the tips above, you can attract and retain new grad talent. If you’d like to learn more, the staff at The Advance Group can help. Contact us today and see how our recruitment and retention expertise can benefit you.