- Quality of life over pay. A global Ford survey found that more than half of surveyed employees around the world — especially Gen Z and Millennial workers — would take a 20% pay cut in exchange for better quality of life.
- Modernized benefits structure. Personalized total rewards offerings that take into account the different priorities of various generations can help employers better support workers.
- Bolstered financial education. Employer-sponsored education and benefits focused on financial health are a good tool to help younger workers better understand the long-term impact of taking a pay cut.
More than half of the 16,000 respondents in a global survey said they would take a 20% pay cut in exchange for a better quality of life.
Those numbers in a Ford Motor Co. survey were higher among younger generations, with 57% of Gen Z employees and 55% of millennials globally saying they would take that cut. Similarly, in the United States, 56% of Gen Z respondents and 60% of millennials were willing to exchange pay for better quality of life.
“[The COVID pandemic] left employees wanting to reboot their lives entirely,” said Kerry Sette, vice president and head of consumer insights and research at Voya Financial. “They realized who and what mattered most to them, like spending time with family and not overextending themselves at work, which often leads to burnout.”
Younger Generations' Evolving Priorities
The Ford survey mirrors similar findings in the upcoming “Mercer Global Talent Trends 2024” study, which found that younger employees were more likely to forgo a pay raise in exchange for additional benefits or a fully flexible or compressed work schedule, said Kate Bravery, global advisory solutions and insight leader at Mercer.
“[The Mercer study] indicates that 82% of the global workforce believes they are at risk of burnout,” Bravery said. “We could be headed for trouble.”
Many Gen Z and millennial employees experienced significantly altered life events during COVID, with canceled graduation ceremonies and the initial years of their first jobs spent entirely on Zoom — prompting a greater focus on emotional and mental health, Sette said.
Recent Voya research found that younger workers are more likely than their older counterparts to prefer robust mental health benefits over a $500 bonus. More than 60% of young workers, compared to 44% of baby boomers, said they were more likely to stay with their current employers if they had remote or hybrid work options, Sette said.
Younger workers also were more likely to stay in their current positions if they were offered benefits and programs focused on physical and mental health, financial health, student debt repayment assistance and a workplace emergency savings plan.
“We see an increased focus from employees on all types of wellness — financial to emotional and physical,” Sette said. “It's clear that employees want more support.”
How Employers Can Support Quality of Life
Personalized benefits can be a key recruitment and retention tool for employers. Benefits that support quality of life include job security, good health insurance, generous PTO, mental health benefits, caregiver support services, good retirement benefits and flexible working policies, Sette said.
Artificial intelligence programs are making it easier than ever to offer personalized benefit offerings, providing ways for companies to craft and calculate a mix of benefits tailored toward each employee, Bravery said.
“We need to modernize our approach to total rewards,” she said. “There are lots of discussions around pay, but on the total rewards side, if you're looking to inspire, motivate and engage, it's these personalized benefits that wield an outsized value.”
She noted that with more older workers staying in the workplace past retirement age, and continued reports of ageism in the workplace, employers should not forget about older generations when considering benefits and employees' quality of life.
Emphasize Financial Understanding and Health
Younger employees are less concerned about career advancement and defining themselves by their job, which may contribute to their willingness to take a pay cut, Sette said.
That said, financial concerns are a major contributor to both employee burnout and many older workers deciding to continue working rather than retiring. Forgoing a pay increase in favor of other benefits early in a career could significantly affect retirement planning.
Organizations should consider offering financial education and financial wellness-focused benefits, Sette and Bravery said. Such benefits include:
- Resources on budgeting and debt management
- Benefits supporting student loan repayment
- Mapping tools and other resources on retirement contributions and growth
- Education on the workings of health insurance programs and health savings accounts (HSAs)
- Resources or benefit programs for emergency savings
- Opportunities to develop new job skills, and education on how bolstering skills can provide career advancements
“Employers that can help employees understand how to make use of their workplace benefits across health, like HSAs, and wealth, like retirement, during this uncertain economic and inflationary environment can have a competitive edge in attracting and retaining top talent,” Sette said.
Editor’s Note: Additional Content
For more information and resources related to this article see the pages below, which offer quick access to all WorldatWork content on these topics:
