The Costs of Attracting Generation Z

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During times of great chaos, most organizations do what they must to make it through the storm; however, once the chaos of the immediate disruption is over, organizations should not forget the value of strategy.

The role of HR in the development and implementation of an organization’s strategy is to continually assess if the HR strategy aligns with the overall business strategy. This blog post will discuss the importance of compensation strategies on the recruitment and retention of Generation Z employees.

Obviously, the COVID-19 pandemic has made all employers and employees anxious about their personal and professional lives, but even before the spread of COVID-19, Generation Z employees stated that their biggest barrier to professional achievement was anxiety!

According to research from the Workforce Institute, posted in an HRD article, 34% of the Generation Z survey participants felt anxiety was their top barrier to workplace performance, with women reporting a higher level than men—39% to 29%, respectively. When the responses were examined by country, the statistic rose to 44% in Canada—higher than the U.S., which reported 40%.

These are revealing statistics that show a significant number of Generation Z workers have anxiety, and it is holding them back in their performance in the workplace. Additionally, the article references the American Psychological Association 2018 report, titled “Stress in America: Generation Z,” which found that “77% of Gen Z adults in the U.S. were stressed about work versus 64% of adults overall.”

So, what does workplace anxiety have to do with strategic compensation? If you refresh yourself on Maslow’s hierarchy of needs pyramid, you will recall that the first and second level are physiological needs and safety needs, respectively. Organizations know that one of the best ways to reduce anxiety in the workplace is to ensure employees’ basic needs are being met.

All employees, including Generation Z employees, need the security of a full-time job and benefits to flourish in the workplace. Organizations should consider the needs of Generation Z when designing their strategic compensation programs.

Discussion Questions:

1. Click to see a research article from the Workforce Institute. Read through the article, and prepare a list of what Generation Z would like to see in the workplace from the perspective of compensation and benefits.

2. Based on the list from question 1, create a summary presentation to convince your CFO that these principles should be integrated into the organization’s strategic compensation plan. You can add supporting research to your work as well.

Wage Forecast Going UP!


All HR professionals have to strategically plan the potential and actual costs of wages every year. There are many factors that affect the business cycle of wages, such as the economy, the Consumer Price Index (CPI), and the unemployment rate:

If one considers these factors, what does the upcoming 2020 forecast look like for employee wages? Here are some perspectives based on these economic indicators.

The North American economy has been booming for over 10 years. There is always global uncertainly with circumstances that are difficult to predict, such as trade wars, changing politics, and possible pandemics, but most economists say the business fundamentals in Canada are sound. Inflation, although stable, has been trending upward in recent years, and one of the most important economic factors to consider—unemployment rate—has been down in North America. The US unemployment rate was at 3.5% in 2019, which was the lowest it had been in 50 years. In Canada, the unemployment rate was the lowest it had been in 43 years in 2019 at 5.8%.

The low unemployment numbers will be the biggest contributor to wage increases in 2020. A recent wage survey predicts the average wage increase for Canadian employees will be approximately 2.7%, which is just above the current rate of inflation, which means employees’ actual wages will also increase.

All of these factors are going to put great pressure on HR departments. As wage demands increase, it will be more difficult to recruit and retain employees as job openings will outpace the supply of employees.

2020 will be an interesting year for HR departments, which will have to be at their sharpest to maintain their compensation budgets, and still be able to hire employees without too much upward wage pressure.

Discussion Questions:

Review the interactive wage survey from Normadin-Beaudry, and find your provincial data. Identify your province’s predicted wage increase for 2020 and compare it to the average wage increase in Canada. Once you have identified the wage increase, research and identify your province’s CPI and unemployment rates. Using all the data collected, create a 5-minute presentation for your VP of HR on developing a new compensation strategy for your organization.