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Reshaping Benefits for the Gen Z Worker

Benefits are benefits, right? Everyone wants the same things. Health insurance, retirement plans, paid time off and holidays. However, which benefits are most important to an individual are influenced by a myriad of factors, for example, stage of life, age, income or family/marital status. With five generations in today’s workplace – including the Silent Generation, Baby Boomers, Gen X, Millennials and Gen Z – employers need to pay closer attention to the needs of each employee. In a tight labor market, it pays to reevaluate your benefit package. 

What Is Important to Gen Z? 

Gen Z, born from the late 90s to early 2010s, is the newest cohort of workers. While still young and entering the workplace for the first time, research is showing that this generation has particular needs that may differ from previous groups. And, according to the World Economic Forum, Gen Z will represent 27% of the workforce in OECD countries by 2025 – that’s one out of every four workers. What impact will this have on talent acquisition? How do employers need to reshape and redesign benefits for this generation? 

After salary and company culture, benefits rank next in importance to Gen Z employees. Designing the right benefit package is essential to not just attract quality talent but retain them as well.  

These benefits fall into four categories that may be familiar to you already. Dig deeper, however, to see what in particular matters to Gen Z workers. 


According to a recent study by Deloitte, Gen Z respondents reported that empathy is the second most important characteristic they want to see in their bosses. But empathy didn’t even make the top three characteristics listed by managers. This disconnect underlines a key aspect for Gen Z. Remember, this is the generation that came of age during the pandemic, studying and working remotely. Even though they are digital natives they still need in-person human interactions. But their interpersonal skills – like those needed in the workplace – still need developing. That’s one of the reasons that mental health benefits rank high for Gen Z. Health reimbursement arrangements, like HRAs, are also important because many of these workers are in low-paying or contract jobs that may not offer robust healthcare benefits.  

Financial Planning

While retirement may seem a long way off to someone in their 20’s, financial planning and financial literacy are definitely needed. Many Gen Z employees are coming out of college with heavy debt so even if an employer is offering a matching 401K, they may not be able to take advantage of it. The SECURE Act 2.0 passed by U.S. Congress in December 2022 is aimed at making it easier for Americans to save for retirement. One provision enables student loan payments to be treated as retirement contributions for the purpose of qualifying for matching contributions. This means that employees who are unable to contribute to their retirement savings due to paying off student loan debt will still reap the benefit of employer matching contributions. This new provision begins in 2024 and is optional for employers to offer.  


Gen Z are used to working wherever they can get a decent WIFI connection. While not insisting on remote working arrangements (many realize being in the office has its benefits), over half of Gen Zers surveyed said flexible working hours are more important to them than a 4-day work week (35%), according to a recent Deloitte report. Being able to balance their work and personal lives is extremely important to this generation. Offering flexible PTO, parental leave and other benefits will appeal to Gen Z. 

Education and Development

Gen Z, unlike earlier generations, is not as focused on climbing the corporate ladder. They do, however, want to continue their education and build new skills. If they feel stuck with no vision of how they can develop in their job, they’ll find another position. That’s why managers of Gen Z employees must have development discussions from day one, mapping out how the employee can grow in the job. This could include degree or certificate programs, internal training, cross-training opportunities or apprenticeships. 

To compete in this labor market requires understanding what the candidates want from an employer. This may mean taking a closer look at your benefits and making sure they meet the needs of the Gen Z employee. This will position your organization favorably as the number of Gen Z workers continue to grow in the workplace. 

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