Companies that don’t adapt to new employee expectations risk being left behind in the job market.
According to research carried out by the London School of Economics and software company Freshworks, hybrid or flexible working has overtaken salary as the number one factor when it comes to members of Gen Y and Z choosing where to work.
The longitudinal study, which began in 2010 and was completed this year, comprised 200 face-to-face interviews with people born between 1982 and 2012 across the UK, France, Germany, Sweden and Norway. Respondents were asked to order different aspects of work into their first, second and third-most important considerations, with every country’s Gen Y or Z sample indicating the same top priority.
The report found, across all countries, that a lack of employee engagement, time spent travelling, and poor career progression are the most common reasons that younger people are likely to cite for wanting to leave an organisation.
Meanwhile, a lack of autonomy, poor communication or a lack of feedback and overly strict hours were found to be the most common criticisms of management.
There is now a “greater emphasis on the self” among Gen Y and Z, says Dr Alexander Grous, the report’s lead author and an academic associate of LSE’s Department of Media and Communications. Numerous cultural factors and an increase in “social awareness”, he explains, mean that younger people are far less likely to put up with behaviour they feel is unacceptable.
But Grous rejects the idea that the report confirms an undesirable oversensitivity in the workplace, and rather welcomes a fresh impetus to treat people with respect. “[It translates to] a disdain for injustices, political activism, colour-blindness, seeing all people as equal, and a willingness to express feelings and emotions. Combined, these generations do not see an issue in acting accordingly to leave or select appropriate employers, brands and friends.”
Kate Palmer, HR advice director at The Peninsula Group, an international consultancy firm, agrees that the ‘snowflake’ tag is an unfair and unhelpful mischaracterisation of younger people. “Rather than simply dismissing their concerns as being too sensitive,” she suggests, “employers would do well to harness their passions and drives, and always look for ways to improve.”
Why salary remains crucial
Although the LSE and Freshworks study found that flexible working is the most important factor for Gen Y and Z workers, a competitive salary was still cited as the second-most among all the countries’ respondents except Sweden’s, which listed diversity, equity, inclusion and belonging instead, ahead of salary in third.
So while money isn’t everything, it remains a crucial factor. In 2022, against the backdrop of the ongoing cost-of-living crisis, many young people have raised their expectations of what they think is an acceptable starting wage.
According to Standout CV, a careers advice website, the current average starting salary for a graduate in the UK is £24,291 per annum, while for someone who has not been to university it is £17,291.
Daniel*, a third-year physics student at Lancaster University who is hoping to pursue a career in academic research, tells Raconteur he would need at least £30,000 to “live comfortably” alongside his first job. Isabel*, an A-Level student in Hastings who hopes to work in the civil service or journalism, believes that an annual wage of £40,000 would be required to “enable the lifestyle that I’d like, especially since the cost-of-living crisis is making daily life more expensive.”
Chelsea*, an A-Level student from north London who hopes to work in the psychology field, agrees. “To live comfortably, I think I would need £40,000, but by the time I graduate, I think this will increase,” she says. Martin*, a GCSE student in Aylesbury who hopes to one day work in the music industry, thinks he will need “between £25,000 and £30,000, but maybe more if I’m in London.”
But are these ambitions realistic? The Peninsula Group’s Kate Palmer is sympathetic about “living costs which continue to climb” and says that employers “should always ensure their salary offerings remain in line with competitors and market value and are sufficient for an employee to live on.”
She notes, however, that graduates and non-graduates alike should “take time to get to know their new company, colleagues and understand the challenges of the workplace before asking for a big pay rise.” Starting salaries, she points out, will depend on individual roles, as well as the necessary skills and qualifications, and where the job is based.
The benefits of work perks
Gen Y and Z also have high expectations that companies will provide more than just a salary and a paid holiday allowance in terms of benefits. “I think having a gym available to employees would be nice,” says Daniel. “Having free dental care would be something I would like,” notes Isabel.
Amelia*, a GCSE student also from Hastings and who hopes to work in medicine, suggests that “free or discounted travel, or a season ticket paid for by a company” would be an attractive perk. George*, a 14-year-old student from Durham who hopes to work in business, thinks companies could better incentivise their staff with “vouchers for shops”.
For Palmer, perks and benefits can represent “effective financial support to workers while also protecting the longer-term viability of their organisation”. Where pay rises are not possible, due to other rising costs, she says, competitive perks and benefits, and flexible working arrangements can help employees in other ways.
“The introduction of hybrid working,” she explains, “can help to reduce overall commuting expenses, as can the provision of meals and refreshments in the workplace, free parking and travel ticket loans. These can reduce [staff] outgoings. Gym memberships, private healthcare or providing financial literacy and education sessions will all help add value to your employees’ benefits packages.”
Other enhanced entitlements when it comes to sick or parental leave, on top of what is legally required, Palmer adds, “can also help employees to feel more appreciated.”
A friendly and inclusive culture
Despite the rise of hybrid working, company culture remains important – as does getting along with colleagues. “If I didn’t have friends at work, I would enjoy my job less,” muses Isabel. “Having a good social network where I could grab a drink after work with colleagues would be really important for me.”
Katy*, a final-year medical student at the University of Nottingham, adds that having colleagues who are also friends would “perhaps make work less stressful, which would be good for mental wellbeing. Building friendships with colleagues will also help you work better both as a team and individually.”
Pieter Brummer, HR director of the Lego Group, agrees that companies should strive to create a “fun and innovative culture” to help attract and retain talent. Lego, for example, has workplace social clubs at its offices, which are run by employees and help staff build relationships beyond work.
“These clubs offer a great way for colleagues to share their passions and socialise outside of work and beyond the teams they work in,” he tells Raconteur. “Whether our employees love books, have a taste for cheese, or want to start climbing or running, there is a social club for them.”
A new relationship with work
Perhaps it isn’t so much that Gen Y and Z don’t want to work, as that they want to get more out of working.
A desire to be paid fairly and in line with the cost of living, a work-life balance aided by flexible hours that allows them to be rested and to pursue their hobbies and interests, and a positive working environment where they can enjoy constructive and collaborative relationships with their fellow members of staff should not, then, be considered radical thinking.
The relationship between employee and employer has already changed and is changing further. Gen Y and Z are ultimately the workforce of their future and their expectations around hours, pay, perks and benefits and office culture, notes Kate Palmer, need to be taken seriously. “Businesses can no longer do something just because that’s the way it has always been done before.”
*Name has been changed or shortened to protect interviewee’s identity
