Salary and the Multigenerational Workforce
This three-part series explores topics and ideas presented in Robert Half’s Examining the Multigenerational Workforce report and is based on insights from Robert Half’s internal experts and thought leaders of different generations. Part Three takes a look at workers’ priorities regarding salary through a generational lens. If you haven’t already, check out Part One and Part Two.
Multigenerational teams benefit companies by bringing professionals with diverse perspectives and experiences together. Advantages include a broader range of insights and viewpoints for better, more nuanced decision making and the ability to identify potential problems from multiple angles. Generational diversity can prompt solutions—and even help pre-emptively avoid difficulties—that might otherwise stump a team or result in activities that would use up more resources than they need to.
But assembling and overseeing such a team presents a challenge—partly due to those varied perspectives that end up being so valuable. After all, what attracts someone from Gen Z to work for your company might be vastly different from what prompts a Gen Xer to join your team and gets them engaged with their work. Trying to manage workers from different generations the same way when their professional needs and motivations are different can lead to complications.
One example: Research for Robert Half’s Examining the Multigenerational Workforce report revealed that one of those varying perspectives can be the importance of salary. And it’s a preference that touches multiple aspects of today’s workplace.
Salary isn’t always the top priority
It’s a given that every professional’s primary goal is to maximize the size of their paycheck, right? Wrong.
For Baby Boomers, Gen Xers and Millennials in our survey, a competitive salary with regular increases firmly ranked as their top professional concern. But Gen Z respondents parted from that conventional wisdom, placing both flexibility in where and when they work and a positive company culture ahead of salary. This suggests that work-life balance and well-being can be at least somewhat more important to them than how much money they earn.
And in further research for the Salary Guide From Robert Half, wellness and work-life balance continue to register as top priorities for the youngest generations in the workforce. Gen Zers and Millennials showed a higher preference for hybrid work options than Gen Xers and Baby Boomers, saying that they feel more engaged when they have flexibility in where and when they work.
“Many professionals' priorities are shifting, highlighting the need for a more tailored approach," said Leigh Chaban, Senior Managing Director of Executive Search at Robert Half. "The traditional one-size-fits-all model is no longer as effective as it once was."
Generational shifts in workplace dynamics
With four generations working side by side today, each group brings its own set of values, expectations and work styles, contributing to the changes we’re seeing in the workplace.
“We all have different circumstances, perspectives and ways of thinking,” said Kate Smucker, Robert Half’s Program Manager, Enterprise ESG and Inclusion. “Gen Z’s prioritization of flexibility and positive workplace culture reflects a generational shift toward valuing holistic well-being over traditional compensation metrics. For organizations, this signals a need to evolve beyond pay-focused retention strategies to foster environments where employees feel empowered to contribute, supported through connection and aligned with the company’s values.”
“Mental health and wellness used to be things that were rarely, if ever, mentioned in the workplace,” said Ryan Chan, Senior Manager, ATI, at Robert Half. “But Gen Z professionals are showing that they prefer things like a healthy office culture over making a little more money. It might sound like a strange tradeoff to some, but why not? We spend a lot of our time working, and what happens at work often affects our personal lives. So it can make a lot of sense to choose an employer that provides a positive environment over one that might pay a little more but drags down your overall level of happiness.”
"This trend also reflects the growing preference among Gen Z and millennials to work for companies that align with their social values," Leigh added. "These professionals recognize their potential contributions and seek meaningful connections with organizations that share their ideals. For many, work is about more than just financial gain. As this mindset becomes increasingly prevalent in the workforce, employers may need to adjust their recruitment and management strategies accordingly."
The importance of salary transparency
Another pay-related trend that’s catching on, especially with younger generations, is salary transparency. For many years, salary discussions among colleagues were considered taboo, and employees often had little insight into how their pay compared to that of their peers. As younger generations enter the workforce, however, they’re challenging these norms and advocating for greater openness.
Salary transparency can take many forms, from putting good-faith pay ranges in job postings to providing detailed explanations of how salaries are determined. Companies that embrace it are likely to see a solid return on investment, including increased employee trust, reduced pay gaps and, as a result, a more engaged workforce.
"Transparency around compensation is a direct reflection of an employer's workplace culture," Leigh said. "Organizations that embrace it demonstrate a commitment to openness and honesty, which resonates strongly with Gen Z and other professionals who value a positive work environment. Even companies that may not offer the highest salaries can foster trust by being upfront about pay structures early in the hiring process, even before candidates apply."
Transparency also helps impart a better understanding of compensation expectations and can help reduce pay equity problems.
“When both parties know the salary range from the outset, it prompts a shift in dialogue from a one-sided question like ‘How much are you looking to make?’ to a more meaningful conversation about mutual value,” Kate said. “This approach fosters a collaborative tone and helps establish trust, which the research shows is important to Gen Z—valuing relationships that feel authentic and partnerships that go beyond transactional exchanges.”
“It also makes conversations about pay among colleagues easier,” Ryan added. “Those types of discussions can be difficult, but facilitating open dialogues can do a lot of good in creating a positive company culture, putting people first, and helping businesses attract and retain top performers.”
New expectations are bubbling up
As we navigate the complexities of a multigenerational workforce, it's essential to recognize and address the diverse needs and priorities of different generations. Compensation is a critical aspect of this for some, but it's not just about the numbers on a paycheck.
"While salary remains an important factor, managers must take the time to understand each employee as an individual, recognizing their unique priorities," Leigh said. "This approach not only enhances employee management but also drives benefits that extend across the entire organization."
Added Kate, “It shows that professionals today are looking for more than just a paycheck. They want to bring their full potential to the organizations they choose to work with, but they also expect those organizations to support their values and priorities. This is about a mutual exchange—contributing to meaningful work while having their own aspirations, well-being and growth respected in return.”
“And being more aware of what different people from different generations want most helps us prepare for future generations,” Ryan said. “Gen Alpha will be entering the workforce in a few years, and we’ll need to be ready for what changes they might bring.”