iscover
Research suggests that, when it comes to pay, Gen Z employees aren’t waiting around for a modest pay rise from their current employers. Instead, they’re taking their skills to the market.
New research from Jabra found that nearly half of Gen Z workers (48 per cent) are looking to change jobs in the next year. And while more than half (52 per cent) report feeling stressed or burnt out, this doesn’t appear to be why they’re looking to make the switch. Instead, it’s because the vast majority (74 per cent) see job changes as a drive of career development.
In this article, we’re asking whether it’s true that job changes are better than job loyalty when it comes to career progression, but first, let’s consider what else the survey had to say about Gen Z:
- Above even salary, flexibility matters more than anything else to Gen Z employees in choosing a job, while 70 per cent are happy with their current level of flexibility.
- Seventy-nine per cent currently have total autonomy over where they work (i.e., in-office or otherwise).
- They feel more connected to their colleagues through chat messages than casual in-person catch-ups or on video chats.
- Honesty and integrity in a manager are five times as important as expertise.
And just as a refresher, according to Jabra, ages are broken down into generations in the following way:
- Gen Z (18–26)
- Millennials (27–42)
- Gen X (43–58)
- Baby Boomers (59–77)
Should I stay or should I go?
In 2014, Forbes dropped a bomb when it published an article titled: “Employees who stay in companies longer than two years get paid 50 per cent less”. The article explained that people who jump ship are rewarded for their efforts because annual pay rise averages have been decreasing over time.
“Recessions allow businesses to freeze their payroll and decrease salaries of the newly hired based on ‘market trends’. These reactions to the recession are understandable, but the problem is that these reactions were meant to be ‘temporary’,” wrote Cameron Keng. “Instead, they have become the ‘norm’ in the marketplace.”
When average pay rises lose out to inflation, employees are, in effect, suffering pay cuts even while getting a raise. In September last year, annual wage growth was at 4 per cent, which was the strongest since March 2009, inspiring something of a victory lap from Treasurer Jim Chalmers and Employment and Workplace Relations Minister Tony Burke. This is notwithstanding the fact that, over the same period, consumer prices rose by 5.4 per cent – meaning real wages (or purchasing power) had, in fact, fallen.
“Millions of workers have been crying out for meaningful wage growth since the global financial crisis,” David Taylor wrote late last year.
Though inflation is easing and interest rates are expected to decline over the coming year, it’s no wonder that many are not content to sit tight at their current place of employment. The logic is this: “why should I wait for my employer to generously dish out a 3 per cent pay rise when I can take my skills to the market and secure a rise of, say, 5 to ten per cent?”
In 2019, the Reserve Bank of Australia published research that put the average wage rise a worker gets when switching firms at 5 per cent, but these averages vary between industries. As noted by The Australian Financial Review, some data put the average rise at 8 to ten per cent.
That said, some research suggests the gap in pay rises between those who stay and those who switch employers might be shrinking. Even still, that same study found that the increase in total pay for those who went elsewhere was “generally significantly bigger”.
Having come of age since the global financial crisis and only entering the workforce amid the COVID-19 pandemic, it’s no wonder that Gen Z workers are taking matters into their own hands.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
