It’s no secret that the relationships between people and their work, and between employees and employers, have changed dramatically in recent years. The composition of the workforce is evolving, too, and quickly. As the youngest workers become an ever-larger share of the workforce—by some measures, Gen Zers could comprise more than one-quarter of the global workforce by 2025—it’s easy to turn to generational stereotypes for clues about what these employees, and their older peers, want from their work experience. Conventional wisdom supposes that different generations have different attitudes about work. But our research suggests that work preferences are more similar than different across age groups (see sidebar “About the research”).
To understand more about how employers can improve their value proposition to attract and retain workers of all ages, we looked past broad generational labels to explore the specific work preferences and drivers of employment decisions across smaller, consistently sized age groups. The data suggest that employees of all ages are looking for many of the same things at work and largely quit their jobs or start somewhere new for similar reasons. One notable difference is that once employees are in a job, the retention factors that motivate Gen Zers to stay aren’t the same as those for other age groups.
For employers, some broader lessons have also emerged: let go of generational stereotypes, focus on the employment factors that matter across all ages, and take a nuanced approach to understanding how different factors interact and affect each individual’s decisions to stay or go, rather than applying a generic range of tactics to broad demographic segments.
Across age groups, employees tend to leave—and start new jobs—for similar reasons
For all of the talk about generational differences in what workers want, our research indicates that many generation-based stereotypes—particularly those about the youngest members of the workforce—are more myth than fact (see sidebar “Debunking myths about age-based preferences”). We compared worker attitudes and behaviors across five smaller, consistently sized age groups: Gen Z (18- to 24-year-olds), younger millennials (25- to 34-year-olds), older millennials (35- to 44-year-olds), Gen X (45- to 54-year-olds), and younger baby boomers (55- to 64-year-olds). And we found that while the rates of attrition do vary by age group,1 employees’ preferences are more alike than different, especially when they’re thinking of quitting.
Among those who plan to leave their jobs, the main reasons are the same across age groups: inadequate compensation, lack of career development and advancement, and uncaring leadership. What’s more, the top reasons for leaving their previous jobs are the same for both younger and older workers (Exhibit 1), and are the same reasons different age groups gave for why they might leave their current jobs. These results suggest that many organizations still struggle to address the same issues that their employees care most about: fair and adequate compensation, career development, and caring leaders.
Similar to their reasons for quitting, the top reasons workers give for taking a new job are consistent across age groups: compensation (cited by 46 percent), career development (36 percent), and meaningful work (35 percent), followed by workplace flexibility (34 percent) (Exhibit 2).
For attracting new talent, it seems that the strongest strategies involve both “hygiene” factors, such as compensation, and “motivating” factors, such as meaningful work and career development; it’s not sufficient to provide either hygiene or motivators without the other. This is true even for Gen Zers, who rank meaningful work just as highly as workplace flexibility as a reason for taking a new job. Compared with older employees, Gen Zers also rank compensation as a slightly less important factor.
While fair, adequate compensation has always been a critical hygiene factor, employers must recognize pay as both an opportunity and a risk. Every age group prioritizes adequate compensation, or bemoans its inadequacy, as a factor in their employment decisions. And in the current environment, workers are likely to expect good pay as a basic part of the employee value proposition. We see that compensation alone won’t convince a worker to go or to stay. But the margin of error for underpaying people (or giving the perception that they are underpaid) is now much smaller—especially with a company’s best talent, who may be much more willing to seek a new job if they don’t feel they are paid fairly.
The striking similarities across segments appear to upend conventional wisdom about workforce differences by age or generation. We also see that the reasons people leave evolve over time, so employers have to keep paying attention. It’s not enough for employers to assume that the reasons why people already left are the same reasons why current employees consider leaving in the future—or why they choose to stay.
When younger workers stay, it’s not just about the money
While compensation remains a critical hygiene factor in employment decisions, overpaying doesn’t necessarily translate into greater engagement, more motivation, or more loyalty, particularly when it comes to younger workers. Despite the broad consensus on the reasons why people leave a job or take a new one, the reasons to stay vary much more by age (Exhibit 3). Gen Zers, for example, rank flexibility, career development, meaningful work, and a safe, supportive work environment as more important factors than compensation when they decide to stay with their current employers. The implications for employers are clear, especially in an uncertain economic environment. To care for and get the most out of their current employees and to keep their people aboard, organizations must tailor the employee value proposition in a more nuanced way.
When we look across age groups, employees in the two youngest groups (Gen Zers and young millennials) endorse career development and advancement potential (35 percent of both) as top reasons for staying, while employees of all other age groups do not. Contrary to generational or age-based stereotypes, Gen Zers place the least emphasis of any group on compensation as a reason to stay—a factor that only rises in importance with age—and are less likely to cite compensation than a range of other factors for staying, including reliable, supportive coworkers and a safe work environment. Meanwhile, older employees (Gen Xers and younger baby boomers) seem to value meaningful work slightly more than their younger counterparts, and younger baby boomers care about meaningful work almost as much as compensation.
Workplace flexibility is another key factor for why people choose to stay at a job, but our results suggest that employees in different age groups could value it for different reasons depending on their stage of life and related responsibilities. Gen Z employees, for instance, may want the flexibility to travel and have a more active social life, while older millennials may want flexibility to manage the demands of caretaking (for more on caregiving, see sidebar “Work–life imbalance: How life stages affect attitudes at work”).
To improve your employee value proposition, let go of generational stereotypes
Our research confirms that across ages, people’s expectations and needs at work are largely the same, and they often don’t match the generational stereotypes that seem ubiquitous. Instead of tailoring the employee value proposition and work experience by generation, it’s much more worthwhile for organizations to focus and take action on the factors that nearly all employees want—namely, compensation, career development, caring leadership, flexibility, and meaningful work—while appreciating the nuances of how they want them based on their stage in life, personal circumstances, and individual preferences.
To win the competition for scarce talent, leaders must treat their current and prospective employees as unique human beings, rather than as members of a demographic segment. The following steps can help employers better address the needs of their workers across the age spectrum.
Offer employees the full package
One of our more surprising findings is that Gen Z, the workforce’s youngest employees, is less concerned about compensation than public opinion suggests. Indeed, among Gen Zers—the age group most likely to say they’ve considered leaving a job—meaningful work matters nearly as much as compensation to those who took a new job. With even the youngest workers looking for much more than a paycheck, employers must consider all that they’re offering to current and potential employees. The results indicate that many employees are looking for much more than a transactional work experience, and that for organizations investing in each one of these factors, there are natural interdependencies with others that we tested. If people want to stay or leave because of career development, elements such as workplace flexibility and caring leaders (or the lack of them) directly affect their potential for development. If younger workers are mandated to work in the office, but senior leaders don’t take time to meet with them, or are working remotely themselves, then it seems to undermine the younger employees’ ability and interest in development. When implementing or improving these specific factors, organizations and leaders must consider how they interact and support one another, or not, in practice.
Tailor the work experience to individuals
Beyond the broad similarities in employee preferences, we see some nuances by age group and by other factors (such as caregiving), especially in the reasons people stay. These results suggest the circumstances under which this more individualized, data-based approach to the employee value proposition is the best way to address workers’ preferences. How can leaders and managers do so in a way that builds an environment of trust and respects employees’ boundaries and priorities? For one, it’s critical to create an honest, open dialogue between the individual and the organization so employees’ preferences and responsibilities are clear, and to ensure that they have a stake in their work experience. In the work context, it’s also important to focus on the constraints employees must manage rather than their feelings about those constraints. If a working parent needs certain norms (such as standard working hours or in-office mandates) relaxed so they can tend to their work and home lives, then anchor the conversation on practical adjustments and solutions rather than the employee’s feelings about the problem, which they may not be comfortable sharing.
Create ‘micro’ milestones to develop your workforce of the future
On the whole, Gen Z’s employment decisions and preferences suggest a desire for a holistic, sustainable work experience where they can start building their careers. While these workers care about a range of factors, the opportunity to develop and advance is top of mind: the lack of these opportunities is the top reason why Gen Zers plan to leave a job, and career development is their top reason for taking a new job and for staying, along with flexibility. Career development and advancement is also a top three reason why younger millennials choose to stay.
To keep younger workers for longer, it’s important to show them they have a future at the company by investing in their learning and growth—and to think outside the box when doing so. Beyond the traditional career trajectory of working hard, performing well, and moving up in an organization’s hierarchy, there are other ways to foster employees’ growth that could also bolster their longer-term economic potential. For example, opportunities to build new skills or have new experiences (working on a critical initiative or moving laterally into a new type of role) can help employees develop more quickly than a title change every few years. These types of “micro” milestones can provide all workers—but especially the younger ones who are so eager to grow—with a more dynamic career path, more actionable feedback on their progress, and a stronger feeling of being valued by their organizations.
Rethink the four ‘Ws’ (and one ‘H’) of work
If the pandemic has taught us anything, it’s that the “where” and “how” of labor can look very different than we’d ever imagined and still work for many organizations. Yet organizations could still do more to reimagine where and how work happens, as well as the “when,” “why,” and “what.” With respect to “when,” a nonlinear workday could give employees more flexibility to define their schedules beyond a standard 9-to-5 schedule (which costs organizations nothing). This would not only fulfill a highly ranked work preference but also encourage more productivity, especially for employees who might be juggling caregiving and work during certain hours of the workday. These elements, along with “why,” enable employees to be more purposeful in their presence at work. If in-person work is happening, or required, teams should coordinate their days and times so members can benefit from the group collaboration and connectivity that it confers.
There’s room, too, for flexibility about the nature of the work (the “what”) that employees perform, which can inform other “Ws.” We consider the “what” of work as combinations of activities that are either individual or collaborative, and either synchronous or asynchronous. For example, most individual-contributor work can be done alone and asynchronously, which enables workers to perform these tasks at home if they prefer. By contrast, collaborative work that requires discussion and alignment—for instance, deciding how broadly to integrate generative AI into a business function—is best done synchronously and in person (though it can be done virtually, too). Meanwhile, collaborative work that requires cocreation, especially in cross-functional teams, can be performed asynchronously and virtually.