Is salary transparency key to a Gen Z friendly Employer Brand?

After the viral article from Business Insider on how Gen Z won’t even apply for a job if the salary isn’t listed, the internet erupted in heated debate. 

Similarly, a tweet from Kimberly Nguyen recently racked up over 12 million views, after detailing how she saw her employer had put up a job listing which paid up to $90k more than what she was earning in the same role as a contractor. 

Nguyen went on to share how she was only able to be aware of this due to a salary transparency law which went into effect less than a year ago in her place of residence, New York. In the UK, transparency measures for executive pay were enacted in 2019, and large companies had to show the gap between this and their average worker. These measures proved themselves to be effective in holding organisations accountable, as Persimmon let its Chief Executive, Jeff Fairburn, go once his £75 million bonus became news. 

Twitter and news articles aren’t the only forms of media bringing salary transparency to the forefront of everyone’s minds. Over on TikTok there a whole genre of videos with millions of total views where creators interview passersby in public about what they do for a living, what they earn, and if they feel they are compensated fairly. 

After the upheaval of the Great Resignation, and UK cost of living crisis becoming the backdrop for much of Gen Z’s entry into the workforce, many have become more aware of just how far their salary stretches. Average real terms pay in Britain fell at among the fastest rates for more than two decades in 2022. Inflation is causing concerning amounts of the workforce to effectively take pay cuts. 

Additionally, it prompted employees of all generations to rethink their perception of what it means to be happy at work, their impressions of organisations based on how they choose to compensate their workforce, and as an extension of that, how honest they are about it. Many however, still felt Gen Z were taking things too far by entirely disregarding jobs without a listed salary. 

Before delving into the question of pay transparency’s role in effectively positioning yourself as an employer to Gen Z jobseekers, let’s get three working definitions set in stone. 

Gen Z. 

Generation Z refers to those born between the years 1997 to 2012. The older half of the generation are already either in your workforce or beginning to enter it. Many of them remember how the 2008 global recession impacted their parents and the world around them. Swathes of Gen Z entered the workplace or had key educational milestones significantly impacted by the pandemic.  

The reported characteristics of Gen Z range from pragmatic to selfish, entrepreneurial to lazy, inclusive to ignorant. These labels, however, are ones which have been stuck onto every young generation throughout human history. From the Baby Boomers being dubbed the ‘Me’ Generation in the 70s for their alleged conceit, to sources from ancient Greece where Socrates bemoans how “children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants.”, it can be difficult to see any stereotypes, good or bad, as particularly new or unbiased. Even, in terms of the more positive comments, while as a member of Gen Z I would like to claim them, I would also encourage people to hold in mind that with the youngest members of Gen Z being only thirteen years old as of 2023, it may be a little hasty to cement anything down. 

It should be noted however, that despite certain sources on the internet stating otherwise, we do know how to use paper maps and CD players. 

Employer Brand. 

According to William Tincup, President at Recruiting Daily, employer brand is a “feeling that permeates your organisation… one-part values, one part culture, one-part experiences… in essence, employer brand is your unique scent.” 

Employer branding is about cultivating a unique identity and culture for your organisation, which feeds into every step of candidate and employee experience. This ranges from how you gain the initial interest and attention of people, which makes them want to work for you, to employee engagement, retention, and offboarding. An employer brand should be what sets you apart and align in a way that makes sense with the brand you promote to prospects and customers.  

What does it mean to be transparent around salary? 

Salary transparency refers to the practice of openly communicating information around compensation to both current employees and candidates.  

Some companies choose to disclose all salary data publicly – Buffer is a great example of this. 

Other organisations achieve this by actively creating a culture where conversations around pay and money are seen as necessary and normal. Whether it be in their job ads or internal performance reviews, salary is spoken about without that uncomfortable air of taboo. 

Now, onto the evidently controversial question, is salary transparency necessary for a Gen Z friendly Employer Brand? 

To make informed decisions on how to curate an employer brand which is Gen Z friendly, you first must know your audience. 

According to Adobe’s survey, 70% of young job seekers say they are worried about a potential recession. Gen Z have also bore witness to the effects of Brexit, the global pandemic, and now the cost-of-living crisis on the working landscape and had to contend with the aftermath – so their high anxiety shouldn’t come as any kind of surprise.  

The cost-of-living crisis cast recruiters, HR, and leadership into territory where they attempted to adapt their practices to the new mindset and tone of job candidates, as well as current employees. 

Two major takeaways for many brands so far have been; actions speak louder than words, and never stop communicating. While insensitive bonuses and keeping staff up to date on what cost of living crisis support they can access with their organisation comes under this umbrella, one may argue a simple, yet impactful communication an organisation’s recruitment team can make to job applicants is disclosing the budgeted salary in the early stages of the recruitment process. 

If an organisation fails to stick to simple practices such as this, Gen Z aren’t afraid to move on if they are unsatisfied. On average, Gen Z stay in a job for two years and two months, a real contrast to the average five years for Gen X and eight years for Baby Boomers. Whether this job-hopping trend has arisen due to the misunderstood short attention span of Gen Z, or a desire to chase that new job pay rise – which may give Gen Z the financial security they seem to be craving – recruiters need to take this into consideration. If young candidates are more likely to be focused on the short-term benefits of a role than the long term, you’re taking yourself out of the race pretty quickly if you don’t let potential applicants know up front what one of the most significant ones would be. 

Additionally, the information age has enabled Gen Z to leave no stone unturned when it comes to making their voice heard or educating themselves on the working world. A simple scroll through #WorkTok on TikTok will reveal endless content of people sharing their red flags for a toxic workplace, employment lawyers sharing what malpractice looks like, and satire around what employees wish they could sign their emails off with during a stressful project. 

One could argue that the culture of sharing and immediacy which social media platforms, such as Tik Tok have created, has played a role in not just Gen Z, but job seekers of every generation, developing an expectation that there’s no good reason organisations shouldn’t divulge salaries for vacant roles upfront.  

Moreover, though Gen Z seem to be the loudest about their attitude towards the workplace, being quick with this communication is potentially key to your employment strategy with candidates of all ages. For example, the attention span of Gen Z does not have the best reputation, with a study finding those aged 18-24 only had 1.3 seconds of active attention to offer to ads. But this isn’t much of a contrast to the age 45-54 age group who still only gave 1.9 seconds of active attention. With access to pretty much unlimited information with a single swipe, talent of all ages seems to be less likely to be caught waiting around. 

Looking at all of this, it can seem difficult to understand why employers wouldn’t be transparent about salary during the recruitment process to begin with? 

Surely it would benefit their chances with not just Gen Z talent, but also job candidates of all ages? 

Adzuna estimates candidates see about 14 million hours go to waste every year applying for roles that aren’t suitable for them, and over half of job seekers have outright declined a job once they found out the budgeted salary in the later recruitment stages. So, why would anyone want to risk the waste of such a huge amount of time, effort, and resource on both sides?  

It may be that though employers agree to pay transparency as a premise, the worry remains that disclosing such information on the open market gives competing organisations an edge. Maybe they would out bid you – what then? And maybe organisations don’t want Gen Z if they show no hope of being retained long term due to their job-hopping habits – so why bother appealing in the first place? 

But perhaps hope is not lost.  

The key takeaway from all of this is Gen Z’s focus is on the transparency half of ‘salary transparency’, and what that indicates about the culture, leadership, and integrity of an organisation.  

Research indicates Gen Z has all kinds of priorities, so there’s no reason for employers to feel it’s a fruitless quest attracting Gen Z talent. One of the generation’s key characteristics is that it can be difficult to pin down any across the board facts about Gen Z, as ultimately, they are not a monolith.  

One thing we can be sure of is that they are the most diverse generation to date, from background to beliefs, making it difficult to create an Employee Value Proposition which can be successful with any and every Gen Z-er. This means that when competing with employers who have meatier budgets or scouting for young talent who want to stick with a company long term, this is good news. To put it simply, you can be transparent around salary, not have the highest offering on the market, and still lasso in talented members of Gen Z. 

Firstly, Gen Z the vast majority of people have strong feelings when it comes to social accountability. They want to see companies act according to their company values and follow ethical practices. You wouldn’t think this is a big ask. However, it’s something which should be done thoughtfully. While writing this piece, I was kindly sent this video by a millennial colleague of mine, which perfectly delivers some key ideas on this topic. To summarise one of the outstanding points, when a brand aligns itself with a social cause it’s normally pretty obvious if it’s done for show. So, choose mindfully, and be prepared to stick by it and practice it. 

For example, while a post on LinkedIn raising awareness around the effects of burnout in the workplace may a catch potential candidate’s eye, pairing it with the introduction of company policies which offer tangible mental health support to employees which will truly make an impact can be better for building a strong relationship with candidates, as well as your existing workforce. 

A big part of mental health support means offering a flexible working model to aid in employee work-life balance. According to a Personal Capital survey, 85% of Gen Z would agree to a trade-off, such as a pay cut, to have the flexibility to work from home when they want to. 

Secondly, despite Gen Z stereotypes implying their access to and interest in technology has made them anti-social, a survey found that Gen Z highly values building relationships and connections in the workplace, with 90% preferring to have human element to their teams. 

Therefore, humanising your employer brand is a key building block for offering an attractive role. Thinking about how you showcase the strengths of your culture and the excitement of your organisational mission or growth is paramount. This starts on channels like social media but extends throughout your whole recruitment process, from the topics you discuss in interviews to how you communicate with candidates. Humanising your employer brand means forging a deeper, more genuine connection with your potential new employees, it means being ever aware of the fact that people are a business’ most valuable asset and acting with this value at the core of your organisational activities.  

Similarly, in a recent study by Monster, 83% of Gen Z individuals stated an employer’s commitment to diversity and inclusion is significant when choosing where to work. Another poll found 75% of people in Gen Z said they’d reconsider applying at a company if they weren’t satisfied with their diversity and inclusion efforts – and it’s important to note here, that part of being inclusive includes transparency. So, take a good, honest look at your workforce and DE&I policies – what can be done to grow more in this area? What training can you offer your people? Do you have diversity at every end of your organisation, from entry level graduates to C-Suite? What have you actioned off the back of diversity and inclusion reporting in your organisation? Are you inclusive to various religious and cultural holidays? Do you DE&I policies get enforced – or are they simply symbolic? 

Overall, while data seems to indicate salary transparency is a main player in appealing to most of the Gen Z talent, what that salary actually is has some wriggle room. Now, of course, salary is important. This should go without saying. Money allows people to provide for their families and offers security. It funds hobbies, birthdays, and other little human joys. Every person should be fairly compensated for their work. If you’re not able, or unwilling, to compensate your people fairly, then that’s another conversation altogether. But assuming you’re offering salaries which are logical for the vacant role, it’s important to remember that it isn’t the only thing included in an Employee Value Proposition and isn’t the only thing candidates care about.  

What all of this demonstrates is that organisations should not be fretting about disclosing that they are only able to offer modest salary range. Instead, look at other areas of your employer brand. How can compensation be offered in other areas? How can Gen Z be offered work which will make an impact they can regularly see? How can you as a company involve yourself meaningfully in social issues? How can you humanise your organisation through flexibility, community involvement, culture, and transparent communication? 

It’s easy for employers to get absorbed by the salary and fret about their budget – overlooking that it’s the transparency and what that signals to Gen Z about your brand is what makes them want to engage with you. It tells a story far greater than saving them asking a question in the first stage of their job search.  

Gen Z isn’t really desiring anything the generations before them didn’t. They don’t want to waste anyone’s time. The want employers to be honest. They want to be happy at work and contribute meaningfully. These values aren’t unique to today’s graduates or interns, they just have the platform of social media to amplify their opinions, and a scary looking economy to give them a nudge. They aren’t some strange, nomadic souls that enjoy job hopping for the sake of it, but rather are at the forefront of employees across all generations who are seeking wellbeing at work, and fair compensation. Who knows, maybe some of the tweets are right – maybe Gen Z can be demanding – but if they’re demanding something as sensible as transparency, that’s an opportunity for progress and innovation in more areas that one may initially think.