Benefits to offer to hire & retain Generation Z

Written by: Chase Charaba
Published on August 24, 2022.

With Generation Z entering the workforce in record numbers, organizations are looking for the best ways to attract and hire younger workers.

According to the World Economic Forum1, Generation Z will represent 27% of the workforce by 2025. But, with the Great Resignation encouraging millions of Americans to leave their jobs in search of better opportunities, you'll need to go above and beyond to hire Gen Z in a competitive job market.

According to a survey by Personal Capital2, 91% of Generation Z is interested in switching jobs. With so many Gen Zers entering the workforce or changing jobs looking for better opportunities, it's essential to cater to their unique needs to recruit and retain them.

Benefits have always been key for attracting and retaining employees. However, the wants and needs of the younger generations aren't the same as their parents or grandparents. Many traditional benefits aren't as appealing or flexible as they need to be to hire Gen Z candidates.

In this article, we'll explain who is considered part of Gen Z, how to attract them, and what benefits these young workers want in the workplace.

Looking to offer flexible benefits your Gen Z employees will find attractive? Learn more about offering employee stipends in our guide

Who is considered part of Gen Z?

Generation Z is the generation following the Millennial Generation, or Gen Y, but preceding Generation Alpha. There's no clear definition of where Gen Z begins and Millennials end, as many younger Millennials and older Gen Zers share similar traits, but there are two common definitions.

Many media outlets use the range of those born from 1995 to the early 2010s as Gen Z, while Pew Research Center uses 1997 as the starting year and 2012 as the endpoint. The U.S. Census and the Library of Congress cite Pew's definition for Gen Z.

Those born in 1996 and 1997 are often referred to as cuspers, or Zillennials, because they have traits of both Gen Z and Millennials and likely have more in common with their immediate cohort than with younger Gen Zers or older Millennials.

Members of Gen Z have also been called Zoomers, in reference to Baby Boomers, and iGen.

While Millennials remain the largest living generation in the U.S., Gen Z has surpassed every other generation worldwide, including the Baby Boomer generation, making up 32% of the global population, according to Bloomberg3.

With more than 60 million Gen Zers in the U.S., organizations need to prepare to welcome more of this generation of workers in the years to come.

What does Generation Z want in the workplace?

When it comes to the workplace, Gen Z expects flexibility, opportunities for professional development, diversity and inclusion, a healthy work-life balance, and an easier, modern hiring process. Let's dive into each of these in more detail.


Gen Zers value flexibility and a work-life balance above all else. They prefer to work individually rather than in teams, and they often juggle multiple side gigs such as freelance work and their own businesses. They need the flexibility to pursue all of their interests and work independently and at their own pace.

Flexible workspaces and remote work are top wants for Gen Z. Given their adept ability and comfort working with technology, they can easily adjust to and excel in remote work environments.

According to the same Personal Capital survey, 85% of Gen Zers would agree to a trade-off, such as a pay cut, to have the flexibility to work from home when they want to.

Providing remote or hybrid work opportunities is a sure way to attract Gen Z job candidates.

Opportunities for professional development

One common trait among members of Generation Z is their desire to learn new things and acquire new skills. Providing on-the-job training and ample learning opportunities can be a great way to entice this generation of talent to your organization.

Gen Z also looks for opportunities for career growth. Because older members of the generation have grown up in the aftermath of the September 11 attacks, witnessed the Great Recession, and been through the COVID-19 pandemic just as they began to graduate from college and enter the workforce, many Gen Zers are cautious of the economy and employers.

Providing opportunities for career advancement is a great way to attract and retain Gen Zers. They'll feel more stable in their career, and they'll be more likely to stick with your organization instead of looking for work elsewhere.

Diversity and inclusion

Diversity and inclusion in the workplace are also important to Gen Z because they're the most racially diverse generation in the U.S. According to Pew Research Center4, 52% of Gen Z are Caucasian. That's a smaller share than what you'll find for Millennials, which are 61% white.

Additionally, 35% of Gen Zers say they know someone who prefers gender-neutral pronouns—more than any other generation. As a result, they're looking for organizations that acknowledge diversity and sexual orientation and do their best to make everyone feel like they belong.

Modern hiring processes

To convince Gen Z candidates to apply to work for your organization you'll need to modernize the application process. As digital natives, Gen Z job seekers don't want to apply for jobs in-person or visit job fairs. They're more interested in an easy online application that works on mobile devices, preferably through social media sites such as LinkedIn or Facebook. You'll also want to develop a careers page on your company website.

Your job postings should include a salary range (remember, Gen Z applicants are cautious about money, their financial future, and the economy), benefits, opportunities for career development, company culture, and job requirements.

Lastly, your hiring process should be quick. A Gen Z job seeker isn't likely to wait around for a response. They expect an immediate response that you've received their application and a timely response indicating whether you're interested in them or not.

What benefits does Gen Z want?

There are several benefits and perks that Generation Z desires in their ideal workplace. To entice young talent, you'll need to ensure that your benefits are flexible and individualized.

Despite what some claim, Gen Z still values traditional benefits such as health insurance and retirement plans. But, they do value more personalized benefits and immediate employee perks.

PeopleKeep's 2022 Employee Benefits Survey Report found that only 38% of Gen Z employees feel the benefits they're currently being offered are worth the cost to them. Additionally, 70% of Gen Z employees said they value being able to choose their own benefit.

Our report also identified the benefits and perks that Gen Z wants most in the workplace:

  • Health benefits
  • Paid time off (PTO) and sick leave
  • Dental insurance
  • Vision insurance
  • Flexible work schedule
  • Retirement benefits
  • Mental health benefits

Wellness benefits are also becoming increasingly desirable to Gen Zers, Millennials, and Gen Xers.

Because Gen Z values a work-life balance, unlimited PTO, flex schedules, and parental leave are incredibly desirable benefits.

According to MetLife5's 17th Annual U.S. Employee Benefits Trends Study, 50% of Gen Zers said employers recognizing work-life balance is a must.

Young people want to have the option to travel, take mental health days, and support their new and growing families. Not offering generous PTO will likely keep Gen Z candidates away.

While Gen Z doesn't have as much student loan debt as the previous generations do, student loan repayment and tuition reimbursement remain attractive employee benefits. According to Experian6, the average student loan debt among Gen Z in 2020 was $17,338. With tuition becoming more expensive, this number will likely increase as more Gen Zers head to college.

Commuter benefits are also increasingly desired by younger generations who work in-person, especially in public transportation fares or mileage reimbursement.

How to offer a flexible health benefit to attract Gen Z workers

Much like other generations, Generation Z values healthcare benefits. However, as Generation Z employees are young, they don't necessarily need traditional employer-provided group health insurance. These plans can be expensive for both employers and employees, especially since Gen Z isn't likely to use their benefits as much as older employees.

Gen Z wants more flexibility in all aspects of the workplace, including health benefits. A group health insurance plan doesn't provide the level of personalization that Gen Z has come to expect.

Luckily, there are health benefit options that are flexible, personalized, and easy to administer, including health reimbursement arrangements (HRAs) and health stipends.

Health reimbursement arrangements (HRAs)

HRAs are great options for businesses of all sizes looking to provide more flexibility than traditional group health insurance plans. With an HRA, employees can request a reimbursement for their individual health insurance premiums and qualifying out-of-pocket medical expenses.

You can set monthly or annual allowances for your employees. Once an expense is approved, you simply reimburse your employees on their next paycheck.

Best of all, HRAs are tax-free, meaning you don't have to pay payroll taxes. Your employees don't have to pay income taxes on their reimbursements as long as they have a health insurance policy that meets minimum essential coverage (MEC).

HRAs allow your Gen Z employees to choose their own individual health insurance plan that best fits their needs. They can then select which eligible expenses they want to be reimbursed up to your set allowance.

Three of the most popular HRA types include:

Health stipend

If your Gen Z employees are eligible for advance premium tax credits for their individual health insurance premiums, a health stipend might be better than an HRA.

Health stipends can work like an HRA, requiring that your employees submit a request for reimbursement for their health expenses. However, they're taxable and must be reported on your employees' W-2s.

Because HRAs are tax-free, employees can't use both their HRA and their full tax credit. A stipend allows your employees who qualify for tax credits to receive their stipend and still use their credits.

Since employers are in control of which expenses are reimbursed under a health stipend, you can also choose to reimburse employees for mental health visits such as counseling or therapy, even if the employee doesn't have a diagnosed mental illness. This can be a huge benefit for Gen Z workers who often look for mental health benefits in the workplace.

How to provide wellness benefits

Wellness benefits are one of the top workplace wants for Gen Z talent. This is partly because Gen Zers face more stress and uncertainty than other generations.

According to the American Psychological Association7, Gen Z is more likely to report their mental health as fair or poor compared to other generations. They're also more likely to say they've received treatment or therapy for mental health. These rates have only increased following the COVID-19 pandemic.

With mental health needs on the rise, wellness benefits are more important than ever for your employees.

Wellness stipends help you easily offer an employee benefit while giving your employees the freedom to choose what wellness programs matter most to them.

Like with HRAs and health stipends, you can set a monthly allowance for employees' wellness expenses. Your employees then submit their expenses for reimbursement up to their available allowance.

Employees can use their wellness stipend on fitness and yoga classes, meditation classes and apps, gym memberships, sleep and nutrition trackers, and more. These activities can help reduce stress and improve the overall health and wellbeing of your employees. This, in turn, helps them to be more productive at work.

Remote work

Remote work and flexible schedules are two of the best ways to attract and retain Gen Z employees. If you allow your employees to work remotely, you can extend your benefits by offering a remote work stipend.

With a remote work stipend, you can reimburse your employees for their internet access costs, cell phone bills, and home office setup costs.

By offering a remote work stipend, you can ensure your employees have the tools they need to do their jobs from home. You'll also satisfy local and state laws in some places which require remote work expense reimbursement.


When hiring Gen Z talent, you need to focus on personalized and flexible benefits that support employee health, wellness, and a work-life balance. Ensuring that you create an inclusive, diverse workforce with PTO and opportunities for growth will allow you to attract and retain Generation Z workers.

When offering health and wellness benefits, HRAs and employee stipends are great choices because they provide flexibility and put control of the benefits in the hands of employees.

If you're ready to offer flexible health and wellness benefits to your employees, PeopleKeep is here to help. Our personalized benefits administration software allows organizations of all sizes to provide HRAs and employee stipends without the hassle.

Schedule a call with a personalized benefits advisor today to see which benefits work best for your organization

This blog article was originally published on March 30, 2022. It was last updated on August 24, 2022.








Originally published on August 24, 2022. Last updated August 24, 2022.


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