When fewer than half of your youngest employees believe they receive fair compensation, you have more than a morale problem—you have a retention crisis waiting to happen. According to iHire’s 2025 Multi-Generational Workforce Report, only 48.9% of Gen Z respondents feel fairly compensated, revealing a generational divide that HR professionals must address strategically.
Compensation perceptions reveal deeper workplace tensions
The data reveals a clear generational split in compensation satisfaction:
Gen X presents an interesting case study, with 31.3% explicitly stating they’re underpaid—the highest rate among all generations. This likely reflects mid-career compression, where experienced employees watch newer hires command salaries equal to or exceeding their own despite years of tenure.
These perceptions extend beyond base salary figures. Today’s employees evaluate compensation through the lens of transparency, growth potential and recognition. When salary structures remain opaque or advancement feels stagnant, trust erodes quickly.
Benefits that matter across generations
Traditional benefits maintain their importance across all age groups, with health insurance leading preferences for every generation: Gen X (64.8%), millennials (58.1%), baby boomers (57.8%) and Gen Z (52.8%). Paid time off ranks second for boomers (55.9%) and Gen X (52.8%).
However, younger generations increasingly prioritize benefits that address modern challenges:
This evolution suggests that while foundational benefits remain critical, employers must expand their offerings to include financial wellness, family support and emotional health resources to attract early-career talent.
Work-life balance trumps traditional perks
Beyond salary and benefits, work-life balance emerged as the dominant priority for younger employees. Gen Z (43.1%) and millennials (42.9%) selected it as their top non-monetary consideration, while Gen X followed at 31.8%. Baby boomers showed greater interest in flexible work arrangements (28.5%).
These preferences underscore the need for HR teams to approach compensation holistically, connecting salary discussions with flexible policies, professional development opportunities and comprehensive workplace wellbeing initiatives.
Recognition strategies vary by generation
The report reveals distinct preferences for workplace recognition across age groups:
For younger employees, the promise of upward mobility can be as compelling as immediate financial rewards. Older workers respond better to recognition that acknowledges their experience through flexible arrangements, bonuses or additional perks.
