Generation Y currently make-up around a third of the global workforce; by 2025 it will be 75%. Each new generation grows up thinking they are different from their parents and the generation before but, in the case of Gen Y it’s certainly true. They have grown up as tech savvy global citizens with debt and financial uncertainty the norm. They’ve been brought up to be independent, self-confident and unafraid to challenge.  Responsibility and purpose are strong drivers for this generation with well-established ethics and values from an early age.

From an employer they want something different – careers aren’t steps they need to climb, they won’t put in years of dedicated work to find a healthy pension to keep them comfortable during 30 years of retirement.  The balance of power has shifted to one of partnership and equality.  Gen Y want to work hard and deliver results for their employer, but they understand their worth and what skills they bring. They are good negotiators who aren’t afraid to ask for what they want or leave if they don’t get it. In short the world has changed.

Employers have recognised the change and understand that they need to look at how they operate.  They realise they can’t mould Gen Y to fit their organisation; they need to change the organisation to fit Gen Y.

Top Gen Y talent is essential for an organisation that wants to thrive in today’s business world.  Disruption is the buzz word that accompanies this generation turning accepted norms on their head.  Genuine evolutionary and revolutionary thought leadership is King and the pace of change is eye-watering.  To deliver, organisations need the skills and experience of Generation X and baby boomers but, critically, they need the disruptive nature of Gen Y.

What does that mean for Reward?

Gen Y has driven an exciting raft of new reward practices from volunteering to bespoke personal development and life stage related benefits.  More of our clients are developing reward strategies and practices with Gen Y in mind and segmenting their employees by demographic is the logical first step.

Annual Appraisals

The key issue is around the annual reward and performance cycle.  For a generation that is used to instant gratification and immediate feedback, waiting a year for an annual performance appraisal just doesn’t cut it.  All of us in reward and performance management need to ask if the annual cycle works or is it an effective way of rewarding people? Or do we need to be more flexible and build in smaller steps as we go along?

Pay Frameworks

A pay framework has always been an essential part of an organisation’s offering to its employees.  But, with a move away from traditional hierarchy and linear careers, the development of a culture of openness and a demand for clear and strong ethics around fairness and equal pay, your pay framework needs to stand up to increased scrutiny.  It needs to be based on sound principles that reflect your business and industry as well as having good benchmarking and evaluation at its heart.

Flexible Working

Flexible working has been a popular option for mums returning to work after maternity leave but it’s becoming attractive to the wider employee base.  Employees are often running their own business in their spare time or carrying out voluntary work alongside their job and want the flexibility to do that.


Sabbaticals are becoming more popular offering employees the opportunity to take unpaid leave from the business in order to pursue personal ambitions; for example travel or projects such as property development.  For organisations with a naturally ‘quiet’ season this can be of great mutual benefit.

Personal Development Opportunities

Education has been offered to employees as reward and motivation for many years but usually on the condition that the qualification or course is relevant to the role that they’re doing.  The emerging trend is to offer employees the opportunity to study subjects that are of general interest to them such as a language or creative skill.  Businesses are seeing the long term benefit that broad personal development, self-improvement and growth of individuals can bring.

Volunteering Opportunities

Offering employees volunteering opportunities for community and charitable projects is on the increase.  38% of 16-25 year olds are volunteering once a month and employees are seeking employers that share this value and provide them with the opportunity to volunteer, whether that be by reading in the local school or supporting a charitable project.

Action Plan

  • Provide lots of regular feedback – not just once a year
  • Incorporate Corporate Social Responsibility
  • Review your benefits offering
  • Take a critical look at your pay structure – is it up to scratch?
  • Accelerate your pace
  • Make work more enjoyable!