Why money isn’t everything for Gen Z workers in Malaysia

Employers must embrace new practices to attract fresh blood into talent pool, say experts

GENERATION Z (Gen Z) employees – the freshest faces to enter the job market – have sometimes been deemed to be difficult to satisfy by employers as they look for things beyond monetary fulfilment.

These school-leavers and fresh graduates aged between 18 and 25 believe there is more to working life than bringing home a fat pay.

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UCSI Poll Research Centre chief executive officer Assoc Prof Dr Eugene Pek Chuen Kee said Gen Z is more nuanced in their expectations, expecting to gain flexibility, work-life balance, career growth, perks, benefits, coaching and empowerment, in addition to salary.“

Gen Z is also driven by idealism and they would rather work for ethical companies that champion social causes,” he told StarEdu in an email interview.

ALSO READ: Fresh grads reveal employer of choice

He said a Deloitte survey involving 1,531 Gen Z respondents showed that 77% indicated that it’s important to work at a company where value alignment is achieved.

He said, in essence, Gen Z and the generations before them have different primary motivating factors when it comes to seeking employment.

“Boomers exhibit a stronger preference for career and monetary rewards, Gen X birthed the entire work-life balance argument and millennials prioritise training, mentoring and feedback. “Gen Z essentially wants all of the above, and more.

“Millennials want feedback but Gen Z wants constant feedback. On top of financial rewards, Gen Z wants social rewards.

“Gen Z values career development plans that provide diverse and entrepreneurial opportunities within the safety of stable employment, and they may offer more loyalty to companies that foster such an environment,” he said.

In the same way Gen X reacted to their boomer parents burning out due to overcommitment to work, Pek said Gen Z’s motivating factors are a reaction to millennials and the societal challenges of their time.

“While Gen Z may not emphasise high salaries or financial rewards as much as their boomer or Gen X counterparts, this does not mean that money is not important to them.

“Company culture is a big thing for millennials. Gen Z takes things further by emphasising a company’s values, social commitments and transparency,” he added.

‘Constant war for talent’

Pek, who is also UCSI University Faculty of Business and Management dean, said the best companies are constantly engaged in a constant war for talent.

“This sees them adapting and pivoting their approach to meet and exceed the needs – and wants – of present and future employees.”

This means that in today’s working world, it may be possible for these freshies to find their dream companies to work for, he said.

“There is a reason why companies like Google and Meta offer flexible work arrangements, free meals, generous perks, recognition, mental health support and financial coaching.

“Think about it: such empowering and collaborative work cultures would not have existed two decades ago. Interestingly, such an environment may not be enough for Gen Z,” he said.

Pek said they want corporations to be good global citizens that take on societal challenges from climate change to gender equality.

“But while value alignment, purpose, empathy, sustainability and respect, among other values, are important, one should also be realistic that the best companies – however great they may be – are not perfect,” he added.

To land their chosen roles, Pek said, these jobseekers need to also bring their A-game to the table.

“It’s an ultra-competitive world out there so Gen Z employees need to ensure that they have the skills, mindset and agility to thrive.

“Increasingly, Gen Z will upskill themselves through micro-credentials, earning badges progressively as they acquire new skills. They’ll also need to collaborate and network well,” he said.

University of Nottingham Malaysia (UNM) Careers Advisory Service head Alicia Ch’ng said Gen Z selects their employers based on what the company and its leader stand for, and expects their employers to value them in return and pay them a fair wage.

She also said Gen Z is generally well supported by their parents.

“The upbringing of this generation is very different from that of the generations before them.

“Parents of Gen Z may be more educated, well-to-do, or have less children, thus are able to focus more on providing the best for their children.

“The parenting style could also be motivated by the fact that they are trying to ensure their children do not have to go through the same tough life as they may have experienced,” she added.

Ops Harapan Youth leader Ng Yeen Seen said not placing importance on salary is mostly found among Gen Z members who are well educated, urban and have money to fall back on.

“But if you talk to those who need to put food on the table, money is very important based on my hiring experience,” said the founder of the non-governmental organisation.

She added that it is all a matter of perspective.

“The priorities of a 35- or 40-year-old who has to put food on the table and send his children to school are different from a young 20-something who does not have many responsibilities on his shoulders,” she said.

The latter group, she added, feels it is okay to quit anytime they like because they have parents and family to depend on.

Ng also said she believes that those newly entering the workforce and the older generations are ultimately looking for the same thing from their careers: a better life.

Emphasis on flexibility

Pek said multinational companies (MNCs) and forward-looking companies in Malaysia may be better prepared to engage and retain Gen Z talent.

He said MNCs have the luxury of leveraging the best practices and insights from their many global offices, while forward-looking companies could adapt by studying the best practices of highly-admired companies.

“That said, these local companies are the minority,” he added.

He also said that many Malaysian companies are slow when it comes to adapting to the needs of the Gen Z workforce, or even millennials.

“In fact, many are resistant even though some changes, like longer maternity and slightly reduced working hours, were implemented in more advanced nations years ago,” he said, referring to the deferment of the implementation of the amended Employment Act to Jan 1 next year after mounting pressure from employers.

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said Malaysian employers need to relook at their employment practices to attract and retain Gen Z talent.

Gen Z, he said, places a lot of importance on flexibility in work arrangements, instead of salary.

On average, he added, employees tend to stay with a company for 4.8 years but the younger generation usually stays for an average of 2.4 years.

“Companies need to establish work-life balance practices at the workplace to strike the desired work-life requirements of employees.

“Employees today demand flexibility tailored to their specific needs, be it work-life balance, physical and emotional health, or caring for family,” he said.

However, for flexible work arrangements to be successfully implemented, it requires supporting values and beliefs within the organisational culture, and middle management to adopt a mindset that values flexibility.

“In order to gain competitive advantage in attracting new talent and retaining existing talent, companies need to practise flexibility at the workplace,” he said.

Syed Hussain said the compensation system needs to be reviewed so that employees are rewarded based on their productivity and performance.

The changing landscape of jobs and workplaces has been making inroads due to advances and the rapid pace of technology, the Fourth Industrial Revolution and the Covid-19 pandemic.

“Covid-19 accelerated consumer and business trends that are likely to persist: remote work and virtual interactions, e-commerce and digital transactions, and deployment of automation and artificial intelligence,” he added.

“Malaysia needs to review its policies to ensure that more skilled talents, especially the younger talents embodied within Gen Z, will choose Malaysia as their first choice,” said Syed Hussain.

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