How to Communicate Compensation Plans to Differing Generations

This is an excerpt from our recent ebook collaboration with BambooHR entitled Everything You Need to Know About Communicating Pay. Download the full ebook here.

Workforce demographics are changing, and preferred communication styles vary considerably among different employee groups. One helpful demographic to consider when crafting your compensation communication plans is generation.

Here are the things to note for today’s generations in the workforce:

Baby Boomers

Born: 1946–1964

Size of group: 74M

Many boomers today are focused on retirement. They tend to be more tenured employees, and their career mindset is one of loyalty, self-drive and exceptionally high work ethic. Boomers are used to pay-talk being private — these are not the employees who would be comfortable seeing everyone’s pay posted on the wall or the company intranet.


Born: 1965–1979

Size of group: 66M

Members of Gen X tend to be pessimistic. They’ve seen the end of pensions and the shortening of tenures — an overall decline in employer commitment to employees. Gen Xers are focused on management, and are somewhere between boomers and millennials in terms of comfort for open pay communications. They’re generally okay to talk about rationale for pay, but less enthusiastic about talking about pay specifically.


Born: 1980–1995

Size of group: 74M

Millennials are more public with communication. This is the generation that dove into Facebook without considering the impact their status updates may have on future job opportunities. They are used to seeing and sharing info, and there’s little to no taboo in talking about pay. Millennials are focused on career advancement, tend to be idealistic and value work/life integration and fairness and flexibility in the workplace. The focus on fairness and flexibility is especially relevant to communications on pay.

Generation Z

Born: 1996–Present

Size of Group: TBD, 69M+

Gen Z is just starting to enter the workforce, and with them, we’re seeing the pendulum swing back from the openness of millennials. Gen Z is focused on learning with a purpose — they need to see how things tie back to the ultimate objective, otherwise they’re not interested. Members of Gen Z have a realistic, multicultural mindset in their work, and they are tech natives. Their comfort with technology makes communicating over tech easier, but they tend to be more private than millennials, as seen in their preference for more transient social media (read: stuff that disappears), like Snapchat.

The meta message: There’s no one right way to communicate compensation that will fit the preferences of all generations.

Five Generations of 2020

Five different generations will be represented in the workforce in 2020.

We’re in for quite the diverse group in terms of generational norms, expectations and preferences. But for now, and for the immediate future, millennials will be the majority group — and they prefer transparent pay practices.

(A note on Gen Z: While it’s true they’re beginning to enter the workplace and are more private in their communication, the workforce is still mainly millennials and likely will be more many years. And millennials want things open.)

This may be a sort of forcing function for organizations to revisit their compensation communication plans, which is ultimately a good thing for everyone. It may be frustrating for non-millennials to support greater transparency, but it creates the opportunity for more effective and productive organizations.

It’s also a good idea to think about other ways of grouping and examining your workforce outside of generations. Consider job function: Maybe accounting prefers more private conversations about pay, while sales is much more open. Also think about job level: At some levels, it makes perfect sense to communicate openly about pay, like entry level. You may find, though, that the higher the level, the less interest in being open in pay communications.

There are regional differences, too. Perhaps folks on the east coast wouldn’t dream of speaking openly about pay with colleagues, while west coasters feel perfectly comfortable doing so.

Figure out the various groups within your employee base, and target your messaging accordingly. You can choose to craft one message to reach the most people, or put together a multifaceted messaging plan.

Want more tips and tricks for effective compensation communications? Download the ebook Everything You Need to Know About Communicating Compensation today!

Tell Us What You Think

Do you change your approach to communicating compensation, depending on the audience? We want to hear from you. Share your experiences in the comments.

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