Getting Gen Z Engaged with Equity Compensation

Content Team June 14, 2023 mins read

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Global Shares’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

Getting Gen Z Engaged with Equity Compensation

The relationship between Generation-Z and equity compensation go hand in hand if done right.

The newest generational group entering the workforce today is Generation-Z, or Gen Z for short. This post-millennial group is referred to as Gen Zers and they are typically born between 1997 and 2013.

Employee perks are an important aspect for employers to attract new workers, but especially so for Gen Zers. Equity compensation is one of those perks that can be very attractive for new employees to join your company.

Offering equity compensation allows employees of a firm to share in the profits via appreciation and can encourage retention, particularly if there are vesting requirements. At times, equity compensation may accompany a below-market salary.

Equity compensation is a benefit provided by many public companies and private companies, especially startup companies. Recently launched firms may lack the cash or want to invest cash flow into growth initiatives, making equity compensation a great way to try to attract high-quality employees. Traditionally, technology companies in both the start-up phase and more mature companies have used equity compensation to reward employees.

Gen Z is open to different forms of income

Generation- Z is more likely than previous generations to own stock options and cryptocurrency, but less likely to have a retirement account.

Like most workers, Gen Z wants promotions, good wages and attentive bosses but they are also interested in a diverse way to receive their wages unlike some of the older workforce.

A study from Glassdoor found that a good work environment with flexible hours and good pay, which can include equity compensation, is paramount. The research also noted that “easy job,” “employee discount” and “free food” were brought up often, highlighting employees’ appreciate additional benefits. An equity compensation program for employees is a valuable benefit to keep this unique generation of employees satisfied at work. Stock options for example offer a new source of income and are appealing to a younger workforce.

Gen Z work expectations include a sense of purpose so having a stake in who they are working for is a great way to fulfil that purpose. For Gen Zers, a job is more than just a pay check, and they are keen to see their hard work pay off.

Consider how you can manage progression within your organization. In addition to incentives through promotions and development opportunities, equity compensation options will likely pay dividends when it comes to recruiting and retaining staff.

Communicating equity compensation benefits to Gen Z

To communicate the benefits of equity compensation to Gen Z it’s important to meet them where they are, online. This generation is extremely passionate and participate in communities built around common interests on a variety of different platforms.

Facebook is the biggest digital media platform with close to 3 billion users but its growth among Gen Z has plateaued over the years. They are using other digital platforms, like Instagram, TikTok, Discord and Slack, which can be effective tools to communicate your message.

Gen Z is the first generation that has had the internet their whole life and the world’s knowledge at their fingertips. When communicating the importance of equity compensation, it is important to be as honest and straight forward as possible. The reason why this is important is because the internet generation will likely be searching for the benefits and negatives, so you want to be up front about any potential risk as much as opportunity.

Another way you can make this generation feel a part of the company’s success is to include them in it. For example, include employees in weekly meetings, town halls and scrums, and distribute company information via e-newsletters. Avoid surprises. Full disclosure is vital to maintaining trust.

Working with Generation-Z may require a more thoughtful and empathetic approach from managers than previous generations, and the benefits speak for themselves. Appealing to their sense of ethics, fairness and desire for long-term security will likely improve your recruitment process and broaden the pool to welcome this dedicated and highly motivated group.

How can Global Shares help?

At Global Shares, we can not only help you to design and launch your share plan — our team of dedicated communications specialists can help you create a bespoke communications package that’s tailored to your specific workforce needs.

Whether you’re trying to speak to your older demographic or you’re trying to get your Gen Z employees on board, our communications team can help you to demystify share plan education and boost your enrolment rates.

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Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.

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