The research, which also shows that over half (51%) of full-time Gen Z employees in the UK will prioritise fully-remote arrangements when looking for their next role, suggests UK businesses are at risk of losing Gen Z talent to international competitors. In fact, nearly two-thirds (64%) of Gen Z-ers in full time work admit to being likely to prioritise pay over proximity to HQ when looking for their next job role.

This comes as new platform data from Deel reveals that wage growth for UK Gen-Zers is lagging behind other markets.

In 2024, globally, Gen Z workers received the biggest salary increases (9%), outpacing Millennial (7%) and Gen X (5%) peers as employers increasingly recognised how their digital skills and comfort within distributed teams could create value.

However, the UK is bucking this trend. Instead, Millennial and Gen X workers saw the strongest salary increases (8% and 6% respectively), leaving Gen Z workers (5%) behind in the wage race.

And it’s not going unnoticed – 64% said they felt older colleagues received better benefits and opportunities than people their age.

Demystifying Gen Z demands

It’s clear that pay is a top motivator for Gen Z employees. But it’s not just salary growth that’s front of mind.

The research highlights that flexibility is still incredibly important to this generation, with 63% admitting that they’d be looking for a hybrid role when it comes to their next opportunity. What’s more, Gen Z are also willing to meet their employers in the middle.

Workers are willing to extend ‘flexibility’ beyond whether it means being physically in an office. Over a fifth (21%) would be willing to work ET hours (GMT–5), only slightly less than the share who would only work local hours (24%), highlighting the threat international companies pose as competition for talent. European businesses would be the biggest winners, as 45% of Gen Z workers in the UK would be happy to work in any continental timezone.

“The message is loud and clear: Gen Z are acutely aware of their immense value in the marketplace and expect their pay and benefits to reflect it,” said Matt Monette, UK Country Manager at Deel.

Monette continued: “They possess the digital skills firms are increasingly demanding and in order to attract and retain them, businesses need to ensure their compensation and perks align with their demands, and that doesn’t stop with  pay. They are prioritising ‘time focused benefits’ – like greater work-life balance, the ability to work from abroad or buy extra leave – more than other demographics. If employers don’t deliver, local firms might not be your stiffest competition for the best and brightest – it will be those operating abroad”.

Delivering for your future talent

For business leaders looking to attract and retain the next generation of talent, there’s a juggling act at play: Balancing workplace policies with the demands and expectations of Gen Z staff, while also balancing the needs of the wider multi-generational workforce.

For businesses looking to get ahead, reviewing approaches to overall compensation can be an effective first step given wage growth remains stilted across demographics. Deel’s State of Global Compensation Report found that salary growth in the US for technical roles (+18%) was greatly outpacing the UK (+3%) and that the average full-time salary ($125,000) was $23,000 ahead of the UK’s.

Similarly, offering greater flexibility allows Gen Z needs to be met without alienating older workers. A Deel survey of more than 57,000 professionals on LinkedIn found that 73% felt all companies should offer hybrid working options, a lever that can be pulled to serve multiple age groups at once.

“Recognising generational differences in attitudes about work is crucial. By addressing gaps affecting multiple demographics businesses can begin to cater to their younger staff without alienating older groups,” Monette continued. “Gen Z might be the ones displaying a willingness to take on international roles, but there’s nothing stopping older colleagues from doing the same if their needs cannot be met.”

For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.