There’s a distinct line in the sand: work pre-COVID and the work world that followed. One of the most significant shifts since the pandemic began has been the rise of remote and hybrid work. Recently, however, many companies have pushed for a return to the office, questioning the effectiveness of remote work. But another pressing conversation isn’t just about where people work. It’s about how companies compete for top talent. In today’s environment, offering a high salary alone won’t cut it.
In fact, for many employees, salary isn’t the primary reason they stay or leave. According to LinkedIn’s latest Workforce Confidence survey of over 4,000 U.S. workers, nearly 40% of Gen Z and millennial employees said they would take a pay cut in exchange for more flexibility. Gen X respondents were less inclined, and baby boomers were even less likely. That’s no surprise, given their proximity to retirement.
This generational divide reflects a broader shift: Workers are quietly redefining what “compensation” means. Increasingly, it’s less about base pay and more about quality of life. CEOs and senior leaders can no longer assume a great salary alone drives loyalty, performance, or long-term retention. As the generational workforce continually shifts, companies that fail to evolve their compensation philosophy won’t just appear outdated. They’ll be strategically vulnerable. With that in mind, here are five forms of compensation today’s employees value.
1. Time Flexibility
Flexibility emerged as one of the most valued workplace attributes across generations. But this shift is about autonomy, not just choosing between remote and in-office work. Employees, especially shift workers, who comprise 80% of the global workforce, increasingly want control over when and how they work. Flexibility isn’t solely about location. It’s about rhythms, such as aligning work with energy, not just calendars. Time flexibility signals trust, respect, and, ultimately, freedom. In today’s labor market, rigidity isn’t just becoming outdated—it’s a growing retention risk.
2. Reasonable Workloads
Despite generational differences, most workers aren’t willing to take a pay cut for a lighter workload. But that doesn’t mean workload doesn’t matter. The compensation value here is ensuring employees do appropriate and meaningful work, not busy work that could be automated or delegated. In a global survey of 10,000 leaders, burnout was widespread, and the most effective solution wasn’t yoga or meditation apps. It was strategic delegation. Chronic overwork erodes productivity and morale. Consider your team’s bandwidth a strategic asset and allocate it wisely.
3. Purpose And Mission Alignment
Alignment with a company’s mission and values is a strong form of currency, especially for younger generations. Alignment of purpose and mission impacts recruitment and retention, day-to-day performance, engagement, and loyalty. Companies that can’t compete on salary can often compete here. Employees who feel their work contributes to something meaningful are more engaged and likelier to stay. Genuine engagement doesn’t merge because of vague cultural slogans. Contrary to some people, long-lasting engagement is created by stretching people with meaningful challenges and thus offering them depth and significance over surface-level metrics.
4. Growth And Upward Mobility
After workplace flexibility, the next biggest factor workers would accept a pay cut for is upward mobility. On average, just under 30% of employees would make this trade. However, among Gen Z, that number jumps to nearly 50%, which isn’t surprising given their runaway and ability to take risks and still recover. However, companies must not take advantage of this and offer up empty promises. Upward mobility must be visible and tangible through leadership development, mentorship, and other growth pathways that grow individuals.
5. Holistic Health And Well-Being Support
Gym stipends and basic health insurance are no longer differentiators. Companies must consider comprehensive, personalized, and proactive wellness to attract and retain top talent. Some options include addressing workplace fatigue, mental health, sleep deprivation, women’s health, and environmental factors like lighting or air quality. The future of compensation includes caring for the whole person, not just offering surface-level perks.
Salary Alone Isn’t Enough
It’s natural for leaders to default to salary when considering compensation: it’s measurable, familiar, and historically effective. However, behavior is evolving, and mindsets are shifting. In this new business landscape, the most innovative companies compete not just on paychecks but also on quality of life.