Generation Z is the only segment in the labor market that is showing growth, according to a report from Paychex. In fact, the study found the workforce’s composition is shifting as more Gen Z members seek full-time and long-term roles, Gen X begins to retire and Millennials enter their prime earning years.
The report, the Rise of Generation Z, also found that Gen Z participation in the small business workforce has surpassed that of Baby Boomers. The survey’s data was derived from payroll data as of 2023. The research was intended to help business leaders understand the growing importance of the segment — which represents 20% of the workforce — to the economy.
“Considering these facts, employers need to develop recruiting and retention strategies that keep Gen Z at the forefront, appealing to their values-based approach and celebrating the unique contributions this group brings to the table,” said Paychex Vice President of Risk, Compliance and Data Analytics..
Changes in the New Generation
According to Paychex, the Gen Z workforce is made up of more women than men — 53% female and 47% male. The study found the female members of the generation represent 20.5% of all female workers, while males represent 17.7%.
In addition, the report showed that Gen Z is working toward closing the wage gap between men and women. Their gap is $2 compared to the $6.74 across all other generations. Hourly earnings growth for Gen Z is more than double the national average, at 9.3% and 4.5%, respectively. The company believes this is likely due to the generation’s lower-than-average wages ($19.79 per hour).
The company said found that Leisure and Hospitality was the only industry in which female Gen Z employees make more than their male counterparts, but by just 8 cents an hour. The industry was also the most common among Gen Z workers, with the generation having the sector’s highest representation at 37.2%.