Results of the 2023 US New Graduate Pay and Generation Z Compensation Survey

According to LinkedIn, hiring new talent, especially those early in their careers, is critical to building an adaptable, flexible workforce. At this stage in their careers, young workers are more open to learning new skills. They also come with fresh perspectives and ideas to help your business get ahead of the competition.

It’s exciting to recruit fresh talent, but many hiring managers are left scratching their heads with shifting preferences, setting graduate hiring salaries, or figuring out the perks that Generation Z finds the most valuable.

Instead of simply guessing, use real-world data to create job postings and employee perks that appeal to the up-and-coming generation.

With the US New Graduate and Generation Z Compensation Survey, you can make better, more informed HR decisions regarding hiring young talent. With data across 12 types of degrees and 15 disciplines, you can get your starting pay right. Take it even further with valuable insights into the top recruitment and compensation trends based on data from over 270 organizations nationwide.

The following relevant insights will give you an idea of what you can expect from this survey.

Generation Z perks

Offering appealing workplace perks is very important to Generation Z. Employers typically offer perks related to workplace comfort, social interactions, personal needs, workplace amenities, and workplace culture.

These are the most popular workplace perks in each category:

• Comfort: Standing workstation, comfort/privacy rooms, break area activities, free snacks, and paid fitness/gym membership
• Social: Organized community service efforts, philanthropic giving programs, participation in corporate challenges, paid leave for volunteering, and regularly sponsored networking opportunities
• Personal: Flexible remote work/work from home, maternity/paternity leave, tolerance of facial hair, tuition reimbursement, and tolerance of fashion hair colors/tattoos/piercings
• Amenity: On-site fitness facilities, local business discounts, pet insurance, travel discounts, and technology discounts
• Culture: Compensation/competitive pay, challenging and rewarding work, recognition programs, career development programs, and respectful sharing of ideas and opinions

Based on the survey responses, some organizations are considering including additional workplace perks based on market demand and the needs of their employees.

Some of these include:

• Extended parental leave
• Paid volunteer time off
• Free lunch
• Spot bonuses
• Casual dress code
• Unlimited paid time off

New graduate pay transparency is key

One key factor for attracting new graduates is pay transparency. One recent study found that 85% of recent graduates are less likely to apply for a job if the salary range isn’t shared in the job posting.

In our New Graduate and Generation Z Compensation Survey, we’ve seen an increase in the number of employers offering pay transparency, with 37.6% saying they provided this in 2023.

Beyond including the pay range in the job posting, pay transparency may also include the following:

• Pay structure and ranges available
• Market ranges visible to all employees
• Internal ranges posted company wide
• Annual pay statements provided

Starting salaries for new employees

Starting salaries vary by region and degree. The New Graduate and Generation Z Compensation Survey breaks down starting salaries by degree level and geographic region.

For example, if your business is located in the West Coast region and you hire someone with an Associate’s degree, the average starting salary is $65,514. If someone has a Bachelor of Science degree, the average starting salary in the West Coast increases to $70,072.

The survey also breaks down compensation data by percentile so you can see how your starting salaries compare to those of others in your region and industry. You can also see specific data for various degree disciplines. For example, the average starting salary for someone with an engineering degree in the North Central region is $76,680.

Recruitment strategies for new graduates

Many organizations actively recruit new graduates, co-op students, and summer interns by visiting college and university campuses. In 2023, 87% of organizations said they would send recruiters to campuses to attract new graduates.

The most popular months for active on-campus recruitment of new graduates include:

• October - 64.2%
• March - 61.6%
• September - 58.3%
• April - 57.0%
• February - 53.0%

Some organizations are also reporting an increase in the number of new graduate hires. In our survey, 21.4% of organizations said they hired more recent graduates, while 51.0% said there was no change.

Strategies for summer interns and co-op students

In addition to new graduates, many businesses use interns and co-op students to expand their workforce and help young people learn new skills on the job.

Typically, co-op students work up to 40 hours a week, while interns work more part-time hours, often only during the summer months. Some university degree programs require students to participate in a co-op or internship program to earn real-world experience in their chosen field before graduating.

If your organization hires co-op students and interns, have you updated your hiring or compensation policies recently?

Co-op students

In our recent survey, 83.3% of organizations reported paying their co-op students monetarily. Another 15.0% offered money and course credits. Only 33.3% of companies said they offered their co-op students employee benefits.

These benefits might include:

• Medical
• 401k contributions
• Paid sick time
• Housing assistance

Interns

While some organizations still have unpaid internships, our survey showed that 92.6% of businesses are paying their interns. Another 5.9% are paying their interns with money and course credits. A unique offering for many internship programs is summer housing assistance — 29.8% of survey respondents said they offered this to their interns.

Take your new hire pay strategy further with data from Mercer

If you are still using hiring strategies that worked for older generations, you might end up striking out with the up-and-coming Generation Z. Your organization must have the right policies to attract this new, young talent.

This primarily starts with competitive new hire pay. To ensure your Generation Z pay is attractive, use the data available in Mercer’s latest US New Graduate and Generation Z Compensation Survey.

To learn more about this and other surveys, call Mercer today at 866-605-1031. You can also connect with us online or email us at surveys@mercer.com.