Hiring new graduates has always required employers to stay in tune with shifting expectations.

Today’s environment demands an even closer examination. Gen Z, now entering the workforce in high numbers, has experienced rapid changes in technology, education, and work norms. These shifts influence not only what they expect from employers, but also what they value enough to accept or reject a job offer.

To help employers understand precisely where the market stands, the 2025 Canada New Graduate and Generation Z Compensation Survey provides one of the clearest data sets available. Compiled from more than 100 organizations nationwide, it offers insights into new grad salary benchmarks, Gen Z starting salary ranges, preferred workplace perks, hiring trends, and more.

A new landscape for Gen Z talent

Gen Z has come of age during a time of disruption: remote schooling years, a volatile job market, and rising living costs. These experiences shape what they prioritize when evaluating employers.

Conventional hiring strategies, such as rigid salary structures, outdated perks, and limited flexibility, are increasingly out of line with what this generation wants. Survey participants report hiring new graduates across every region in Canada, with high activity in Ontario, British Columbia, and the Prairies. Yet, attracting them is becoming increasingly competitive, with only 12.7% of organizations hiring more new graduates in the past year and 18.3% hiring fewer.

While demand for young talent has stabilized compared to previous years, the competition for top Gen Z candidates remains strong. The question is no longer whether employers need to adjust, but how quickly.

What the 2025 Gen Z salary survey reveals about pay expectations

The 2025 Canada Gen Z salary survey offers a comprehensive overview of starting compensation across various degrees, disciplines, and locations. In some areas, salaries have remained steady or grown modestly; in others, increases reflect demand for specific technical skills.

Averages based on degree include:

• Bachelor of Science: Average $68,990; median $65,000
• Bachelor of Arts: Average $70,060; median $70,000
• Bachelor of Engineering: Average $75,086; median $72,000
• Bachelor of Business Administration: Average $65,935; median $67,500  

These figures provide employers with a clearer understanding of the starting salary benchmarks necessary to remain competitive for the Gen Z workforce.

Beyond degree type, location still plays a role for some disciplines. For instance, Bachelor of Science graduates in Ontario have a median starting salary of $75,000, which is higher than the national median.

Bonuses are still a key part of the new grad salary

Salary isn’t the only financial component shaping employer competitiveness. Bonuses continue to be an essential tool, potentially minimizing turnover, especially when base pay budgets remain tight.

Survey data shows that 75% of employers make new graduates eligible for annual bonuses. Of those, an overwhelming 72.1% pay a bonus to more than 75% of new hires. When performance bonuses are a factor, they are offered to new graduates at levels similar to those offered to the rest of the workforce.

Sign-on bonuses also remain in use. Around 22% of organizations offered them this past year, primarily to compete with other offers or secure in-demand skills. While not universal, they can be a critical differentiator in a tight hiring market.

Gen Z wants more than a paycheck

Compensation may be the baseline, but it’s not the whole picture. This generation evaluates employers based on factors such as work style, communication, culture, and access to meaningful support.

The 2025 Canada Gen Z salary survey offers a breakdown of perks that Gen Z employees value the most across categories:

• Culture: Competitive pay remains the top priority, followed by professional development and challenging work.
• Comfort: Paid fitness memberships, standing desks, and free food top the list of desires.
• Personal: Flexibility with location and schedule is the most critical factor. Many value a relaxed dress code and more traditional benefits such as tuition reimbursement or parental leave.
• Amenity: : On-site fitness facilities, travel discounts, paid parking, tech discounts, and local business discounts continue to matter.

Organizations are taking note. Many are considering adding perks such as additional vacation days, remote work opportunities, student loan repayment, and birthday rewards to meet expectations.

Communication matters more than employers realize

Only 10.7% of organizations have changed communication methods to better connect with Gen Z employees. Yet many of the successful adjustments, such as adopting Slack, mobile apps, video communication, or improved branding, align directly with how Gen Z interacts daily. This gap represents an opportunity: employers who are willing to modernize their communication quickly stand out.

Flexibility has become a deal-breaker

If one theme dominates the findings, it’s flexibility. Hybrid work is now a default expectation, not a perk. Survey data indicates that 82.9% of employers will allow new graduates to work on-site part-time, with the remaining time working from home. While full remote may not be feasible for every organization, flexibility consistently ranks as a core determinant in whether Gen Z accepts or leaves a role.

Pay transparency is still a work in progress

Pay transparency is becoming increasingly important to Gen Z job seekers, but many employers have yet to catch up. According to the survey, 58.1% of employers do not provide pay transparency to new graduate hires. With several provinces enacting or exploring pay transparency legislation, adopting a proactive approach in this area can help employers appeal to a values-driven generation.

Co-ops and internships: a critical part of talent pipelines

Many surveyed organizations continue to engage students before graduation. Around 12.9% of organizations reported hiring more co-op students, while 21.1% hired more summer interns. This early pipeline offers students hands-on experience while enabling employers to train and evaluate potential future hires.

Compensation for co-op roles remains well-structured, with average hourly wages for students ranging from $18.51 to $23.16 per hour, depending on experience and degree level.

What this means for employers competing for Gen Z talent

Across the survey findings, one theme is clear: Gen Z wants a work experience that is fair, flexible, transparent, and growth-oriented.

Organizations that succeed with this generation recognize the importance of:

• Competitive new grad salary ranges aligned with the market
• Clear, transparent pay practices
• Flexibility as a core part of work design
• Real development opportunities
• Modern communication
• Perks that improve daily work life, not just benefits packages

What worked for previous generations is no longer enough. Gen Z evaluates employers with more information, more options, and a higher baseline for what “good” looks like.

Use data to strengthen your talent strategy

The Canadian job market is evolving, and today’s new graduates are entering with strong expectations. To attract and retain them, employers need to align compensation, culture, and communication with what Gen Z values most. The 2025 Canada New Graduate and Generation Z Compensation Survey provides the data necessary to make informed decisions, rather than relying on guesses.

Explore the latest survey results and discover more about what the incoming workforce desires.

About the author

Rebecca Hall, Principal

Rebecca spent much of her career working in compensation in various corporate roles then transitioning to consulting with Mercer. Her current role, as the Content Leader for imercer.com, allows her to leverage her knowledge of human resources and talent strategy to create materials supporting Mercer’s Products & Services in North America.