December 4, 2023
Modern workplaces are diverse, with four generations of Canadians coming together with unique values and work styles. But regardless of their ages, there’s one issue most employees agree upon: the need for pay equity.
Pay gap awareness has become apparent in the last century, but the struggle to achieve parity is ongoing. Even today, Canadian women only earn $0.89 for every dollar a man makes. While all generations agree that pay equity is important, they have different perspectives and priorities on achieving it.
In this article, we’ll explore some viewpoints on pay equity in today’s multi-generational workplace and how businesses can foster approaches to ensure all employees are valued.
Understanding the Generational Divide
According to the 2021 census, there are 23.9 million working-age Canadians, ranging from 15 to 64 years of age. Most have the same expectations from their jobs—fair compensation, stability, and acknowledgement. However, their views are shaped by social and economic forces during their formative years and early career development.
To set the stage, let’s look at each generation’s workplace attitudes, keeping in mind that each group has diversity.
Baby Boomers (1946-1964)
Baby boomers were born between 1946 and 1964, making up 19.7% of working-age Canadians. While some have retired, many work longer than previous generations because of flexible opportunities, the demand for their skills, and the desire to stay active and independent.
Growing up in a prosperous post-World War II era, this generation values hard work and success. Most baby boomers in the workplace are accustomed to traditional, hierarchic environments. They tend to stay with the same company for long periods, expecting job security, benefits and the chance for career advancement in return.
Generation X (1965-1980)
Gen Xers were born between 1965 and 1980 and comprise 29.5% of working-age Canadians. They saw significant shifts in traditional workplace structures compared to the previous generation. Rapid technological advancement and globalization meant companies faced increased competition, laid off employees and outsourced work. Digital communications changed how work was done inside and outside of the office.
This generation’s identity is less tied to the workplace than boomers. They’re willing to change employers if dissatisfied, although stability is important as they advance their careers and save for retirement.
Millennials were born between 1981 and 1996 and comprise one-third of working-age Canadians. Sometimes called Generation Y, some millennials started their careers during the 2008-2009 recession, which widely impacted job prospects. Their struggles continued as the pandemic took hold in 2020, which made financial security an ongoing challenge.
This generation is questioning traditional workplace norms. They believe they should be valued for what they accomplish and not the hours they’re at a desk. They prefer autonomy and flexibility and may be involved in the gig economy and side hustles.
Generation Z (1997-2012)
Born between 1997 and 2012, Generation Z makes up 17.6% of working-age Canadians. Immersed in digital media from an early age, this generation is drawn to innovative tools and workplace efficiency. They appreciate flexible work arrangements and an opportunity to impact how things are done. Gen Z also sees work as a way to express their identities and want fulfilling employment. A strong sense of social responsibility shapes their views.
Pay Equity Through the Generations
When it comes to pay, there has been generational inequity over the years. In the 1950s and 1960s, many women were employed in low-paying, predominantly female professions because men were considered primary breadwinners. Later, working women who became mothers experienced a loss in earnings known as a “motherhood penalty.”
The gender gap is narrowing, but progress is slow. In 1998, the hourly wage gap between men and women aged 25 to 54 was 18.8%, according to Statistics Canada. By 2018, this had narrowed to 13.3%.
It is important to note that pay equity differs from pay equality. Pay equity, or “equal pay for work of equal value,” is based on the notion that different jobs can provide similar value to a company and should be compensated equally. This differs from “equal pay for equal work,” which refers to equal compensation for people performing the same jobs.
A number of government initiatives have been introduced to help close pay gaps, acknowledging it is a systemic problem. Canada’s Pay Equity Act was introduced in 2018 for federally regulated workplaces. This requires regular pay equity analysis:
- Reviewing job classes.
- Determining if they’re predominantly male or female.
- Assigning value to the work.
- Comparing compensation for gaps.
Many Canadian provinces have also enacted pay equity legislation or formal policy frameworks. In addition, Ontario recently announced legislation requiring employers to specify a salary range in job postings. This is designed to make clear to job seekers what compensation they can expect.
Generational Perspectives on Pay Equity
From baby boomers to Gen Z, Canadians have dealt with different types of generational inequity through the years. The socioeconomic conditions of the times impacted each generation’s experiences and the kinds of issues they tackled.
As civil rights and women’s liberation movements brought equality issues to the forefront, baby boomers began questioning traditional values. Pay gaps were highlighted as more women entered the workforce. Women dominated clerical, administrative, teaching and nursing roles, but the lower pay ranges emphasized disparity. Women in law, business, and medicine earned more but still found pay gaps compared to men. The feminist movement helped build momentum as boomers pushed for equity.
Generation X saw more women moving into executive and management roles, emphasizing the need to compensate employees based on merit and qualifications. However, a new wrinkle came to light: As women paused to have families and care for young children, they put their careers on hold and experienced a drop in earnings that lasted up to 5 years.
Many Gen Xers faced the added burden of caring for elderly parents. The push for flexible work arrangements helped employees better balance their work and personal lives. Companies began providing maternity leave programs to complement the federal government’s expanded maternity and parental leave programs.
Millennials are the most ethnically diverse generation of adults, giving them a keen sense of equality. More than half of the immigrants to Canada between 2016 and 2021 were millennials, according to Statistics Canada.
This generation has benefited from work done by boomers and Gen X. Pew Research reports that millennial women are closer to parity with men at the start of their careers than previous generations. In 2012, the hourly wages of women aged 25 to 34 were 93% compared to that of men. Despite these positive steps, millennials are still tuned in to discrimination of all types in the workplace and often see the need for pay equity as a collective one.
Gen Z is keenly aware of social issues such as #MeToo, Black Lives Matter, poverty, climate change and LGBTQ+ rights. In a recent study by Abacus Data of top issues facing Canada, Gen Z was more likely to cite a social concern than other generations. They believe in collective action, accountability, and inclusivity and have seen the power of social media for sharing stories of injustice and online advocacy.
As this generation enters the workplace, they tend to support diversity and inclusion initiatives and want to remove barriers that impact equity. They’re also more likely to feel empowered to open dialogues and create better work environments. One challenge for businesses with Gen Z is that they may leave for another job when a workplace doesn’t align with their values.
Workplace Initiatives and Policies
While federal and provincial governments are beginning to model pay equity policies, businesses can also address barriers and systemic inequality:
- Declaring equity as part of the company’s core values.
- Performing regular pay audits.
- Supporting job sharing, part-time work and flexible arrangements.
- Providing benefits such as childcare and parental leave benefits.
- Offering training and reskilling to open new career paths.
- Encouraging staff to pool knowledge to create generational equity.
- Providing transparency about compensation and wages.
Disclosing pay data can have a significant impact, with one study showing up to a 45% reduction in the pay gap by organizations that are transparent. However, not all employees are at ease with revealing their salaries. A LinkedIn survey showed that 81% of Gen Z supported the concept of pay transparency. At the other end of the scale, only 28% of baby boomers agreed.
Overcoming Generational Gaps
While each demographic understands the philosophy behind pay equity, they have different comfort levels. Typically, each generation is progressively more accepting of equity policies, although individual attitudes depend on a person’s values, financial status and life stage.
- Baby boomers are often wary of how pay equity impacts traditional hierarchies and workplace structures. They may not be comfortable with what they perceive as disruption as they seek security nearing retirement.
- Generation X, who have invested years of service in the workplace and acquired significant skills and experience, will want reassurances that their contributions and performance continue to be rewarded alongside pay equity initiatives.
- Millennials are likely more open to workplace equity initiatives, including how gender pay gaps intersect with factors such as ethnicity and ability. They appreciate open communication about policies and results.
- Generation Z is likely to support pay equity programs but wants to see it as a meaningful reflection of a company’s values rather than a superficial gesture.
Companies can manage generational gaps through clear communication and genuine engagement. Outline the purpose behind policies so employees understand the reasoning for them, welcome questions and concerns, and provide transparent reporting on progress. Then, gather feedback from employees and work to adjust strategies.
The Future of Pay Equity
Each generation has made its contribution to advancing the pay equity agenda.
- Baby Boomers: As the feminist movement took hold, baby boomers called for women’s equality in society and the workplace. They made initial progress in drawing attention to the issue but are likely now more focused on their financial security and retirement.
- Gen X: These individuals set the stage for flexible workplaces and maternity benefits. Their role in pay equity focuses on work-life balance and support for those raising and caring for families.
- Millennials: This group is actively playing a role in advocating for diversity initiatives alongside pay gap issues. They’re highlighting disparity for people of colour, indigenous people, and those with disabilities.
- Gen Z: Their work is concentrated on influencing overall equality in the workplace. They’re poised to make a significant impact in the coming years because of their willingness to advocate and a strong belief in accountability.
A company’s compensation policies influence how well it attracts and retains talent. Creating pay equity policies in a multi-generational workplace where employees have different views can be challenging. However, pay audits, data analysis, and thoughtful communication can help you navigate this complex landscape. If you need a hand with these initiatives, True North is here to help. Our team recognizes that pay equity helps multiple generations feel valued and respected, creating a workplace synergy that inspires them to perform their best. To learn more about our services, reach out to us.