The Analysis of Direct Financial Compensation and Indirect Financial Compensation on the Interest in Applying Job of Blitar’s Gen Z through Non-Financial Compensation as Moderating Variable

Abstract

This study investigates the impact of direct financial compensation (DFC) and indirect financial compensation (IFC) on the job application interest (IAJ) of Generation Z in Blitar, Indonesia, with non-financial compensation (NFC) serving as a moderating variable. Utilizing a quantitative approach, the research employed Covariance-Based Structural Equation Modeling (CB-SEM) via SmartPLS 3 to analyze data from 218 respondents. The findings indicate that DFC significantly influences IAJ (T = 2.837, P = 0.005), highlighting the importance of competitive salaries in attracting young talent. Conversely, IFC did not demonstrate a significant effect on IAJ (T = 0.514, P = 0.607). Notably, NFC was found to have a highly significant impact on IAJ (T = 7.200, P = 0.000), suggesting that workplace culture and flexibility are critical considerations for Generation Z. However, NFC did not significantly moderate the relationship between DFC, IFC, and IAJ. These results emphasize the need for organizations to balance financial and non-financial compensation strategies to effectively engage and retain Generation Z employees. The study contributes to the understanding of generational differences in workplace preferences and offers practical implications for employers aiming to attract this emerging workforce