New data challenges the popular notion that Gen Z shies away from traditional employment, revealing a powerful surge of young workers into India's formal economy. According to a report by Quess Corp, nearly 59% of all new subscribers to the Employees' Provident Fund Organisation (EPFO) in the fiscal year 2025 were individuals aged 18 to 25.
Young Workforce Dominates New Entrants
The report, titled 'Pulse FY26: Shaping India’s Workforce Future,' indicates that this demographic is not just participating but leading the growth in organised employment. The shift is even more pronounced when examining new Universal Account Numbers (UANs) generated in FY26, with 79% belonging to workers aged 18–30. Specifically, those aged 21–25 constituted over 35% of these new UANs, making them the largest single cohort entering formal employment.
This influx of young talent is prompting companies to rethink their hiring and talent development strategies. Employers are increasingly investing in apprenticeships, leveraging technology for recruitment, and focusing on job-ready skills to bridge the gap between academic education and workplace demands.
Apprenticeships and Employability in Focus
Lohit Bhatia, Executive Director and Group CEO of Quess Corp, emphasized the transformative impact of this trend. "The scale at which young people are entering India's formal workforce marks a defining shift for both employers and the economy," Bhatia stated. He added that the focus must expand beyond mere hiring to actively building employability.
Apprenticeship programs are proving particularly effective. Nearly 64,000 apprenticeship contracts were facilitated under the National Apprenticeship Promotion Scheme (NAPS), with a significant portion (over 51%) concentrated in the automotive sector. These programs provide crucial industry-relevant skills and practical experience, aiding the transition into sustainable careers.
Changing Geography and Education Levels
The formal employment landscape is also broadening geographically. Approximately 69% of the organised workforce is now deployed across Tier 2 and Tier 3 cities, underscoring the growing economic importance of these emerging urban centers. Furthermore, the new wave of formal employees is increasingly educated: 96% have completed at least Class 10, 61% have finished Class 12 or higher, and 30% hold graduate or postgraduate qualifications.
While the formalization trend is robust, it is not uniformly distributed. Women accounted for nearly 28% of new UANs generated during FY26 and received 26% of apprenticeship contracts, indicating room for further improvement in gender parity within the formal workforce.
Reframing the Gen Z Narrative
Ultimately, the data suggests that the narrative around Gen Z and work needs a significant reframing. This generation is not rejecting formal employment but entering it with distinct expectations regarding flexibility, personal growth, and continuous learning. For employers, the challenge lies in converting these initial formal jobs into long-term, fulfilling careers that align with Gen Z's evolving values.