Think Gen Z Is shunning formal jobs? 59% of new EPFO subscribers in FY25 were 18–25

Gen Z has acquired something of a reputation for being difficult to pin down at work. They are said to value flexibility over fixed schedules, purpose over paycheques and frequent moves over long-term careers. The stereotype is of a generation reluctant to settle into traditional employment.

India’s workforce data is telling a more complicated story.

Young workers are emerging as a major force behind the country’s formal economy, with those aged 18–25 accounting for nearly 59% of all new EPFO subscribers in FY25, according to Quess Corp’s Pulse FY26: Shaping India’s Workforce Future, Employment Insights and Quess Corp’s Impact.

The shift is even more visible in new Universal Account Numbers (UANs). Of the 57,000-plus new UANs generated during FY26, 79% belonged to workers aged 18–30. Those aged 21–25 alone accounted for more than 35% of new UANs, making them the single largest cohort entering formal employment.

From hiring to employability

With young workers becoming a larger part of the organised workforce, companies are investing more in apprenticeships, technology-enabled hiring and job-ready skills to bridge the gap between education and work.

Nearly 64,000 apprenticeship contracts were facilitated under the National Apprenticeship Promotion Scheme (NAPS), with the automotive sector accounting for more than 51%.

“The scale at which young people are entering India's formal workforce marks a defining shift for both employers and the economy,” says Lohit Bhatia, Executive Director and Group CEO, Quess Corp.

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“As this new generation enters the world of work, the focus must move beyond hiring to building employability,” he adds.

That matters because the transition from education to employment remains uneven. Youth NEET (Not in Employment, Education or Training) levels stood at 24.8% in 2025, highlighting the continuing gap between education and employment.

Beyond Metros, more educated and still uneven

The geography of formal employment is changing too.

Nearly 69% of the workforce is deployed across Tier 2 and Tier 3 cities, pointing to the growing importance of emerging economic centres in India's organised employment landscape.

The workforce entering formal employment is becoming more educated too. Quess finds that 96% have completed at least Class 10, 61% have completed Class 12 or above, and 30% hold graduate or postgraduate qualifications.

The formalisation story, however, is not equally distributed.

Women accounted for nearly 28% of new UANs generated during FY26, while they received 26% of apprenticeship contracts.

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The new question for employers

The bigger takeaway is that the debate around Gen Z and work needs reframing. This is not a generation rejecting formal employment, but one entering it with different expectations around flexibility, growth and learning.

For employers, the challenge is to turn first jobs into sustainable careers. As Bhatia puts it, “Apprenticeships are emerging as one of the most effective pathways into formal employment, giving young people the opportunity to gain industry-relevant skills, practical workplace experience and the confidence to build long-term careers.”