Gen Z Dominates India’s Formal Workforce: 59% New EPFO Subscribers

Despite stereotypes about their job preferences, Gen Z is actively reshaping India’s formal workforce, with young individuals making up a significant portion of new employees.

New data from Quess Corp’s Pulse FY26 report reveals a different story from the common perception of Gen Z avoiding traditional employment. This generation is, in fact, driving the formal economy, challenging employers to adapt their hiring and development strategies.

Key Workforce Numbers

• Nearly 59% of new Employees’ Provident Fund Organisation (EPFO) subscribers in FY25 were aged 18-25.
• Over 57,000 new Universal Account Numbers (UANs) in FY26 saw 79% issued to individuals aged 18-30.
• The 21-25 age group formed the largest UAN cohort, accounting for over 35%.

Companies are responding to this trend by investing in programs designed to bridge the gap between education and employment. These initiatives include apprenticeships, technology-driven hiring solutions, and focused skill development.

The National Apprenticeship Promotion Scheme (NAPS) has been particularly active, facilitating approximately 64,000 apprenticeship contracts. More than half of these contracts were specifically within the automotive sector.

Lohit Bhatia, Executive Director and Group CEO of Quess Corp, emphasized a crucial shift. He noted the need for companies to move beyond simply hiring and instead focus on building genuine employability for this emerging generation.

However, the transition from education to employment still presents hurdles for many young people. Youth Not in Employment, Education, or Training (NEET) levels stood at 24.8% in 2025.

Evolving Employment Landscape

• Nearly 69% of the formal workforce now operates from Tier 2 and Tier 3 cities, underscoring their growing economic significance.
• The workforce is increasingly educated: 96% have completed at least Class 10, 61% Class 12 or higher, and 30% hold graduate or postgraduate degrees.

Formalization, however, shows uneven distribution across demographics. Women accounted for only about 28% of new UANs and 26% of apprenticeship contracts in FY26.

The notion of Gen Z shunning formal jobs requires re-evaluation; they are entering the workforce with distinct expectations for flexibility, growth, and continuous learning. Employers face the challenge of transforming initial roles into sustainable careers, with apprenticeships emerging as a highly effective method for young people to gain essential skills, practical experience, and career confidence.