Gen Z Drives India's Formal Workforce: 79% of New UANs Linked to Young Workers in FY26

India’s workforce is undergoing a significant generational transformation, with young employees emerging as a major force behind the expansion of formal employment. According to Employees’ Provident Fund Organisation (EPFO) enrolment data cited in Quess Corp’s latest workforce report, 79% of new Universal Account Numbers (UANs) generated during FY26 belonged to workers aged 18 to 30

.

The findings, published in Quess Corp’s Pulse FY2026: Shaping India’s Workforce Future report, highlight the growing participation of Gen Z in India’s organised workforce. The trend also points to a changing employment landscape, where younger workers are increasingly entering formal jobs through sectors such as retail, e-commerce, logistics, services and staffing.

Gen Z Becomes a Major Driver of Formal Employment

The report analysed information from several sources, including EPFO enrolment records, the Periodic Labour Force Survey (PLFS), industry data, publicly available datasets, macroeconomic indicators and workforce research.

More than 57,000 new UANs were generated during FY26

, with employees between 18 and 30 years accounting for around 79% of the total.

Workers aged 21 to 25 years made up more than 35% of new UAN registrations, making this age group the largest individual cohort entering India’s formal employment system.

The trend was also visible in FY25. Among new EPFO subscribers during that financial year, 59% were between 18 and 25 years old

. According to the report, the year-on-year increase of around 20% reflects the expanding contribution of young workers to India’s formal economy.

Retail, E-Commerce and Logistics Offer Major Entry Points

Several industries are playing an important role in bringing first-time workers into formal employment.

The Quess report identifies retail, e-commerce, logistics, services and staffing

among the sectors that continue to serve as important entry points for young people beginning their careers.

As more students and young adults transition from education into employment, companies are increasingly focusing on ways to make this transition smoother. These efforts include apprenticeships, job-ready training, employability programmes and technology-driven recruitment

.

Apprenticeships Gain Importance for Young Workers

Apprenticeships are becoming an increasingly important pathway for young Indians seeking their first formal work experience.

Nearly 64,000 apprenticeship contracts were facilitated under the National Apprenticeship Promotion Scheme (NAPS), according to the report.

The automotive industry accounted for more than 51% of all NAPS apprenticeship contracts

, making it the largest contributor among the sectors covered.

The growing use of apprenticeships reflects a broader shift in how companies are preparing younger employees for the workplace. Rather than focusing solely on recruitment, employers are increasingly investing in practical training and industry-specific skills.

Women Account for Nearly 28% of New UANs

The data also provides insight into women’s participation in India’s formal workforce.

Women accounted for nearly 28% of the new UANs generated during FY26

. They also received approximately 26% of apprenticeship contracts under the programme.

While the participation gap remains, the figures indicate that women are becoming an increasingly important part of the country’s organised employment ecosystem.

Tier-II and Tier-III Cities Become Key Employment Centres

India’s formal workforce is also expanding beyond the country’s largest metropolitan areas.

According to the report, nearly 69% of the workforce is deployed across Tier-II and Tier-III cities

. This highlights the growing importance of emerging economic centres in creating organised employment opportunities.

The trend suggests that formal job creation is increasingly spreading into smaller cities, giving companies access to a wider talent pool while creating new career opportunities for workers outside major urban centres.

India’s Organised Workforce Is Becoming More Educated

The education profile of India’s organised workforce is changing as well.

The Quess report found that 96% of workers had completed at least Class 10

, while 61% had completed Class 12 or higher.

Around 30% of the workforce held graduate or postgraduate qualifications.

The figures indicate that educational attainment, digital capabilities and employability skills are becoming increasingly important factors influencing hiring requirements across industries.

As technology becomes more deeply integrated into workplaces, employers are placing greater emphasis on workers who can combine formal education with practical, job-specific and digital skills.

‘Focus Must Move Beyond Hiring to Building Employability’

Lohit Bhatia, Executive Director and Group CEO of Quess Corp, said the growing number of young people entering formal employment represents an important change for both businesses and the wider Indian economy.

He emphasised that employers need to look beyond simply filling vacancies and instead focus on developing workers’ long-term employability.

According to Bhatia, apprenticeships can provide young people with industry-relevant skills, hands-on workplace exposure and the confidence required to build sustainable careers.

For businesses, this approach can also help create a pipeline of future-ready employees by developing talent from the beginning of their careers.

EPF Membership: What Employees Need to Know

The EPFO states that an employee becomes eligible for EPF membership when the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

applies to the organisation where they work.

Employees cannot independently register for EPF membership. Instead, membership is linked to employment with an establishment covered by the EPF law.

There is no age limit for becoming an EPF member. However, an employee who has already reached the age of 58 cannot become a member of the pension fund.

For employees whose basic wages plus dearness allowance (DA) are up to ₹15,000 per month

, EPF membership is applicable, subject to the relevant rules. Employees can continue as EPF subscribers even if their salary later rises above ₹15,000, although contributions are generally restricted to the statutory wage ceiling.

Employees earning more than ₹15,000 per month may also opt for EPF membership under Para 26(6) of the EPF Scheme, subject to the applicable conditions. The required option must be submitted to the EPFO office within six months of joining.

What the FY26 Workforce Data Means for India

The latest workforce figures point to a broader transformation in India’s employment market. Gen Z is becoming a major source of new formal workers

, while smaller cities, apprenticeships and skill-based hiring are gaining greater importance.

The combination of rising educational qualifications, digital readiness and increased demand for practical workplace skills could reshape how companies recruit and develop talent in the coming years.

For young workers, the expansion of formal employment creates more opportunities to enter organised sectors, gain workplace experience and build long-term careers. For employers, the challenge will increasingly be to turn this large pool of young talent into a skilled and future-ready workforce.