The rise of AI and why governments globally are stepping in to support Gen Z in the job market ​

By Mark Dixon, Founder and CEO, International Workplace Group (IWG)

The reality is far more nuanced. Gen Z is hard-working, entrepreneurial, and represents the future of the global workforce and economy. What they are facing is not a lack of motivation - but a fundamentally different and more challenging entry point into work.

Young people today are entering one of the toughest job markets in decades. Research from Randstad and the Institute of Student Employers (ISE) highlights the growing squeeze on early-career roles, with global entry-level job postings falling by 29% between January 2024 and late 2025.

At the same time, competition has reached historic highs. In 2002, a graduate vacancy received roughly 38 applications; by 2025/26, that number has skyrocketed to 140 per vacancy. Large employers also forecast a 7% reduction in graduate hiring for the 2025/26 cycle.

Why governments are backing Gen Z

This challenge is global, and policymakers are responding accordingly. Governments from Portugal to India are introducing schemes to incentivise hiring and training of young people, recognising both the scale of the issue as well as the opportunity.

In France, the "1 Jeune, 1 Solution" initiative provides up to €4,000 per year to employers hiring workers under 26. In Spain, the "Youth Guarantee Plus Plan 2021–2027" continues to offer social security rebates and direct hiring subsidies for companies offering permanent contracts to young people. In the UK, the government recently announced a £1 billion youth employment drive to tackle a 10-year high in youth unemployment.

These incentives are designed to support Gen Z in navigating an evolving job market while giving businesses the opportunity to develop their talent and benefit from their digital native skills

A generation defined by change

Yes, the job market is more competitive than ever no matter where you are, but the very nature of work itself is also shifting. Far from lacking drive, this generation is navigating unprecedented complexity, balancing intense competition, rapid technological change, and global uncertainty while building their careers.

What Gen Z brings is a unique strength: fluency in technology. Smartphones, high-speed connectivity, and social platforms are second nature. But in today’s economy, fluency alone is not enough. The real differentiator is AI literacy: those who actively experiment with AI tools, understand how to apply them, and integrate them into their work bring not just technical capability but new ways of thinking - unlocking productivity, innovation, and growth for the organisations they join.

We are already seeing this play out in practice. Recent research from IWG shows that Gen Z employees are instrumental in driving AI adoption across the workforce. Nearly two-thirds of younger workers are actively helping older colleagues learn and use AI tools - from hands-on coaching to practical tips that embed AI into everyday workflows.

This form of reverse mentoring is delivering tangible results, improving collaboration and accelerating productivity. It also highlights a broader shift: younger employees are not just learning from organisations - they are actively shaping how work gets done.

In the AI era, initiative is the advantage

Of course, developing these capabilities requires initiative. Just as previous generations learned to code in their spare time or pursued additional qualifications, today’s young professionals must take ownership of building AI capability and broader future-ready skills. Increasingly, that learning happens beyond formal education - through online communities, peer networks and hands-on experimentation.

Planning a career in this environment requires a more intentional approach. Young people should be asking: “Where will I gain the best experience?” and “Am I building the skills future employers will value?” For those not yet in work, volunteering can play a critical role, offering a way to build practical experience, develop soft skills and demonstrate initiative in a competitive market.

Supporting talent through upskilling and flexible working

The onus cannot rest solely with individuals. Employers also have a crucial role to play in upskilling their teams and ensuring they have the best tools in the business. Companies that invest in training, mentorship and meaningful development opportunities will unlock enormous potential.

At IWG, we’re seeing this first-hand. We’ve invested in extensive training and development programmes, with hundreds of online courses, because keeping teams at the top of their game is essential in a fast-moving environment.

Employers who offer their teams flexibility with the ability to work in convenient locations closer to home, alongside supportive and innovative environments, will also be better positioned to engage and develop emerging talent, all whilst driving productivity. That’s because flexibility is no longer optional; it is expected. That shift is only accelerating, with 79% of 11–17-year-olds anticipating flexible working to be the norm by 2040. ​ ​

An opportunity businesses can’t miss

Governments around the world are incentivising businesses to hire Gen Z because they recognise the opportunity: younger employees bring skills, entrepreneurialism, and innovation that can transform productivity and competitiveness. Young people are already adapting, by learning new tools, navigating uncertainty, and competing in historically challenging markets.

For businesses, those that invest in this generation will not only unlock extraordinary talent but also secure their own future in a competitive, AI-driven world.

About International Workplace Group PLC

International Workplace Group (IWG) is the world’s leading platform for work enabling companies of all sizes to work more productively and profitably. We create personal, financial, and strategic value for the most exciting companies and well-known organizations on the planet as well as individuals and the next generation of industry leaders. All of them harness the power of IWG’s platform to increase their productivity, efficiency, agility, and market proximity.

International Workplace Group’s unrivalled network coverage includes more than 4,000 locations across 120 countries and 83% of Fortune 500 companies are amongst our growing customer base.

Our brands including Regus, Spaces, HQ and Signature serve millions of people, providing professional, inspiring and collaborative workspaces and all our digital services are available via the IWG app.

For more information

Visit www.iwgplc.com and for more information on partnering with International Workplace Group, see: https://www.iwgplc.com/develop-a-location

[i]Source: Global Workplace Analytics