Why are governments around the world supporting Generation Z in the era of AI?

Research by Randstad and the Institute of Student Employers (ISE) shows that the supply of entry-level positions is constantly shrinking: between January 2024 and the end of 2025, the number of “entry-level” job advertisements worldwide decreased by 29%. At the same time, competition has become fiercer than ever.

While in 2002, there were an average of around 38 applications for an entry-level job, this number has increased to around 140 by 2025/26. In addition, large companies are also predicting a further decline in entry-level recruitment of around 7% for the 2025/26 cycle.

Why are governments supporting Generation Z?

The challenge is global, and policymakers are responding accordingly. Recognizing the scale of the problem as well as the potential, many countries from Portugal to India are launching programmes to encourage youth employment and training.

In France, the “1 Jeune, 1 Solution” initiative provides up to €4,000 per year to employers who employ workers under 26. In Spain, the Youth Guarantee Plus Plan 2021-2027 provides social security benefits and direct employment subsidies to companies that offer permanent contracts to young people. The UK government recently announced a £1 billion youth employment programme in response to youth unemployment reaching a 10-year high.

While the scale and design of these programmes vary across markets, similar trends and responses can be observed across Central and Eastern Europe. In Hungary, for example, supporting young people to enter the labour market is not achieved through a single comprehensive programme, but through a combination of different, targeted measures. The personal income tax exemption for those under 25 increases net earnings, making it more attractive to start working, while contribution reductions available to employers reduce the costs of employing young people. In parallel, EU-funded programmes such as GINOP Plusz and the Youth Guarantee support the integration of young people into the labour market by providing training opportunities, wage subsidies and job placement pathways. In addition, dual training and apprenticeship programmes are playing an increasingly important role in ensuring that young people gain practical experience before entering the labour market. These incentives serve to help members of Generation Z navigate the ever-changing labour market, while creating opportunities for companies to nurture talent and exploit the skills of digital natives.

The Generation of Change

Regardless of country, the competition in the job market is fiercer than ever, while the very nature of work is also changing. Generation Z is not unmotivated at all – they are building their careers in an extremely complex environment, while simultaneously having to cope with competition, rapid technological change and global uncertainty.

One of the outstanding strengths of Generation Z is their technological literacy: the use of smartphones, fast internet connections and social platforms comes naturally to them. However, this skill alone is not enough in today’s economy. The real competitive factor is the knowledge and active application of artificial intelligence. Those who experiment with AI tools, understand their use and integrate them into their work processes not only enrich the organization with technical capabilities, but also bring a new way of thinking – thereby increasing productivity, innovation and growth. We are already experiencing the practical impact of this. According to new research from IWG, Generation Z is playing a key role in driving AI adoption across the workforce. Nearly two-thirds of younger workers are actively helping their older colleagues learn about and use AI tools – from hands-on training to sharing tips to integrate into their daily work processes. This kind of reverse mentoring is yielding tangible results: it improves collaboration and speeds up productive work. What’s more! It also highlights a broader shift: young workers are not just learning about