Companies are becoming more selective in hiring Gen Z as AI reshapes entry-level jobs, skills and workplace expectations across global industries.
JAKARTA – The debate surrounding companies that are becoming more cautious about hiring Generation Z is part of a much larger transformation taking place in the global labour market.
What appears on the surface to be a generational issue is increasingly becoming a question of skills, productivity, technology and corporate strategy. As artificial intelligence reshapes jobs and employers reassess the capabilities required for future growth, young workers are entering a labour market where the traditional path from education to an entry-level position is changing rapidly.
Gen Z is often associated with digital fluency. Having grown up surrounded by smartphones, social media, cloud platforms and increasingly AI-powered tools, this generation can bring valuable technological familiarity into organisations.
But digital familiarity alone is no longer enough.
Companies are increasingly looking for employees who can combine technological capabilities with communication, critical thinking, adaptability, collaboration and problem-solving. The transformation is forcing both employers and young professionals to reconsider what it means to be “work-ready.”
The Entry-Level Job Is Changing
For decades, entry-level positions have functioned as an important bridge between education and professional experience. Young employees entered organisations with limited practical knowledge, learned from more experienced colleagues and gradually assumed greater responsibilities.
Artificial intelligence is now challenging that model.
Tasks traditionally assigned to junior employees—including research, data processing, drafting, basic analysis and administrative work—can increasingly be supported or accelerated by AI.
Deloitte’s 2025 Gen Z and Millennial Survey found that 61% of Gen Z and millennial respondents were concerned that generative AI could make it harder for younger generations to enter the workforce because it may automate tasks traditionally performed by entry-level employees.
The concern is significant because it suggests that the first step into a professional career could become more competitive.
At the same time, AI does not simply eliminate work. It changes the composition of work.
The World Economic Forum’s Future of Jobs Report 2025 identifies technological change as one of the major forces reshaping employment through 2030. In Southeast Asia, employers are particularly focused on upskilling and recruiting people with new capabilities.
This means that the central question for young professionals is increasingly not whether AI will affect their careers, but how effectively they can work alongside it.
The New Premium on Human Skills
As machines become better at processing information and performing repetitive tasks, human capabilities can become more valuable.
Deloitte’s research shows that 86% of Gen Z respondents and 85% of millennials consider soft skills—including communication, leadership, empathy and networking—important for career advancement. This exceeds the proportion who consider GenAI skills essential.
This represents an important shift in corporate talent strategy.
For years, digital transformation encouraged companies to search for increasingly technical employees. Today, technology is becoming so accessible that the competitive advantage may increasingly come from how people use technology rather than simply whether they know how to operate it.
An employee who can use AI but cannot communicate effectively with colleagues may have limited organisational impact.
Conversely, an employee who understands business objectives, communicates clearly and uses AI to accelerate research, analysis or decision-making can potentially deliver significantly greater value.
Gen Z Is Not Simply Rejecting Work
The perception that Gen Z is less committed to work can also obscure a more complicated reality.
Deloitte’s 2025 survey of more than 23,000 Gen Z and millennial respondents across 44 countries found that learning and development remains one of the top reasons Gen Z chooses an employer. Around 70% of Gen Z respondents said they were developing skills to advance their careers at least once a week.
The same research found that 86% of Gen Z respondents valued mentorship and guidance, while 88% highlighted on-the-job learning and practical experience as important for skill development.
These findings challenge the idea that young workers simply want flexibility without responsibility.
Instead, many are looking for an employment relationship that combines professional development, meaningful work and financial security.
The implication for employers is clear: attracting Gen Z may require more than offering a salary and a job description. Companies increasingly need to demonstrate how employees can learn, grow and build relevant skills.
Career Progression Is Being Redefined
Another important shift is taking place in the way younger workers define career success.
The traditional corporate model often assumes that ambitious employees want rapid promotion into management. But Gen Z’s expectations are increasingly diverse.
Deloitte’s 2026 Gen Z and Millennial Survey found that only 25% of Gen Z respondents preferred fast-paced career progression characterised by rapid promotions. Many instead favoured gradual growth or lateral moves that allow them to develop experience and skills supporting longer-term success.
This distinction matters for companies designing career pathways.
A young employee who does not immediately seek a management position should not automatically be interpreted as lacking ambition. Their definition of progress may involve acquiring expertise, moving between functions, developing specialised skills or gaining broader professional experience.
For global employers, understanding this shift could become important for talent retention.
A Global Issue With Regional Differences
Although the Gen Z debate is global, its implications differ from one labour market to another.
In Southeast Asia, for example, employers are confronting rapid digitalisation while also dealing with skills shortages and changing economic conditions.
The World Economic Forum reports that 96% of employers headquartered in Southeast Asia identify workforce upskilling as a key strategy for dealing with labour-market transformation, compared with 85% globally. Meanwhile, 86% plan to hire people with new skills, compared with 70% globally.
These figures demonstrate that Southeast Asian companies are not simply reducing their dependence on young workers.
They are actively looking for new skills.
The challenge is that the definition of those skills is changing faster than traditional education and recruitment systems can always accommodate.
In Indonesia, digitalisation is expected to be a particularly important driver of labour-market transformation. The World Economic Forum reports that 83% of businesses in Indonesia expect digitalisation to affect their organisation by 2030, compared with 60% globally.
This creates an urgent need for closer alignment between universities, vocational institutions, employers and policymakers.
Companies Are Also Being Tested
The discussion about Gen Z often focuses heavily on what young workers need to improve.
However, companies themselves are being tested by the same transformation.
An organisation that expects new graduates to arrive fully prepared for an AI-driven workplace may underestimate its own responsibility to develop talent.
The rapid evolution of technology means that even experienced employees must continuously update their skills.
Deloitte’s 2025 research found that Gen Z respondents were actively investing in skill development, both during and outside working hours. At the same time, many expressed concerns that their managers were not providing sufficient guidance and development support.
This creates a leadership challenge.
If companies want employees to adapt quickly, they must create systems that make adaptation possible.
Mentoring, structured onboarding, practical learning, feedback mechanisms, internal mobility and access to training can become strategic investments rather than merely human-resources programmes.
The Global Competition for Talent
The transformation is also increasing competition between companies and countries.
As digital skills become more portable, professionals can increasingly work across borders or for international organisations without physically relocating.
This means companies are no longer competing solely with employers in the same city.
They may be competing with businesses in other countries that offer stronger career development, better technology, more flexible working arrangements or more attractive compensation.
For multinational companies, the ability to understand Gen Z’s expectations could therefore become part of a broader international talent strategy.
Organisations that fail to adapt may struggle to attract young professionals even when they offer competitive salaries.
Skills-Based Hiring Could Gain Momentum
The changes taking place in the labour market could accelerate the movement toward skills-based hiring.
Instead of relying primarily on academic credentials or years of experience, employers may increasingly evaluate what candidates can actually do.
Portfolio projects, practical experience, communication ability, analytical thinking, AI literacy and problem-solving could become increasingly important indicators.
This does not necessarily make university education less relevant. Rather, it changes the relationship between formal education and employability.
Deloitte found that 28% of Gen Z respondents were concerned that higher education provided limited practical experience, while 24% questioned the relevance of curricula to the labour market.
The message is not that education is failing.
It is that education and employment need to become more closely connected.
The Future Belongs to Adaptable Workers
The controversy surrounding Gen Z recruitment ultimately points to a much broader transition.
The workplace of the future will not be defined simply by age groups. It will be defined by the ability to learn, adapt and create value in an environment where technology continuously changes the nature of work.
Gen Z has several advantages in that environment. Digital familiarity, comfort with rapid technological change and willingness to explore new ways of working can provide a strong foundation.
But those advantages must be combined with professionalism, accountability, communication, resilience and critical thinking.
Employers, meanwhile, must move beyond the expectation of finding perfectly prepared candidates.
The most valuable employees may not always be those who already possess every required skill. They may be those who demonstrate the ability and willingness to acquire new ones.
From Generational Debate to Talent Strategy
The question of whether companies should hire Gen Z is therefore becoming increasingly outdated.
The more relevant question is how companies can identify, develop and retain talent capable of succeeding in an AI-driven economy.
For young professionals, the challenge is equally clear: digital fluency is an advantage, but it is not a complete professional identity.
The future labour market will reward individuals who can combine technology with distinctly human capabilities.
For companies, success will depend on whether they can create environments where those capabilities can grow.
The Gen Z debate may therefore be less about one generation and more about the future of work itself.
As AI, digitalisation and changing employee expectations continue to reshape global industries, the organisations best positioned for the next decade will likely be those that stop treating talent development as a cost and start treating it as a strategic investment.
