The Gen Z Effect: 6 in 10 Indian firms hit by 'effort recession'

There was a time when staying back after office hours, answering late-night emails and volunteering for "just one more task" were seen as unmistakable signs of commitment. Across India's corporate landscape, the willingness to go beyond the job description wasn't just appreciated, it was often expected.

That workplace equation is now showing signs of change.

A new Great Place To Work India 2026 study finds that six in 10 Indian companies are experiencing what it calls an "effort recession," a growing reluctance among employees to consistently put in discretionary effort beyond their defined responsibilities.

The numbers reveal the scale of the shift. According to the study, 63% of Indian organisations (240 out of 380 surveyed) reported a decline in discretionary effort between last year and the current year, with the average drop standing at 5%.

At the same time, organisations are grappling with another reality: Gen Z is rapidly reshaping workplace expectations, while artificial intelligence is redefining what productivity and performance look like.

Together, these forces are raising an uncomfortable question for employers: Has India's celebrated 'go the extra mile' work culture begun to fade, or is it simply evolving?

MORE THAN A DECLINE IN EFFORT

The phrase "effort recession" may sound alarming, but workplace experts believe it tells only part of the story.

Employees today are not necessarily less committed. Instead, they are becoming more intentional about where, and why, they invest their energy. Unlike earlier generations, discretionary effort is no longer offered automatically; it is increasingly tied to trust, purpose, recognition and meaningful career growth.

The report defines discretionary effort as the part of work that cannot be mandated, staying late without being asked, stepping in to solve problems outside one's job description, or voluntarily taking ownership beyond assigned responsibilities. It is the difference between simply showing up and truly stepping up.

As Upasana Raina, HR Director, GI Group Holding, puts it, employees across generations are still willing to go above and beyond, but only when they feel their work has purpose, offers opportunities to learn and grow, and their contributions are genuinely valued.

In today's workplace, she says, commitment is no longer assumed; it has to be earned through leadership, learning and recognition.

That shift reflects a broader evolution in the employer-employee relationship, where motivation is increasingly driven by experience rather than obligation.

THE EFFORT RECESSION ISN'T HITTING EVERY INDUSTRY EQUALLY

The decline in discretionary effort varies sharply across sectors, suggesting deeper structural differences rather than a temporary dip in employee motivation.

Retail has been hit the hardest, with 88% of companies reporting falling discretionary effort. IT and Professional Services follow closely at 77% each, while Construction and Real Estate stands at 71%. Financial Services has fared relatively better, with 62% of companies reporting a decline and an average drop of just 4%.

Manufacturing has emerged as the most resilient sector, with only 44% of organisations witnessing a decline and the average fall limited to 3%.

The pattern suggests that industries built around routine, transaction-heavy or high-churn roles are losing discretionary effort faster than sectors where employees develop specialised expertise over longer careers. Manufacturing, for instance, relies on niche technical skills that often foster stronger attachment to both the profession and the organisation, while sectors like retail and IT typically see higher employee mobility and more interchangeable roles.

WHEN 'BUSY' IS NO LONGER A BADGE OF HONOUR

For years, effort was often measured by visibility, who stayed the latest, replied the fastest or took on the most work.

But AI is rapidly dismantling those benchmarks.

Tasks that once demanded days of manual effort can now be completed in minutes with the help of intelligent tools. As automation expands, organisations are beginning to judge employees less by the hours they clock and more by the value they create.

That, experts say, fundamentally changes what "going the extra mile" means.

IS AI MAKING THE EXTRA MILE OBSOLETE?

According to Jaspreet Bindra, Co-founder and CEO, AI & Beyond, the idea of equating effort with long hours belongs to a different era.

"'Go the extra mile' is an idea that belongs to a different time," he says, arguing that if AI can complete in minutes what previously took teams days, organisations must rethink how they define effort.

Rather than witnessing an effort recession, Bindra believes companies are seeing employees question outdated assumptions about productivity. The real differentiators in the AI era, he argues, will be curiosity, creativity, sound judgement and the ability to solve problems that intelligent machines cannot.

GEN Z ISN'T REJECTING WORK, IT'S REJECTING OLD RULES

The report also underscores the growing influence of Gen Z, whose expanding presence in the workforce is reshaping organisational culture.

Gen Z now accounts for 26% of India's workforce, nearly double its share in 2023, with its presence growing at an average annual rate of 16% over the past four years across industries including IT, banking, retail, pharmaceuticals and manufacturing.

Unlike previous generations, younger professionals are less likely to associate commitment with long working hours or constant availability. Instead, they place greater emphasis on flexibility, continuous learning, career progression, meaningful work and mental well-being.

For employers, this represents more than a generational preference, it is forcing a rethink of long-held assumptions about loyalty, performance and engagement.

The transition is proving challenging. According to the report, 58% of CHROs say they are simultaneously navigating AI-led transformation and generational change, while half admit they do not fully understand what motivates their younger employees.

A NEW SOCIAL CONTRACT BETWEEN EMPLOYERS AND EMPLOYEES

Many HR leaders argue that what organisations are experiencing is less a crisis of commitment and more a recalibration of expectations.

"The idea of employees going the extra mile hasn't disappeared. It has simply evolved," says Vimal Dangri, CHRO & General Counsel at Mastek.

He believes employees still want to give their best, but increasingly expect organisations to invest in them through transparent leadership, continuous learning, career development and genuine concern for employee well-being. In that environment, discretionary effort becomes a choice employees willingly make, not an expectation imposed upon them.

The report's findings reinforce that argument. When employees believe their leaders genuinely care about them, discretionary effort reaches 99%. When that sense of care is absent, it plunges to just 29%, a striking 70-point difference, the largest behavioural gap identified in the study.

Leadership that inspires employees also has an outsized impact. Discretionary effort stands at 98% when employees describe their leaders as inspiring, but falls to 32% when they do not. Other behaviours such as listening, celebrating successes and transparent communication also significantly influence effort levels, though to a lesser extent.

Interestingly, traditional leadership priorities such as training, mentoring and employee development showed the smallest gap, around 25 percentage points. While learning opportunities remain important, the findings suggest that care, trust and inspiration matter even more in determining whether employees choose to go beyond their formal responsibilities.

SO, WHAT WILL INSPIRE PEOPLE TO GO THE EXTRA MILE?

The answer may lie less in demanding more from employees and more in giving them stronger reasons to contribute.

As workplaces become increasingly AI-enabled, organisations that foster trust, recognise performance, create opportunities to learn and communicate a clear sense of purpose are likely to outperform those that continue to measure commitment through time spent at a desk.

Balasubramanian A, Senior Vice President, TeamLease Services, believes employees today are simply more discerning about where they invest their effort. They are looking for learning opportunities, career growth, recognition and a supportive work environment before choosing to go beyond their formal responsibilities, a shift that is particularly visible among younger professionals.

THE FUTURE OF WORK MAY NOT BE ABOUT WORKING HARDER

The Great Place To Work India report ultimately points to a workplace in transition rather than one in decline.

The "extra mile" hasn't disappeared. It has become conditional.

Employees are still willing to stretch themselves, but increasingly for organisations that inspire trust, offer meaningful growth and recognise contribution instead of merely rewarding visibility.

For decades, Indian companies asked employees to prove their commitment by putting in more time. The next era of work may demand something very different: proving that the organisation is worth the extra effort.