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Nearly 63 per cent of Indian organisations surveyed said employees are no longer willing to contribute additional effort beyond their formal job responsibilities, a shift that could impact innovation, customer service and long-term business growth.
The findings were revealed in two major workplace culture studies, India’s Best Companies To Work For 2026 and India’s Great Mid-size Workplaces 2026. Together, the studies analysed responses from more than 5.7 million employees across over 20 industries, making them among the most extensive assessments of workplace experiences in India.
The reports indicate that discretionary effort has declined by 4 per cent since 2023, showing that the trend has become increasingly visible in recent years.
The term “effort recession” refers to a decline in employees’ willingness to extend themselves beyond expected duties. While employees continue to complete assigned tasks, fewer are taking additional responsibilities, addressing challenges outside their roles or working extra hours out of personal commitment to organisational success.
The report highlights that this change does not necessarily indicate deteriorating workplace conditions. Employee experiences have improved in several areas, including workplace benefits and overall environment. However, these improvements have not resulted in stronger commitment.
“Work is becoming a better place to be, but not necessarily a stronger reason to strive,” the report stated.
Gen Z Reshaping Workplace Expectations
The growing presence of Generation Z employees is emerging as one of the key factors behind the changing workplace environment.
Since 2023, the proportion of Generation Z employees in India’s workforce has doubled from 13 per cent to 26 per cent. Their increasing presence has been recorded across multiple sectors, including information technology, banking, manufacturing, pharmaceuticals, healthcare, retail, construction and professional services.
The research suggests that younger employees are entering workplaces with different priorities. Flexibility, meaningful work, transparent career growth and organisational purpose are gaining importance over traditional expectations such as long-term job stability.
This shift has created challenges for employers. Nearly one in two Chief Human Resources Officers admitted that they still do not have a clear understanding of what motivates younger employees.
More than 58 per cent of Chief Human Resources Officers said they are managing two major workplace transformations simultaneously — adapting to the rise of Generation Z employees and preparing for the impact of artificial intelligence on their organisations.
The report also found that companies with a higher share of Generation Z employees often record weaker perceptions regarding work-life balance, long-term retention and workplace purpose unless leadership actively responds to these changing expectations.
Artificial Intelligence Increasing Workplace Pressure
The changing employee mindset comes at a difficult time for organisations as companies accelerate the adoption of artificial intelligence across their operations.
According to the study, two out of five Chief Human Resources Officers identified uneven artificial intelligence adoption across teams and functions as their biggest challenge.
At the same time, only around one in four organisations measure artificial intelligence success through business outcomes such as revenue growth or customer impact.
The report noted that many companies are investing in artificial intelligence without having clear methods to evaluate whether the technology is delivering measurable results.
It also warned that artificial intelligence could unintentionally create new workplace pressures. While faster tools can improve efficiency, they may also lead to increased workloads, shorter deadlines and higher expectations, causing employees to feel that technology is adding pressure rather than reducing it.
Leadership Emerges as Key Factor in Employee Commitment
The research suggests that stronger leadership, rather than additional workplace benefits or stricter performance expectations, is central to rebuilding employee engagement.
Organisations with high levels of employee trust in leadership reported significantly better outcomes. According to the study, high-trust workplaces recorded a 47 per cent increase in productivity, 56 per cent improvement in agility, 34 per cent rise in innovation and 52 per cent improvement in customer appreciation compared with organisations where trust levels were lower.
The study further found that companies with the strongest scores in caring and inspiring leadership performed better across important areas, including employee retention, recruitment, customer service, adaptability and discretionary effort.
Balbir Singh, Chief Executive Officer of Great Place To Work India, said the findings demonstrate that employees increasingly expect leaders who care, listen and inspire.
He stated that organisations consistently demonstrating these leadership qualities build stronger trust, adaptability, productivity and retention, adding that workplace culture has become a strategic business advantage rather than merely a human resources measure.
Technology, Real Estate and Professional Services Face Greater Impact
The decline in discretionary effort has not affected all sectors equally.
The report found that the trend is most visible in information technology, professional services, and construction, infrastructure and real estate sectors.
Manufacturing has shown greater resilience and has largely maintained employees’ willingness to contribute beyond their assigned responsibilities.
The study concludes that Indian organisations are facing a new leadership challenge. For years, companies focused on improving employee productivity, but while technology can enhance efficiency, it cannot create genuine commitment.
As artificial intelligence automates more routine activities, the strongest competitive advantage may come from employees who are motivated to contribute beyond minimum expectations.
According to the researchers, rebuilding that willingness will depend less on technological advancement and more on whether leaders can make work meaningful and inspire employees to contribute with greater purpose.
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