Gen Z founders are hiring while Boomers' corporate America freezes out—'I've already proven to myself that I can thrive in this'

By Muskaan Arshad
October 16, 2026, 3:02 AM ET

The current job market, characterized by low hiring and low turnover, presents significant challenges for Gen Z as they seek to enter the workforce. Despite these hurdles, a number of young individuals have chosen to forge their own paths by establishing small businesses and startups. This trend has led to an increase in hiring among young founders, contrasting sharply with a slowdown in hiring among established companies across various industries.

Recent findings from the Q3 2026 Small Business Index, compiled by Justworks and the U.S. Chamber of Commerce, indicate that 46% of Gen Z and millennial business owners intend to expand their workforce in the coming year, a stark comparison to the mere 19% of baby boomer business owners who plan to do the same.

Mike Seckler, CEO of Justworks, attributes this divergence in hiring plans to the heightened confidence young entrepreneurs exhibit regarding their businesses, even amidst a generally cautious economic climate.

"Young entrepreneurs, like Gen Z and millennial entrepreneurs, are much more bullish about how their businesses look. They possess greater confidence in hiring right now than their older counterparts," Seckler remarked in a discussion with Fortune.

In addition to hiring intentions, young business owners exhibit a propensity to invest more in their operations. Fifty percent of them plan to increase their investment, compared to just 18% of boomer owners. Furthermore, 71% of these younger entrepreneurs anticipate revenue growth, significantly outpacing the 51% expectation among their older peers. This optimism is notable against an overarching trend of hesitance within the small business landscape: only 36% of all small business owners expect to add staff, a decline from 44% during the same period the previous year.

A job market that's shutting out new entrants

The wider labor market, however, presents a grimmer picture. Former Fed Chair Jerome Powell, who remains on the Federal Reserve's Board of Governors, described it as a "low-hire, low-fire" market—where employers are neither laying off substantial numbers of workers nor significantly expanding their hiring. This stagnation hinders opportunities for those seeking to transition industries or enter the job market for the first time. Research from the Federal Reserve Bank of St. Louis confirms that young adults are especially affected. Economists have cautioned that the labor market risks shifting towards a "low-hire, more-fire" scenario.

According to the Bureau of Labor Statistics, only 1.9% of nonfarm workers resigned from their positions in August, matching the lowest quit rate recorded since 2020. The September jobs report revealed that employers added a mere 29,000 jobs, falling far short of economists' forecasts, while the unemployment rate climbed to 4.2%.

Contributing to this conservative approach to hiring are various factors, including inflation driven by international conflicts and U.S. tariff policies, as well as the increasing automation of tasks typically associated with entry-level positions. A recent survey conducted by the Graduate Management Admission Council found that approximately one in three employers are substituting entry-level roles with artificial intelligence.

Why young founders aren't flinching

Seckler posits that the current tumultuous business environment, which is prompting significant changes in traditional industry practices, has not deterred younger business owners. He identifies a "decoupling" of young entrepreneurs' confidence from the prevailing economic climate, which has remained challenging throughout their formative years.

"I think it's important to remember the context in which these individuals grew up and the circumstances they’ve navigated over the past five years," Seckler asserts. "Given their experiences or observations, they've developed a mindset that the outside world has always been unpredictable and will likely continue to be so. They have already proven to themselves that they can succeed in this environment."

Seckler further emphasizes that young founders are adept at utilizing the digital technologies they grew up with, enabling them to scale their businesses more rapidly than traditional institutions that must adapt established processes to new innovations.

"I believe a part of this success stems from the fact that Gen Z and millennial founders have come of age with a diverse array of tools for building their companies, which allows them to achieve significant outcomes even with smaller teams," Seckler explains.

Gen Z redefines the road to success

Members of Gen Z possess a distinct perception of risk, influencing how they manage their enterprises and their decisions to pursue such pathways. While many Gen Z individuals encounter difficulties in ascending the corporate ladder, there is a growing sentiment among them that entrepreneurship—traditionally viewed as a high-risk choice—may be a more stable alternative.

Seckler observes a decline in trust among younger generations toward institutions and established companies. They have come to realize that diligence does not always yield favorable outcomes. Consequently, the prospect of cultivating their own enterprises appears to be a more attractive option.

Among recent and imminent college graduates surveyed for ZipRecruiter's 2026 Graduate Report, nearly 38% are contemplating the idea of founding their own businesses.

"The traditional model was to graduate, secure an entry-level position, and progress from there," explained Nicole Bachaud, a labor economist at ZipRecruiter. "What we are witnessing now is a more fragmented approach, but the resulting outcomes are improving."

"Graduates are gaining experience through internships, side projects, transitional roles, and even launching their own ventures," she added.