Purpose Since the post-liberalization era, a noticeable structural change and transition in employment have unfolded within the Indian economy. Hence, the purpose of this paper is to understand employment transition and elucidate the evolving dynamics of rural economies and employment patterns from agriculture to more productive non-agricultural sectors. Additionally, the study investigates the underlying causes of socioeconomic disparities and their repercussions on employment trends. Design/methodology/approach To address the aforementioned issues, this study utilised secondary data from labour surveys conducted by the National Sample Survey Organisation spanning from 2004–05 to 2023. Initially, the study computed the magnitude of employment in both agriculture and non-agriculture sectors. Subsequently, the distribution of non-agricultural labour across various socioeconomic characteristics was estimated. Furthermore, a logistic regression model was employed to evaluate the impact of socioeconomic factors on employment choices. Finally, Fairlie’s decomposition model was applied to elucidate workers’ decisions to engage in non-agricultural sectors. Findings The study reveals a significant rise in rural non-agricultural employment, from 98.4 m in 2004–05 to 193.3 m in 2023, indicating changing job preferences. Notably, the construction and trade sectors emerge as significant drivers of this trend. However, self-employment and casual labour persist, highlighting job vulnerability. Additionally, women and marginalised individuals with low levels of education and socioeconomic status lag behind in non-agricultural employment. Originality/value This study makes a significant contribution by offering a thorough analysis of the employment transition from agriculture to non-agriculture over a span of two decades. It provides valuable insights into the evolving dynamics of employment trends.