The great graduate job drought
Economic uncertainty and the arrival of AI have brought a reduction in entry-level roles, with potentially disastrous consequences for young people
Anjli Raval in London
© FT montage/DreamstimeWhen 22-year-old Emily Chong graduated from University College London last year, she thought the job hunt would be simple.
She had a first-class degree in history and a place on the dean’s list, an academic honour awarded to the top 5 per cent of a graduating class.
“I was more confident than my peers,” she says.
Since August she estimates she has applied for more than 100 positions across public relations, advertising and communications with no success.
“For most of our lives we have been told that working hard and getting good grades will get us to where we want to be,” says Chong.
“I realise this isn’t the case.”
Chong’s experience will feel familiar to many new graduates whose prospects are blighted by the harsh reality of today’s jobs market, where global hiring remains 20 per cent below pre-pandemic levels, job switching is at a 10-year low and AI is disrupting how we work, according to a LinkedIn report.
In the UK, employers facing cost pressures and economic uncertainty are holding back recruiting or outsourcing jobs traditionally done by juniors.
In a poll by the Institute of Student Employers, hiring was reduced by 8 per cent in the last academic year and there were 140 applications for each vacancy among those surveyed for a second consecutive year, up from 86 per vacancy in 2022-23.
Those that are hiring are able to choose from more experienced candidates.
There is a similar picture in the US, where unemployment among new degree-holders is rising faster than the broader population.
New York Federal Reserve data for last August shows that for recent college graduates aged 22-27 it stands at 5.8 per cent versus 4.1 per cent for all workers.
Chong’s experience speaks to the fierce competition.
After a recent rejection at one large company, she was told she was battling it out against 3,300 applicants for early-career roles.
Executives increasingly argue that AI can absorb much of the workload once assigned to early-career staff or to office-based roles such as marketing and communications — where Chong is looking for a job — and customer service.
Last week London mayor Sadiq Khan said the capital will be “at the sharpest edge” of changes wrought by AI given so many white-collar jobs are based in the city.
Entry-level jobs will be the first to go, he said.
For the biggest US companies, the average share of entry-level workers across job functions is also flatlining or shrinking, data from the LinkedIn report shows.
Since the post-pandemic hiring boom, from 2023 to 2025, the legal, property and accounting sectors experienced the steepest declines, while previously growing areas such as consulting and human resources reversed course.
Not all sectors are such a scrabble.
In the UK there is demand for graduate-level workers in civil engineering, construction and social care, among others, according to Skills England.
These so-called priority sector jobs together are forecast to grow by 15 per cent by 2030.
The reality also is that those without a degree are having an even more difficult time.
Yet the squeeze on graduates is very real.
For many, the social contract feels broken: a traditional academic route no longer guarantees passage into a graduate-level job.
Social media platforms from TikTok and Reddit to Instagram are packed with posts of desperate young people’s traumatic job searches.
It’s a big factor in why demographic data shows young people are delaying life milestones; buying homes and having children feels like a stretch for many.
There are implications that go beyond individuals, experts say.
Tara Cemlyn-Jones, a former banker who founded the 25xTalent initiative, a non-profit that helps organisations improve succession and recruitment, says that a shrinking of the graduate workforce has widespread consequences for businesses in the long term.
“A failure to recruit from a digital native generation will have a negative impact on skills and awareness across an organisation as a whole,” says Cemlyn-Jones.
Without new young people coming through, companies will struggle to “refresh the pipeline”, she adds.
In a relatively short span of time the process of applying for a job has transformed from an exercise in self-promotion and hope to one of grim endurance.
The first hurdle is the application itself, which for larger companies is now typically parsed by AI systems in the initial stages.
Candidates find themselves tailoring CVs to algorithms trained to detect key words.
University careers services departments — such as at King’s College London — are offering students AI tools that give personalised recommendations on how to tailor CVs and cover letters so that first-time jobseekers can game the bots reading them.
One graduate says that even though she focuses most of her time on making her applications “more scannable”, her most polished submissions often disappear into the digital void.
Like many applicants she is frequently “ghosted”, not hearing anything back at all.
Rejections are often delivered by automated emails.
Part of this is because companies are inundated with applications, many times written and aided by AI itself, says Stephanie Morris, the head of talent acquisition at accountancy firm Cooper Parry.
It means employers are less able to gauge who is a serious candidate until later in the process.
Morris says there was a 28 per cent year-on-year increase in applications to her business in 2025; from August to December alone, the company reviewed 3,900 video interviews.
This resulted in temporary closures of the application process “to manage assessment bottlenecks”, says Morris.
“[It] feels unfair, but we have no option due to such high volumes.”
Graduates say internships are replacing entry-level positions in many cases so companies can trial-run employees at a fraction of the cost.
Many have also complained about phantom job ads on recruitment websites, where organisations publish listings even though they do not have an immediate intention to hire.
Often they keep jobs open to accept applications on a rolling basis or while they hold out for a perfect candidate.
Meanwhile, a range of businesses targeting job-seeking graduates have proliferated over the last couple of years, some of which have been set up by recent university leavers themselves.
Reddit posters complain that some websites promote fake job advertisements that are only there to entice them into enrolling for paid-for training courses.
Others speak of organisations that spam them with offers for internships that they later find out they have to pay for.
Graduates who have interacted with these outfits say they are exploiting them at a vulnerable point in their lives.
In a similar vein, a plethora of coaching services for entry into banking and financial services have popped up, supposedly guaranteeing internships and other pathways to jobs at global institutions for a hefty upfront fee.
“I was outraged at the practices and the price,” says one graduate jobseeker, who ultimately declined to pay the monthly fee of £5,700 he was being asked for.
The graduate asked to remain anonymous because he’s older and still struggling to find the right job after several years.
The sum included “technical training and career support”.
“When you’re desperate to get your foot in the door, sometimes you go for desperate measures,” he says.
The person the graduate spoke to at the coaching service was putting pressure on him to make a decision.
“[They] said lots of parents financed this as part of helping their children out and that if I couldn’t afford it I should ask my mum or take out a loan,” he says.
Meanwhile the brutality of the market is revealing weaknesses among the fresh cohort of jobseekers.
Many are digital natives who have struggled with the unstructured, more analogue parts of professional life: small talk, follow-up calls, persistent check-ins and in-person networking.
School years disrupted by the pandemic and a university experience delivered partially through screens have left some graduates less practised at the interpersonal friction of everyday working life.
Recognising that the youngest cohort of applicants often have poorer communication skills, Sally Wynter, the co-founder of Hunch, a job search platform designed primarily for Gen Z, organised an online workshop about how to handle interviews.
“There were 30 people online but when I said I wanted them to ‘tell me something about yourself’, a lot of them froze up,” Wynter says.
“When it was time for them to go on camera to speak with their voice, half the participants dropped out of the session. They didn’t feel confident enough.”
The crunch is prompting many graduates to reassess the value of a university degree itself.
Universities continue to churn out record numbers of degree holders, yet industries are now more focused on specific skills tailored to their profession.
It’s why so many engineering graduates, for example, are left without a job even as critical industries from the energy to defence sectors complain about a shortage of trained staff.
The mismatch is sharpening doubts about whether three years of lectures and loans are worth it.
“Degrees used to be held in higher regard, now employers are valuing them less.
Now it’s more about experience, results and skills,” says Dan Mian, who runs the career coaching service Gradvance Academy.
“Employers’ expectations are quite high.
They have more choice [among candidates], so they are building the perfect wish list,” he adds, saying an individual with multiple years of work experience is often willing to take more junior positions.
While current US data suggests young people without a degree seeking blue-collar jobs are having a tougher time than graduates seeking to dive into knowledge work, what the future looks like for them is up for debate.
By 2030, the US Bureau of Labor Statistics estimates that about 60 per cent of new jobs will come from occupations that typically do not require a degree.
Some workplace experts say higher demand for skills needed in trade professions — from electricians to plumbers and carpenters — that are resistant to AI could spark a revival in blue-collar work.
James Reed of recruiter Reed, which was founded by his father, has warned graduates that they should “think about a job that involves working with your hands” as AI takes on white-collar work.
In a survey of Reed clients last year, 15 per cent said they had reduced hiring because of AI.
The reduction can partially be seen in the graduate jobs numbers.
The company had 180,000 postings for graduates in 2021 and only 55,000 in 2024.
Experts warn that if office workers retrain in manual labour skills for more stable pay and careers, then young people without a degree will get pushed down the pecking order.
Already signs of these shifts are visible.
Wynter, who also has a WhatsApp group for graduates for sharing tips and tricks, says those who are seeking stopgap jobs in hospitality and retail are often excluding their degrees from job applications.
In white-collar work, AI is already disrupting customer service and marketing functions, displacing mundane tasks across back-office roles in finance, HR and public relations.
While AI is not currently wiping out jobs wholesale, roles are being reconfigured and big companies such as Microsoft, BT and others are pre-emptively cutting jobs with the view AI will replace some of the work of humans.
It’s partly why the classic corporate pyramid structure in the workplace is at risk of shifting into a diamond, workplace experts say, with fewer juniors at the base, a swollen middle of skilled operators and middle managers, and a smaller cohort of leaders at the top.
“There is a big question over what you’re going to do with this group of highly educated people,” says one corporate executive at a private dinner.
Another wondered what training now looks like for younger people if they aren’t doing the more menial tasks they would have been assigned previously: “How will they know what good looks like?”
There is also the broader question of what the knock-on effects would be of AI augmenting or displacing the work of humans, reshaping entire organisations and the way they operate.
While major corporations have experimented with AI, they are only just starting to see the efficiency gains.
But more will come as executives fulfil promises to shareholders, says Tera Allas, an expert on economic growth and productivity who advises McKinsey, a consultancy.
“But then what do you use the AI time savings for?
A coffee break, to head home early or think more and turn this into some massive productivity gain?”
Allas asks.
“Over time we will see.”
Morgan Carter, 22, who graduated from the University of South Carolina with a bachelor’s degree in mass communications last year, says she refuses to be miserable about the state of the jobs market.
“I decided to change my way of thinking about it,” she says, asking herself instead: “How do I get the right experience to guarantee a job?”
The answer, for her, is to go back to college.
She has observed that those who have expertise in the world of AI are more likely to be recruited and achieve higher salaries.
So she decided to go back to university to do a master’s in data analytics as a result.
“It’s hard to anticipate the future, but I want to set myself up for success,” she says.
0 comments:
Publicar un comentario