The graduate 'jobpocalypse': Where have all the entry-level jobs gone? | FT Working It

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Entry-level jobs are vanishing at an alarming rate.

It's likely to be one of the most challenging times in history for graduates to get a job today.

The perfect storm of AI, political instability, and economic uncertainty are causing what some are calling the 'jobpocalypse.'

If you don't hire people right now, the company will cease to exist in 15 years.

If the first rung of the job ladder is disappearing, what does that mean for the future of work? I'm Isabel Berwick. I lead the FT's Working It brand: speaking, presenting, and writing about management, leadership, and workplaces. In this series, I'll explore some of the most pressing issues around the future of work and talk to senior leaders about how they are making work better...

Human beings are wired to resist change.

...for everyone.

Job openings for graduates are at an all-time low. Job listings in both the US and UK are plummeting. And for the first time on record, levels of joblessness amongst graduates is above the overall unemployment rate. When I met with industry experts a year ago we talked about the big problem facing recruiters, the skills shortage and the AI arms race changing the way people applied for roles.

A lot has changed in this period, and not for the better. The issues with recruitment are still there. But what has changed is the rise in big graduate employers really cutting the number of jobs they're offering.

There's some data from Indeed, which is one of the big job platforms, that says that the number of job vacancies for new graduates has dropped about 33 per cent, about a third, just over the past year. So that just means more people - because we know that more and more people are going to university - chasing fewer and fewer jobs.

Some people talk about this idea of a diamond-shaped structure, where you might have your top people, your CEOs, at the top, then a lot of people in the middle, but not many people at the bottom. I struggle to figure out how that's going to work because there's a very obvious problem that anyone can think of that where are the people in the middle going to come from if you're only hiring a few at the bottom?

Chris Eldridge, chief executive at recruitment firm Robert Walters, met me at the FT's video studio. So what are you seeing in the market for graduates at the moment? What's the big picture?

I think if you zoom out, it is... it's likely to be one of the most challenging times in history for graduates to get a job today. The one consistent factor is the economy. I think companies want to hire when they've got some foresight into the economy. And today, it's a really challenging time to be able to forecast what's going to happen next. We see that then in hiring numbers. Companies just don't want to risk their capital right now. And therefore, they're just pausing the graduate intake. But that pause really has now lasted for two, two-and-a-half years.

So what's the knock-on effect of a two or three-year pause in early career hiring further up in workforce development?

I think what we'll end up doing is we'll end up finding, in two or three years' time, a kind of void of talent. If you're not bringing in new skills now, what you tend to do is hang on to the existing staff you've got. And then you promote them. You potentially overpromote them.

I think particularly when you look at the US market, what they're looking for when they say, is it new applicants to the market, the recent graduates, they don't mean someone that's coming out of university today. What they're really looking for is somebody with one or two years experience.

I went to Paris to meet Jérémy Clédat, co-founder and CEO of AI-powered recruitment platform Welcome to the Jungle, which attracts large numbers of new graduates looking for their first jobs.

Just on our platform since 2024, I think you've seen a very sharp decline on entry-level jobs posted by companies. And even more specifically, you see that this decline has been three times faster and higher than other positions for more senior people.

So basically, what does it mean is that companies are really waiting to see if... what is impact of AI? Does it mean that we don't have to recruit entry-level positions? And most importantly, what are we going to do with more senior roles? So a lot of people, in fact, are waiting. And because companies are waiting, you see this decline going faster and faster.

Do you think that employers realise that they have this - if we say social duty, maybe it's more than that - imperative to train people from the start otherwise they'll have no pipeline. Or are they just focused on the money?

I think it's hard for companies to think about social duty without putting their money problems first. But I think they know that it's going to be a big, long-term problem. Just look, for instance, at two specific industries, which are accounting and law firms, because probably with AI, we can do a lot of stuff, maybe 80 per cent of what junior lawyers do.

But the problem is also, for instance, the average age in this law firm is 55. And so if you don't hire people right now, the company will cease to exist in 15 years. I don't think AI will replace everything. And anyway, we don't know. And so the problem is that we don't know who is making a mistake.

The graduate jobs crisis is much more nuanced than just being down to AI. But there are companies that have gone all in on artificial intelligence and have cut jobs. And the results have been varied.

We're in the very early days of figuring out how robust this technology is in the real world of the workplace and outside of a few specialised things. And so I think it's quite possible that we'll see some companies getting carried away and laying off swathes of their staff and saying they'll replace them with AI agents and then discovering that it's actually much more difficult than they realise to make this work in a way that's reliable, accurate, cybersecure. And so you might see some wrong turns and missteps along the way.

The legal profession is a sector that's likely to be radically reshaped by AI, certainly in terms of cutting the work typically done by graduate recruits. I met with Julian Taylor, senior partner of international law firm Simmons & Simmons, who have fully committed to an AI future. So looking ahead, what kind of role will this kind of AI tool play in future? We're just at the very beginning in the legal profession.

I think it's going to do a huge amount of some of the more commoditised work that takes place at the moment, the more data-orientated, the analytical work, administrative. Vast amounts of that will be done by AI. I've got no doubt about that. Three, five years from now, I think things will look quite different.

Will it change the career structure of a lawyer? Will it change the org chart?

Yeah. Some organisations have been coming out and saying, well, they're going to hire fewer, particularly, graduate lawyers. I think that's just really dangerous. I think if you start cutting your numbers, you need to think about what's your pipeline like for the future. And if we get too narrow at the entry point, I think that will create problems further down the line. It's much easier to take your talent from your own trainees. We'll need to think differently about how we train our people. But I think it's really important to retain that pipeline.

So we've talked about the structure of how a junior lawyer would work at the moment, where there's a lot of repetition and what, probably, in the past would be called drudge work. If that's going or is... there's much less of it, what happens next for them in the new era?

We'll need to find ways, if AI is doing that, of ensuring that they still learn. You learn from maybe the third or fourth time that you do that stuff. You're not still learning in quite the same way after the 20th or 25th time that you're doing it.

I think there's a real opportunity to move our trainees who are highly smart, highly skilled, further up the value chain in terms of the work that they're doing. I think a lot of the time in big law firms, more junior lawyers and trainees are protected for quite a long time from that higher value work.

In 2023, Simmons & Simmons launched their in-house gen AI tool called Percy.

It's a retrieval-augmented generation engine. And it's a way to process documents in a... with a particular technique in the background to make them more accessible.

The tool assists their employees to crunch through masses of documents and make sure they cover all the important points in their decision-making.

So we've asked it to help us draft some interview questions or potential questions that we might want to get more information about the complaints he's raised. Here you can see that Percy has spat out some questions by theme.

Do you think you've lost anything by not having to read through reams and reams of documents in the same way?

No, I don't think so. I'm still reading all the documents. I'll have read every single line of all the interview notes before I've produced any outcome because, again, you're never going to rely 100 per cent on what Percy tells you. So I've still done that. But then what it's allowed me to do is just ensure that the output that I'm creating is just that bit more accurate.

So there's been some research that shows that humans tend to cognitively offload when we're using AI. We don't engage with it in quite... at quite the same intensity as when we're processing stuff that we're reading and writing about. How do you get past that, because you have to as lawyers?

Where you might see the cognitive offload happen is where people shortcut their prompts. And naturally, what you get back is also not as good. Here, you can see that there's... time's been taken out to actually produce the prompt. And that actually requires you to actively engage in what the output that you want is. So until you do that, you're then not actually going to get what you want from the AI.

So your prompting skills are improving along with your legal skills?

Yeah, absolutely.

Being adept at writing prompts is currently key to using AI effectively in law firms and elsewhere. It requires us to communicate complex ideas effectively and clearly, and will be a skill most of us need for the future. Expensive talent wars still continue in the legal sector. But could the lure of AI training and job augmentation be what sways the best talent?

You've got to be comfortable using AI. I've moved my messaging a bit internally when I'm doing town halls from trying to reassure people to... I think people have to be a little bit scared because I think jobs will disappear. We don't quite know how things will be in a few years' time. It's all changing pretty rapidly. So they need to be able to be flexible with whatever's taking place.

As employees, we have to accept that our bosses are in a period of experimentation, and we're part of it. Some of them are going all in on AI at the expense of jobs. And some of them are maintaining hiring, especially at the junior level. But for students and graduates, it raises the question of whether university is even worth it anymore.

My feeling is yes. If you've got a degree from a top university, that's always going to start your career off on the right foot. But overall, the education system, both in schools and universities, is not equipping graduates and school leavers with the skills, and also the critical thinking, that they'll need for a future-proof career in the workplaces of tomorrow.

So if you look back hundreds of years to medieval times, one of the ways in which young people learned their skills was that they would be apprenticed to a master. And actually, often, their middle-class families would save up their money and pay that master craftsman to take their young person on.

And I have talked to some people who think that maybe that's going to be a model for the future because if a big company can't really monetise the skills of their more junior people, rather than not hire them at all maybe they'll be willing to take them on in exchange for some sort of fee, or the alternative would be a return of a kind of indentured labour, which also happened with apprenticeships, whereby a company can say, well, look, we'll take you on and train you even though we can't really sell your skills just yet. But in return, once you're fully trained, you're going to need to stick with us for 10 years or whatever. It's interesting to see how these super modern problems are having people reaching into the history books for potential solutions.

AI evangelists are saying that the skills that will be needed for entry-level jobs in future are changing fast. And some of them are even guessing what skills are going to be needed for jobs that don't exist yet. But in the meantime, we're cutting those entry-level jobs and the drudgery that goes with it. But are we throwing out something valuable when we do that? Those entry-level jobs create the pipeline for the future. And without it, we may all be adrift.