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

Entry-level job opportunities are drastically shrinking, creating a challenging environment for recent graduates. This decline is attributed to a combination of AI advancements, economic uncertainty, and political instability, leading some to call it a "job apocalypse." Companies are cutting graduate intake, resulting in more individuals competing for fewer positions, a trend that could lead to a significant talent void in the coming years.

The impact of AI on the job market, particularly for entry-level roles, is a significant concern. While some companies are embracing AI and reducing their workforce, the long-term viability and effectiveness of this strategy are still being determined. Industries like accounting and law are seeing AI automate tasks previously handled by junior employees, raising questions about future hiring practices and the need for continuous adaptation and skill development.

The disappearing entry-level jobs necessitate a re-evaluation of how talent is cultivated. Without this foundational rung on the career ladder, companies risk a future talent shortage. This has prompted discussions about historical apprenticeship models as potential solutions, emphasizing the need for adaptability and new approaches to training and development to future-proof careers.

• Entry-level job openings for graduates are at an all-time low, with job listings plummeting in the US and UK.
• Graduate joblessness is now above the overall unemployment rate for the first time on record.
• Job vacancies for new graduates have dropped approximately 33% in the past year.
• The legal profession is expected to be reshaped by AI, with potential automation of tasks done by junior lawyers.
• Historical apprenticeship models are being considered as a potential solution to current talent pipeline issues.

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The Vanishing Entry-Level Job Market [00:00]

• Entry-level jobs are disappearing at an alarming rate.
• This period is described as one of the most challenging in history for graduates seeking employment.
• A "perfect storm" of AI, political instability, and economic uncertainty is contributing to this situation.
• Some predict that companies not hiring people now may cease to exist in 15 years.
• The disappearance of the "first rung of the job ladder" raises concerns for the future of work.
• Job openings for graduates are at an all-time low, with job listings plummeting in both the US and UK.
• For the first time on record, graduate joblessness exceeds the overall unemployment rate.
• Industry experts previously discussed skills shortages and the AI arms race impacting recruitment.
• A significant change in the past year is the reduction in job offerings by big graduate employers.
• Data indicates a drop of about 33% in job vacancies for new graduates over the past year.
• This means more people are pursuing university degrees while chasing fewer job opportunities.
• The concept of a "diamond-shaped structure" in employment (few at the bottom, many in the middle, few at the top) is questioned due to the lack of entry-level hiring.

The current job market presents unprecedented challenges for graduates, with a significant decline in entry-level positions due to a confluence of technological, political, and economic factors. This trend is creating a competitive landscape where fewer jobs are available for a growing number of graduates.

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

Economic Uncertainty and Hiring Pauses [02:31]

• The economy is a consistent factor influencing hiring decisions.
• Companies prefer to hire when they have some foresight into economic conditions, which are currently challenging to forecast.
• This uncertainty leads to a pause in hiring, particularly for graduates.
• This pause in graduate intake has now lasted for two to two and a half years.
• A prolonged pause in early career hiring could result in a "void of talent" in two to three years.
• Companies tend to retain existing staff and promote them, potentially overpromoting them, if new talent isn't brought in.
• In the US market, "new applicants" often means individuals with one or two years of experience, not just recent university graduates.

Economic instability is a primary driver behind the current hiring freeze for graduates, as companies become risk-averse. This extended pause in recruitment is anticipated to create a significant talent deficit in the future, forcing organizations to rely on existing employees and potentially promote them beyond their immediate readiness.

"companies just don't want to risk their capital right now and therefore they're they're just pausing um the the graduate intake but that pause really has now lasted for two two and a half years."

The Role of AI and Industry Shifts [03:52]

• There has been a sharp decline in entry-level jobs posted by companies since 2024.
• This decline in entry-level positions has been three times faster and higher than for more senior roles.
• Companies are waiting to assess the impact of AI, questioning whether to recruit entry-level positions and how to manage more senior roles.
• This waiting period contributes to the accelerating decline in job availability.
• Companies are aware of the long-term problem of not training new talent, but financial concerns often take precedence.
• Industries like accounting and law firms are highlighted as areas where AI can automate a significant portion of junior work (e.g., 80% of what junior lawyers do).
• If companies in sectors with an aging workforce, like law firms with an average age of 55, do not hire now, they risk ceasing to exist in 15 years.
• It is uncertain if AI will replace everything, and the consequences of this uncertainty are unknown.

AI is significantly impacting the job market, with entry-level roles experiencing a decline at a disproportionately faster rate than senior positions. This shift is forcing companies to re-evaluate their hiring strategies, while also facing the long-term implications of not nurturing future talent, especially in sectors heavily influenced by automation.

"So basically what does it mean is that companies are really like waiting to see if like what what is the impact of AI? Does it mean that we don't have to recruit like entry- level positions and most importantly uh what are we going to do with more senior roles?"

Navigating the AI Revolution in the Workplace [05:49]

• The graduate jobs crisis is complex and not solely attributable to AI.
• Some companies have fully embraced AI, leading to job cuts with varied results.
• The real-world application of AI in the workplace is still in its early stages, and its robustness is being determined.
• Companies might overreact by laying off staff and expecting AI to replace them, only to find it more difficult than anticipated to implement reliably, accurately, and securely.
• Potential for wrong turns and missteps in AI adoption is acknowledged.
• The legal profession is expected to be radically reshaped by AI, particularly concerning tasks performed by graduate recruits.
• AI is predicted to handle a huge amount of commoditized, data-oriented, analytical, and administrative work in the legal field.
• Hiring fewer graduate lawyers is considered dangerous by some, as it impacts the future talent pipeline.
• Narrowing the entry point for talent can create problems further down the line.
• It is easier to develop talent from one's own trainees.
• There is a need to rethink how people are trained, while retaining the talent pipeline.
• AI performing repetitive "drudge work" means junior lawyers and trainees need to learn differently.
• There's an opportunity to move trainees to higher-value work, as they are often protected from such tasks for extended periods.

The integration of AI into the workplace is a multifaceted process with unpredictable outcomes. While AI has the potential to streamline operations and automate tasks, its implementation carries risks, and its full impact on jobs, especially entry-level roles, is still unfolding. Rethinking training and development is crucial to adapt to these changes.

"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."

AI Tools and Skill Development [08:48]

• A firm launched an in-house Gen AI tool called Percy in 2023, designed for document processing and making information more accessible.
• Percy assists employees in analyzing large volumes of documents and identifying important points for decision-making.
• The tool can help draft interview questions or extract information based on themes.
• Users still need to read all relevant documents and are cautioned against relying 100% on AI output.
• AI tools can help ensure that the output created is more accurate.
• Humans tend to cognitively offload when using AI, engaging with content less intensely.
• To overcome cognitive offloading, users must avoid shortcutting prompts and actively engage in defining desired output.
• Prompting skills are improving alongside legal skills.
• Being adept at writing prompts is crucial for effectively using AI in law firms and elsewhere.
• This skill requires communicating complex ideas clearly and effectively, and will be essential for most people in the future.
• The allure of AI training and job augmentation may sway top talent in the legal sector, where talent wars continue.
• Employees need to be comfortable using AI and adaptable to rapid changes.
• A sense of urgency, even a little fear, is necessary as jobs will disappear and the future remains uncertain.
• Employees are part of an ongoing period of experimentation by their employers.

The development and use of AI tools, such as those in legal firms, highlight the evolving nature of work. While these tools offer significant advantages in processing information and improving accuracy, they also necessitate new skill sets, like advanced prompting, and a conscious effort to avoid cognitive offloading to ensure effective utilization.

"Being adept at writing prompts is currently key to using AI effectively in law firms and elsewhere."

The Future of Education and Talent Pipelines [11:50]

• The question of whether university is still worthwhile for students and graduates is raised.
• A degree from a top university is still seen as beneficial for starting a career.
• However, the overall education system (schools and universities) is not adequately equipping graduates with the necessary skills and critical thinking for future-proof careers.
• Historical apprenticeship models, where young people learned skills from master craftsmen, are being considered as a potential future model.
• If large companies cannot monetize the skills of junior employees, they might take them on in exchange for a fee, similar to paying a master craftsman.
• An alternative could be a return to "indentured labor" or long-term commitments where companies train individuals who then commit to working for them for an extended period (e.g., 10 years).
• Modern problems are prompting a look back at historical solutions for guidance.
• AI evangelists suggest that entry-level job skills are rapidly changing, and some predict skills for jobs that don't yet exist.
• The concurrent cutting of entry-level jobs and associated "drudgery" raises the question of whether something valuable is being discarded.
• Entry-level jobs create the future talent pipeline, and its absence could lead to broader instability.

The education system is struggling to keep pace with the evolving demands of the future workforce, prompting a re-examination of how skills are acquired. The decline of entry-level positions necessitates innovative approaches to talent development, potentially drawing inspiration from historical models like apprenticeships to ensure a continuous pipeline of skilled professionals.

"The education system, both in schools and universities, is not equipping graduates and school levers with the skills and also the critical thinking that they'll need for a futurep proof career in the workplaces of tomorrow."