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

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 job apocalypse.

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 Isabelle Baruk. I lead the

work? I'm Isabelle Baruk. I lead the FT's working at Grant, 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.

[Music] Job openings for graduates are at an all-time low. Job listings in both the

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

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% 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 the 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 uh 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 they're just pausing um the 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 uh early career hiring you know 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. um 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 um what they're looking for when they say is it kind of new applicants to the market you know recent graduates they're really 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 [Music] I went to Paris to meet Jeremy Cla,

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 like a very sharp decline on entry-level jobs like posted by by companies and even more specific

specifically you see that this decline has been like three times faster and higher than other positions for more senior people. So basically what does it

senior people. 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? So a lot of people in fact are

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 realize that they have this

kind of if we say social duty maybe it's more than that you know 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 like social duty without like putting like their money problems first but I think they know that it's

going to be a big long-term problems just look for instance at at two specific industries which are like accounting and uh and law firms because probably with AI we can do a lot of

stuff like maybe 80% of what junior lawyers do but the problem is 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 [Music] The graduate jobs crisis is much more nuanced than just being down to AI. But

there are companies that have gone allin 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 specialized things. And so I think it's quite possible that we'll see

some companies getting carried away and laying off sways of their staff and saying they'll replace them with AI agents and then discovering that it's actually much more difficult than they realize to make this work in a way

that's um reliable, accurate, cyber secure. And so you might see um some

secure. And so you might see um 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 and Simmons who have fully committed to an AI future. So looking ahead, what kind

AI future. So looking ahead, what kind of role will this kind of AI tool play in future? We're just at the very

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 commoditized work that takes place at the moment. The more data orientated, the analytical work,

administrative, vast amount of that will be done by AI. I've got no doubt about that. 3 5 years from now, I think things

that. 3 5 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?

lawyer? Will it change the org chart?

Yeah, I mean some organizations have been coming out and saying, well, they're they're going to hire fewer particularly, you know, graduate lawyers. I think that's just really

lawyers. I think that's just really dangerous. I think if you if you start

dangerous. I think if you 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

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. Um, but I think it's really

people. Um, but I think it's really important to retain that pipeline.

So, we've talked about the structure of how a a junior lawyer would work at the moment with 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

doing it. I think there's a real opportunity to move our trainees who are highly smart, highly skilled, kind of 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 are protected for quite a long time from that higher value work.

In 2023, Simmons and Simmons launched their in-house Gen AI tool called Percy.

Hi. Hi.

It's a retrieval augmented generation engine and it's a way to process documents, you know, 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 um draft some interview questions or potential questions that we might want to kind of get more information about the complaints he's raised. Here you can see that Percy has kind of 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 mean, 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% on what Percy tells you. Um

so I've still done that but then what it's allowed me to do is kind of 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 kind of shortcut their prompts and naturally what you get back is also not as good.

Here you can see that there's times 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 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 you've got

to be comfortable using AI. Um I've

moved my messaging a bit internally when I'm doing town halls from trying to reassure people to kind of 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

rapidly. So they need to be able to be um flexible with whatever's taking place. As employees, we have to accept

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

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

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 levers with the skills and also the critical thinking that they'll need for a futurep proof career in the

workplaces of tomorrow. So if you look back sort of 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 you know, 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 monetize the skills of their more junior people rather than not hire them at all, maybe

maybe they'll be willing to take them on in exchange for some sort of fee. The

alternative would be, you know, a return of a kind of indentured labor, which also happened with apprenticeships, whereby, you know, 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, you know, 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 sort of 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- levelvel 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 a drift.