Graduates Facing Workforce Crisis Due to AI Impact on Job Market

The current crisis is as much economic as AI-led. A shifting graduate labour market is not unusual, according to Kirsten Barnes, head of digital platform at Bright Network. She mentioned that changes in the graduate job market this year are influenced by wider economic conditions and fluctuations in business demand, rather than solely by AI. Claire Tyler, head of insights at the Institute for Student Employers (ISE), stated that companies recruiting fewer graduates have not attributed it to AI. Some recruitment specialists pointed to the recent increase in employer national insurance contributions as a factor affecting entry-level recruitment. Ed Steer, chief executive of Sphere Digital Recruitment, noted a significant drop in graduate vacancies, attributing it to businesses preferring more experienced applicants.

However, Auria Heanley, co-founder of Oriel Partners, observed a 30% decrease in entry-level roles this year, attributing it to AI and wider economic uncertainty. Felix Mitchell, co-chief executive at Instant Impact, mentioned that Stem-related jobs have been the most disrupted by AI. He also highlighted that while AI may create jobs in the long run, the losses are currently outpacing the gains.

Major tech companies like Microsoft are emphasizing the impact of AI agents as competent workplace assistants. Dario Amodei, boss of AI developer Anthropic, warned that AI could eliminate half of all entry-level office jobs in the next five years. James Reed, chief executive of Reed employment agency, stated that AI is transforming the job market significantly, with many businesses investing heavily in it. Sophie O’Brien, chief executive of Pollen Careers, noted that AI has accelerated the decline in graduate recruitment, indicating a potential shift in the job market in the near future.

David Bell from Odgers executive search firm mentioned that law firms are now seeking AI competence from graduates during the recruitment process. James Milligan, global head of Stem at Hays, highlighted the importance of AI skills for graduates to stay competitive in the evolving job market. Chris Morrow, managing director at Digitalent, emphasized that AI is creating new job categories rather than solely replacing existing roles. Universities are urged to update their courses to include AI-related skills to meet the growing demand.

Graduates are increasingly using AI tools to streamline their job applications, with organizations reporting a rise in AI usage for applications. Bright Network noted a 50% increase in graduates and undergraduates using AI for applications. Teach First plans to enhance vetting processes that do not involve writing to accommodate computer-generated entries. However, excessive use of AI in applications could lead to early termination of recruitment campaigns and potentially impact under-represented groups, warned Tyler from ISE. James Reed highlighted a shift in perception regarding errors in CVs due to AI tools.