1. The current crisis has as much to do with economics as it does with AI

According to Kirsten Barnes, head of Bright Network’s digital platform, the graduate labor market is facing challenges that are not uncommon.

“Typically, fluctuations in the graduate job market hover around 10-15% this year, stemming from various factors such as the overall economic landscape and typical business demand changes, rather than being solely driven by AI.”

Fewer graduates report that among companies employing alumni, “no one attributes this to AI,” said Claire Tyler, director of insights at the Institute for Student Employers (ISE), which advocates for leading graduates.

Some recruiting professionals noted that the recent rise in employer national insurance contributions is hindering entry-level hiring.

Ed Steer, CEO of Sphere Digital Recruitment, highlighted a drop in graduate vacancies from 400 annually in 2021 to a projected 75 this year, indicating that companies prefer candidates with more experience to “hit the ground running.”

2. Nonetheless, AI is indeed a significant factor

Auria Heanley, co-founder of Oriel Partners, reported a 30% decrease in entry-level personal assistant roles this year, stating, “It’s undeniable that AI, coupled with broader economic uncertainty, is making it increasingly challenging for graduates to secure these positions.”

Felix Mitchell, co-CEO of Instant Impact, noted that fields related to STEM (science, technology, engineering, and mathematics) are particularly affected. “Evidence suggests while AI will create jobs, job losses will occur faster than new roles are generated.”

3. The revolution is set to escalate

Major tech companies like Microsoft are highlighting the profound impacts of AI agents—technology capable of performing complex cognitive tasks autonomously. Developer AI leader Dario Amodei has cautioned that this advancement could eliminate half of all entry-level office roles within the next five years.

James Reid, CEO of Employment Agency Reid, remarked that AI is on the verge of reshaping the job market dramatically.

“This seems to be a pivotal year where AI is truly transforming and becoming ingrained in workflows.”

Sophie O’Brien, CEO of Pollen Careers, catering to early-career and entry-level roles, mentioned that AI has “accelerated” the decline in graduate recruitment over several years.

She added: “It’s evident that a substantial number of jobs in the coming years will vanish due to the prevalence of desk jobs focused on information processing.”

4. Acquire AI skills immediately

According to David Bell from Odgers, an executive search firm, law firms are increasingly prioritizing AI skills in their graduate recruitment processes. “During interviews, they are inquiring about candidates’ knowledge and use of AI,” he noted. “Candidates unfamiliar with tools like ChatGPT will find it hard to secure positions.”

James Milligan, global head of STEM recruitment for multinational Hayes, concurred: “Without an understanding of AI tools, candidates will disadvantage themselves. Jobs remain, but they evolve. We are in the midst of that evolutionary shift.”

Chris Morrow, managing director at Digitalent, which specializes in AI-related placements, mentioned he is developing a new category of AI-Adjacent roles rather than merely adopting technology.

This rising demand for skills has led universities to rethink their curriculum. Louise Ballard, co-founder of atheni.ai, stated that while assisting companies in integrating AI technology, there’s a noticeable gap in “basic AI literacy education” at the university level.

“Your workforce lacks the necessary training,” she remarked. “Success in AI requires practical skills, which are not strictly academic.”

Morrow asserted the real concern lies in underutilizing AI, emphasizing that educational institutions and governmental policies need to adapt. “Universities must incorporate AI training across all subjects,” he urged.

5. Graduates are using AI to job-hunt, but caution is advised

AI is proving helpful for composing resumes and cover letters, leading to an increase in applications as the process becomes more user-friendly.

Bright Network reports that AI utilization among alumni and undergraduates has grown to 50%, up from 38% last year. Teach, a prominent graduate employer, plans to enhance non-writing review processes to mitigate the effects of AI-generated inputs.

ISE’s Tyler cautioned that over-reliance on AI in applications may force employers to cut recruitment efforts short and focus on specific demographics. This could disadvantage underrepresented groups, she indicated.

James Reed noted that what was once a major red flag, such as typos, may now be viewed differently. “In the past, I filtered out CVs with spelling mistakes, assuming candidates were either careless or inattentive to detail,” he remarked.

6. Consider applying to small businesses

Small and medium-sized enterprises, defined as those with fewer than 250 employees, have also emerged as viable options for graduates.

Pollen O’Brien noted that small businesses are the largest employers in the UK, accounting for 60% of the workforce. A lack of AI proficiency in these organizations presents unique employment opportunities.

“Many of these businesses are unaware of AI capabilities and may even fear them, creating chances for new graduates to provide much-needed skills,” she affirmed. “By imparting these skills to small businesses, there’s potential to revolutionize operations.”

Dan Hayes, co-founder of the Alumni Recruitment Office, remarked on the thousands of lesser-known employers “eager for innovative individuals.”

“There exists a vast, untapped market seldom covered in discussions,” he concluded.