University graduates across the UK are entering the most challenging job market seen since 2018, driven by a significant reduction in entry-level job postings and an accelerating shift toward artificial intelligence (AI) in recruitment and workplace automation.
According to data from job search platform Indeed, listings for graduate-level positions have plunged by 33% compared with the same period last year, marking the lowest level in seven years. Overall UK job advertisements have also declined by 5% from March to mid‑June, reflecting employer caution following recent hikes in employer taxes and increases in the minimum wage.
Economist Jack Kennedy of Indeed emphasises that while the broader labour market remains relatively stable, new entrants are disproportionately affected. He warns that employers are holding onto existing staff and automating roles before creating new positions, especially entry-level professional jobs.
This downturn leaves the UK lagging behind peers such as the US and other advanced European economies. Remarkably, it is the only major economy still below pre-pandemic vacancy levels.
Reports from the Organisation for Economic Co‑operation and Development (OECD) and the International Monetary Fund (IMF) indicate that AI could affect up to 60% of jobs in advanced economies, with a significant share potentially endangered. White-collar roles—from legal and medical to software positions—are particularly exposed to automation and cognitive AI tools.
Yet, some experts argue the narrative isn’t entirely bleak. The Tony Blair Institute contends that while some roles will disappear, AI may also spur the creation of altogether new job categories. Early-career survey data from Prospects suggests that around 11% of graduates have already pivoted their career paths due to AI’s influence, underscoring both its unsettling impact and the hope for emerging opportunities.
Further evidence of the strain on applicants comes from rising application numbers. The Institute of Student Employers reports that businesses now receive an average of 140 applications per graduate vacancy—a dramatic increase of 59% year-on-year. This deluge is partly a result of AI tools like ChatGPT and Microsoft Copilot enabling mass tailoring and polishing of CVs and cover letters.
Surveyed graduates also shared their anxiety: 14% reported feeling pessimistic about their prospects, and nearly half who changed job plans due to AI expressed uncertainty about their future. These metrics underscore the growing pressure and confusion new graduates face in a labor market upended by technology.
In response to these seismic shifts, UK Technology Secretary Peter Kyle urged immediate action. He encouraged both workers and businesses to embrace AI tools and upskill, warning that those who delay risk being left behind. He highlighted that AI adoption, though often initially daunting, can be exhilarating and liberating—so long as individuals actively gain the skills for the evolving economy.
Education and careers experts echo his advice. Many emphasise the critical need for developing soft skills—creativity, adaptability, communication—as well as tech proficiency. Universities and training programmes are being urged to adapt curricula to include AI literacy and human-centered skills, while employers are encouraged to offer apprenticeships and on-the-job reskilling.
The UK graduate labour market is undeniably at a crossroads. On one hand, AI is removing traditional entry points and increasing competition. On the other, it’s ushering in new forms of employment and emphasizing the importance of continuous learning and adaptability.
For recent graduates, this means that obtaining a degree is no longer enough. Success will hinge on combining formal qualifications with digital savvy, interpersonal strengths, and a growth mindset—embracing AI as a co-worker, rather than fearing it.
