UK graduates face tough jobs market as AI transforms recruitment

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UK graduates face the stiffest competition for jobs on record as they seek to enter a slowing labour market where the number of applications for each vacancy has been supercharged by the use of artificial intelligence.

Employers running graduate training schemes received an average of 140 applications for each job in 2024, 59 per cent more than in 2023, the Institute of Student Employers said on Thursday. It was the highest number recorded in an annual survey the organisation has run for more than three decades.

Stephen Isherwood, ISE joint chief executive, described a “vicious circle” in which AI had made it easier to apply for jobs at speed, pushing the volume of applications up and their quality down and “creating more rejections”.

The fierce competition is partly due to a UK-wide slowdown in hiring, which has been sharpest in popular, highly paid sectors such as IT and consulting that often employ large volumes of new graduates.

The ISE said graduate vacancies at the large employers it surveys had grown 4 per cent in the past year, compared with 6 per cent the previous year. But graduate hiring in the digital and IT sector fell 35 per cent, while in finance and professional services it was down 5 per cent.

Across all employers surveyed by the ISE, vacancies were expected to grow just 1 per cent over the next 12 months due to uncertainty over the economic outlook and government policy.

“It’s tougher than it has been, without a shadow of a doubt,” said Anne Clinton, director of careers at the London School of Economics, adding that a pullback in graduate hiring by smaller companies meant more students were competing for the remaining places on big training schemes.

Hiring in the wider graduate jobs market has fallen outright, according to data from Adzuna, a job aggregator, showing that postings of graduate jobs were 10 per cent lower in September than a year ago.

London, which accounts for almost a third of graduate roles, experienced a sharper fall of 22 per cent, according to Adzuna’s data. There was a contraction in almost all sectors, with teaching the only sector where job postings were higher than a year earlier — more than doubling between August 2023 and 2024. Since 2019, teaching and customer services have been the only sectors where demand has increased for graduates.

Fewer employers than in the past demand a 2:1 degree as a minimum qualification and Isherwood said that “while this marks a positive move from employers encouraging . . . a broader pool of candidates, the downside is that this amounts to millions of rejection messages”.

The LSE’s Clinton said the process of applying for jobs had become much more demanding over time. In the past, students would have needed to put in 15 to 20 applications to secure a job, but “now they do 50”.

Some students are turning to AI tools to help them write cover letters and manage the volume of applications, but Clinton said “the problem is, the technology isn’t very good at tailoring”, and on both the candidate and the employer side, “everyone is trying to work out how to use it”.

She added: “There is too much pressure on students . . . It’s crossed a line.”