The job market is in turmoil, and recent graduates are feeling the brunt of it. But here's the shocking truth: graduate hiring has plummeted for the second year in a row, while apprenticeships are on the rise. Economic pressures are forcing employers to rethink their recruitment strategies, leaving university leavers in a tougher spot than ever. So, what’s really going on?
According to a survey by the Institute of Student Employers (ISE), graduate hiring has dropped by 8% year on year, marking the lowest level in seven years. Meanwhile, apprenticeship recruitment has surged by the same percentage—a stark contrast that’s turning heads. But don’t be fooled: the overall entry-level job market is still down by 5%, with 42% of employers cutting graduate roles and 40% reducing opportunities for school and college leavers. And this is the part most people miss: even as apprenticeships grow, graduates still outnumber apprentices, making the job market a complex battleground for new talent.
Stephen Isherwood, joint CEO of ISE, acknowledges the struggle: “It’s a tough job market for those leaving education, but many companies are still hiring entry-level talent.” He highlights a shift in focus: employers are diversifying their talent pipelines, turning to apprenticeships to address skills shortages. This means more opportunities for students to enter leading UK businesses—but it’s not all good news. Graduates remain a core part of recruitment, yet their path is increasingly uncertain.
Here’s where it gets controversial: Is AI to blame for the graduate hiring slump? Jack Jarrett, former international resourcing business partner at Amnesty International, argues that AI is automating routine tasks once used to train graduates. “AI is chewing through the boring work companies once relied on to develop new talent,” he says. Meanwhile, employers fear graduates are using AI to inflate their skills on resumes, adding another layer of complexity to the hiring process.
The big four accountancy firms—KPMG, Deloitte, EY, and PwC—have all slashed graduate hiring. KPMG cut its graduate cohort by 29%, while Deloitte, EY, and PwC followed suit with reductions of 18%, 11%, and 6%, respectively. David Morel, CEO of Tiger Recruitment, points to economic uncertainty as the driving force: “Employers are exercising caution, and competition for roles has never been fiercer.”
But what about the long-term implications? Morel calls them “concerning.” A gap in early-career recruitment could lead to future talent shortages, leaving organizations struggling to maintain skilled workforces. Jarrett adds that cutting graduate schemes risks demoralizing the next generation and overburdening existing staff. “Without fresh talent, organizations risk stagnation and reduced innovation,” he warns.
Despite fewer opportunities, the number of graduate applications has skyrocketed. Since 2002-03, the average applications per vacancy have tripled from 38 to 140. In 2023, over 1.2 million applications were submitted for just under 17,000 roles. The ISE attributes this surge to AI tools helping candidates craft resumes faster, creating a “double-edged sword” for HR teams. “While we have more candidates to choose from, the sheer volume makes it harder to identify genuine talent,” Jarrett explains.
So, where does this leave us? Graduates are frustrated, employers are cautious, and AI is reshaping the landscape. Is the rise of apprenticeships a sustainable solution, or just a temporary fix? And what does this mean for the future of graduate careers? Let’s spark a conversation—what do you think? Are apprenticeships the way forward, or is the decline in graduate hiring a red flag for the economy? Share your thoughts in the comments!
