The finance director of the big UK company shook her head in disbelief. “We were hiring for 16 graduate trainees for my department,” she said. “Within five hours of opening for admissions, we had 3,500 applications. It was absolutely insane.”
So swamped were her colleagues with desperate university leavers’ CVs that by that afternoon they switched off the advertisement.
Welcome to the graduate job market in 2025, where applying for a job means joining a stampede akin to the annual Glastonbury ticket queue. What do the figures tell us, and why are graduates caught in the crush?
Students are facing the toughest jobs market since 2018. Similar numbers are graduating as in previous years — around the million mark. But the number of graduate level jobs on offer is significantly lower. According to Stephen Isherwood, the joint chief executive of the Institute of Student Employers (ISE), things are only getting worse. He points out that there were 8 per cent fewer graduate jobs this year than last. The ISE predicts that next year will involve a further 7 per cent slide.
“It feels like we are in a recession,” says Isherwood. “It feels like we’re back in the financial crisis. Not as extreme, but similar.”
For graduates, it can feel soul-destroying.
Patrick Groves, 23, from London, graduated from Oxford with a modern languages degree last year. “Since then, I have completed hundreds of applications for all manner of careers,” says Groves, “from the public sector to consulting, think tanks and NGOs. I am still to secure full-time employment. In the past an Oxbridge degree commanded a certain level of certainty when approaching the job market. I now believe this is something of a fallacy. A degree is not enough.”
Historically, the biggest graduate hirers have tended to be the big consultancy and accountancy firms. But, uncertain economic times have hit hiring. KPMG reportedly cut its recruitment scheme by 29 per cent last year and the numbers have been flat this year, while Deloitte has done something similar. It scaled back by 18 per cent last year and has flat recruitment of 1,400 graduates and apprentices this year.
PwC cut its entry-level intake to 1,300 jobs from 1,500 last year, yet had 47,000 applications.
This picture has pushed graduates to look elsewhere, driving up competition for jobs in other industries, which are also cutting roles.
The real impact of AI
Some say the advent of generative AI of the type launched in the form of ChatGPT in November 2022 has upended the jobs market, as employers big and small use it instead of junior staff to perform relatively straightforward word-based or computer coding roles.
Data compiled for The Sunday Times by Adzuna, a jobs website, showed that, since ChatGPT’s launch, the number of advertised entry-level vacancies has fallen 45 per cent.
However, companies I spoke to said it was not true that graduate jobs were being replaced by AI … yet. They say that while it is helpful, it is too unreliable to replace people altogether.
One area where companies have been experimenting with AI, however, is recruitment, says Charlie Ball, graduate labour specialist at Jisc, a not-for-profit employment consultancy, although it hasn’t exactly been smooth sailing. “Most companies’ experience of AI has been in their recruitment work, where it has made a total mess of it,” says Ball.
And here is the nub of the problem. One of AI’s great strengths is its ability to fill out forms in a grammatical and well-spelt way; it is perfect for students wanting to mass produce CVs and covering letters.
Recruiters say they have been swamped with AI applications. Some research suggests there has been a 40 per cent jump in applications for graduate jobs this year, fuelled by the ease of drafting them.
Compounding the problem are professional websites that can send applications out en masse as soon as a vacancy appears.
“It means you’re no longer deterring the casual respondent who’s not really that interested in the job,” says Ball. “Worse still, the AI is making them appear suitable. It’s only when you get to the end of the application that you see that they’ve not even got the right qualifications, or the right working visa.”
This gums up already lengthy hiring processes, and leaves students waiting months to hear back from companies. It also costs companies more money to process their applications. Advertising, interviewing and testing are not cheap.
Can’t the hirers just use AI to weed out the bad applicants? No, says Ball: “Oddly enough, AI is really bad at spotting AI.”
Bad publicity
Euan Blair, the entrepreneurial son of the former prime minister, whose company Multiverse runs training schemes for more than 1,500 organisations, argues that there is another factor that is putting off employers: “Constant negative articles about Gen Z. I don’t think it’s fair,” he says, “but hiring young people is seen as a risk. It’s connected to the fact companies are trying to figure out how AI will impact their businesses.
“There has been this incredible investment in developing AI, data centres and so on, but so far AI adoption has been really low and lack of skills and training is a huge part of that. People are struggling to use AI effectively in the workplace.”
One senior manager in his fifties at a global IT consultancy says: “The graduates we hire just don’t seem to have the drive to work the extra hours and excel. They leave at 5.30pm on the dot and hide behind their screens if the manager asks for volunteers for a big new challenge.”
One big-name City pension fund manager in his forties agrees: “We hired a lot of people in that first year after Covid but they were the worst hires I’ve ever made. They couldn’t talk face to face, they didn’t work hard enough. One informed me after a month that he was now going to be working from home back in the Midlands. I told him: ‘Er, no you’re not.’ So he resigned!”
Faced by the tough competition for places, many students are taking up teaching degrees — a route that often proves popular in times of recession. Others are thinking of going travelling after graduating, hoping that the economy will turn while they are away.
Is a degree still worth it?
Mancunian Patrick Clarke, 22, who I meet by Bristol University’s arts and social sciences library, is in the thick of exams in the final year of his Spanish and politics degree. He says he has applied unsuccessfully for graduate schemes at the BBC and the civil service. “I might take a year out next year and reapply because it just takes so much time. I’ve already got a part-time job and I’m studying hard at my uni work.”
Asked how he feels about the grim state of the job market, he says: “It can be disheartening because of how much money we pay for uni. Bristol’s quite a prestigious uni and you’d hope we’d have some sort of benefit.”
At the university’s careers service, Claudia Osborne, 20, from Leicester, is not applying for the big graduate scheme jobs. She is in the last year of a degree in film and television studies and has been contacting potential employers in local TV and film-making studios. “I’ve been sending out my CV and meeting people. Hopefully I’ll get an unpaid internship first and then move up to a paid role perhaps as a TV production assistant,” she tells me.
How to stand out
Those hunting for employment would do well to be flexible, says Karen Barnard, director of higher education development and support at UCL: “Don’t be too fixed on where to apply geographically, or what type of starter job to accept. You might want to go for one of the big company grad schemes, attending events on campus from the big companies, but there are great smaller companies out there too. They may not have the classic two-year graduate training the big firms have but they can have other benefits — it can be all hands on deck, so you get a wider experience, and you get greater access to all levels of the business.”
Charlie Ball at the higher education service provider Jisc advises jobhunters to find the name of the hirer and phone them up. “Tell them you’re really keen on the role and ask for advice on how to get noticed. It’ll mark you out for your initiative and make them realise you’re for real and not just an AI-driven application form.”
Given the current climate, many young people are questioning whether they should have gone to university at all. I wonder whether Osborne considers her degree, and the thousands of pounds of debt it could leave her with, was worth it, particularly if she is now looking at entry-level roles in television. “I could have gone for an apprenticeship but university has given me a lot of experiences and skills that I’ve learned from professionals who worked in the industry,” she says. “I feel I got what I paid for.”
The government has been increasingly pushing apprenticeships as an alternative. The recent budget changed the funding of schemes for small and medium-sized enterprises. Rachel Reeves also promised a further £725 million to go into the apprenticeship levy, which is largely funded by big employers.
Many in industry have said Britain should learn from the German system, where children can specialise in vocational training in their early teens.
• Grim times for graduates facing worst jobs market in a generation
For engineering graduate Rex Padella, 24, the process of recruitment has been “draining”. He describes how every application requires repeated, lengthy rounds of questionnaires, automated video interviews using a system called HireVue, and reasoning tests. Only then is someone invited for an in-person interview, followed by a day at an assessment centre.
“I got through all that with Novo Nordisk, and got offered a job, only for them to cancel it four days before my start date.” The pharmaceuticals company scrapped many new graduate contracts in September as part of a cull of 9,000 roles amid competition for Ozempic from Eli Lilly’s weight-loss drug Mounjaro.
He says friends had similar experiences of lengthy job processes resulting in failure. “The only people on my course who have found a serious role have been placed into those positions by their parents and parents’ contacts.”
Padella is most angered by employers’ attitude towards Gen Zers like him. “There is a painful misunderstanding from our parents’ generation: often we are considered lazy, demotivated, incapable. The reality is we’ve done what we’ve been told: get good grades, get into a great university, do your internships and get a job. This is no longer valid. It simply doesn’t work any more. The system is broken.”
