UK Graduate Job Vacancies Hit Decade Low Amidst AI and Rising Costs

Graduate job vacancies in the UK have fallen to their lowest point in a decade, with new data indicating a 43% year-on-year decrease in openings on the jobs website Adzuna. In September, the platform recorded only 7,826 graduate vacancies, a figure not seen since Adzuna began tracking this data in 2016.

This significant drop in entry-level hiring is attributed to a combination of factors, including rising operational costs for businesses and the increasing adoption of artificial intelligence. More than half of hiring managers surveyed by recruitment agency Reed reported that AI is contributing to a reduction in job opportunities. Kristalina Georgieva, head of the International Monetary Fund, has characterized AI as a "slow-moving tsunami" poised to disrupt the global job market and diminish opportunities for younger generations.

The Confederation of British Industry (CBI) has also highlighted the rising cost of employing staff as a barrier to creating more jobs for young people. Inflation-driven increases in minimum wage rates and a significant national insurance tax increase on employers are cited as key drivers of these elevated employment costs.

Despite the overall decline, the average advertised salary for the remaining graduate roles remained relatively stable, hovering around £27,700. However, the scarcity of positions has intensified competition among job seekers.

Across the broader job market, total vacancies on Adzuna's platform decreased by 11.9% year-on-year in September, reaching 728,037. This has led to the highest level of competition for roles in over two years, with an average of 2.33 job seekers per vacancy.

Specific sectors have seen notable declines in job listings. The logistics and warehouse sector experienced a 23% year-on-year drop in September, while IT vacancies fell by 11.1% and trade and construction saw a 5.8% decrease. Teaching roles also contracted by approximately 4%.

In contrast, the healthcare sector shows signs of recovery, with increased demand for roles such as mental health practitioners, specialist nurses, and clinical nurse specialists. High demand was also observed in specialized engineering and legal fields, reflecting ongoing skills shortages in these areas.

Geographically, Scotland recorded the steepest year-on-year decline in job listings, down 27.2%. Yorkshire & Humber and London also experienced significant contractions, while the South East was the only region to register year-on-year growth, albeit a modest 0.9%.

London continues to offer the highest average advertised salary at £51,686, with a 6% year-on-year increase. However, regions like the North East, West Midlands, and Scotland face the highest job seeker-to-vacancy ratios.

September also marked a turning point in salary transparency, with the majority of job adverts disclosing pay information for the first time. This coincides with a government consultation proposing mandatory salary disclosure in job advertisements, a measure aimed at providing greater clarity for candidates. Andrew Hunter, co-founder of Adzuna, noted that the shift in the hiring market favors employers but emphasized the continued demand in healthcare and the positive impact of increased salary transparency on attracting quality candidates.