The Realities of Graduate Employment and Recruitment
In a world often filled with alarming headlines about plunging opportunities for graduates, a recent study from the Institute of Student Employers (ISE) paints a different picture. The ISE Student Recruitment Survey 2025 reveals that the situation regarding entry-level jobs is not as dire as it may seem.
This comprehensive survey has gathered insights from 155 employers who are part of the ISE, collectively sifting through over 1.8 million job applications for more than 31,000 early career positions. While it's true that the rate of graduate hiring has seen a decline of eight percent this year—reflecting the lowest point in recruitment since the pandemic-influenced drop of twelve percent in 2020—the narrative is far more nuanced.
Although the ISE primarily represents larger companies that typically bring graduates into structured development programs, wider labor market indicators also point to an overall decrease in hiring. For instance, data from the Recruitment and Employment Confederation highlights a significant thirteen percent decrease in job advertisements from July 2024 to July 2025. This suggests that students pursuing roles outside traditional training schemes might also be affected.
It's important to note, however, that the recruitment landscape varies significantly across different sectors and employers. According to the ISE’s findings, while 42 percent of surveyed businesses have scaled back their graduate recruitment efforts, a noteworthy 25 percent have maintained their hiring levels, and an encouraging 33 percent reported an increase in hiring.
Looking ahead to 2025-26, the outlook remains cautious as employers are predicting an overall reduction of seven percent in graduate recruitment. This expectation is primarily driven by significant cuts from a small number of major employers.
Shifting Focus in Early Talent Programs
It's essential to understand that graduate programs aren't the sole pathway to employment with leading UK organizations. Since the introduction of the apprenticeship levy, there has been a notable surge in investments in apprenticeship schemes. The ISE’s survey indicates that while graduate hiring has decreased, hiring of school and college leavers has actually risen by eight percent. Still, because the number of graduates consistently outpaces apprentices, the overall entry-level job market is experiencing a dip of five percent.
This uptick in hiring for school and college leaver categories is largely attributable to larger companies that pay the apprenticeship levy, demonstrating their capacity to better develop and manage these programs. In contrast, government data shows that apprenticeship starts among individuals aged 19 to 24 saw only a modest increase of 0.6 percent last year.
An interesting trend observed in the ISE survey reveals a shifting ratio: for every school or college leaver hired, there were 1.8 graduates hired—a reduction from last year's figure of 2.3. This trend is expected to persist into the next recruitment period, with forecasts suggesting a further decline to 1.6 graduates for every school or college leaver. Despite these changes, graduates continue to dominate the hiring landscape and remain a key element in the strategies of early talent acquisition.
The Impact of AI on Recruitment
The influence of artificial intelligence (AI) on graduate recruitment cannot be ignored. However, it's important to state that while AI is altering the recruitment process, it has not yet taken away entry-level positions. Students are increasingly leveraging AI to create their job applications, leading to a significant rise in the number of applications submitted—currently, the ratio stands at an astounding 140 applications for each open position.
Employers are now voicing concerns regarding the authenticity of applications from candidates utilizing AI. An interesting competitive dynamic has emerged: only fifteen percent of employers report never having suspected or identified candidates who might have cheated on assessments. In response, a striking 79 percent of companies are revisiting their recruitment processes to adapt to the implications of AI technology.
At present, about half of employers permit candidates to utilize AI tools throughout the recruitment process, primarily for drafting cover letters, resumes, and responding to application questions. Although a small fraction, only ten percent, have completely banned the use of these AI tools or implemented technical measures to restrict their use.
Data indicates that 45 percent of employers have not provided applicants with any guidelines regarding appropriate use of AI, which could serve as a valuable resource for students transitioning into graduate roles and aid employers in managing their application influx.
While students are embracing AI in their job search, the extent to which recruiters are employing AI remains limited, although this is expected to change. Currently, more than half of companies utilize some form of automated systems for testing, but true AI integration is still in nascent stages, notably seen in gamified assessments—where it's used in only fifteen percent of cases. Looking to the future, a majority of employers anticipate increasing their use of AI and automation in recruitment processes over the next five years.
Strategies for Gaining an Edge
The landscape of the graduate job market is undeniably challenging, reflective of larger economic trends—it’s a space where opportunities do exist despite adversity.
For students aspiring to stand out in this competitive arena, it's essential to remain realistic about prospects in their chosen fields. A job search should be treated with the diligence of an actual job; applications need to be genuine, thoughtful, and customized to focus on quality rather than quantity. Furthermore, practical experience continues to be vital—employers have expressed a preference for candidates who have interned or gained hands-on experience, equipping them with necessary skills.
These findings place a significant emphasis on the responsibility of universities to prepare students for a more intricate and competitive graduate market, encouraging close collaboration with industry leaders.
As organizations adjust their early talent acquisition strategies and respond to the influence of AI, universities play a crucial role in helping students develop real-world experience, adaptability, and digital competencies.
Fostering partnerships with employers, integrating employability skills within the curriculum, and guiding students on the responsible use of AI will be key to ensuring that graduates remain competitive in an evolving recruitment landscape.
So, what are your thoughts? Do you agree with the optimistic outlook that there are still opportunities within the current job market? Or do you believe that the challenges outweigh the potential? Share your thoughts in the comments!
