Graduate vacancies hit record low as costs rise and AI cuts entry‑level roles

The UK graduate jobs market has slumped to a record low, with vacancies falling 45.6 per cent to 8,383 in the year to July, according to recruitment platform Adzula. The decline eclipses the previous trough set in May and continues a downward trend that began when more than 55,000 graduate roles were advertised in mid‑2017.

Cost pressures and AI replace junior posts

Employers cite the recent increase in Labour’s national insurance contributions and the planned removal of age‑based wage bands as key factors dampening hiring. At the same time, the rise of AI is prompting large City firms, especially the Big Four consultancies, to automate routine administrative tasks that once went to fresh graduates. KPMG, for example, cut its 2023 graduate intake from 1,399 to 942 places.

Andrew Hunter, co‑founder of Adzuna, warned that the market is not merely experiencing a temporary dip.

"The graduate job market also keeps setting new lows, which tells us employers still haven’t found a reason to open up hiring at that level," said Hunter.

Non‑graduate entry‑level positions are shrinking as well, with vacancies down eight per cent to 192,864 in the same period, reversing earlier gains. Overall job listings across the United Kingdom fell 9.6 per cent to 791,490, pushing the competition ratio to 2.14 candidates per vacancy, up from 1.93 a year earlier.

What the slowdown means for the labour market

Salary growth is cooling; the average advertised pay slipped 0.73 per cent since May to £43,675 in July. Employers are also taking longer to fill roles, with the average time to hire rising to 36.5 days from 35.4 days in May. The Chartered Institute of Personnel and Development recently reported that the UK jobs market has "largely stopped moving," describing a "low hire, low fire" cycle that could only be broken if Burnham addressed employment costs.

While sectors such as teaching, travel, trade, construction and now manufacturing are still adding roles, the list of industries offering new graduate positions remains short. If cost pressures persist and AI continues to automate entry‑level work, the competition for the remaining spots is likely to intensify further.