What’s happening with the young? The impact of AI adoption on early careers.
Our new LEADINGThought series has been tracking AI adoption and its impact on the human workforce. Early research on the pace of AI adoption and its impacts is unsurprisingly mixed, and occasionally contradictory. But the impact on junior employment has been highlighted consistently.
Research at Harvard and Stanford [4,6] has shown a drop in junior staff hiring into AI-exposed occupations, and within AI adopter firms has been cited as the reason for declining employment of junior staff rather than exits. Data from the Harvard study also demonstrates that while junior employment in adopting firms declined sharply, senior employment continued to rise.
While it’s too early to say how these developments are reshaping careers more broadly and how junior but also senior staff will begin to adapt, it is worth considering the shift that is occurring and exploring the implications for younger generations. GenZ’s resilience was tested during the pandemic and has had significant consequences on wellbeing – which is at an all-time low.
Nevertheless, they appear to be the generation most likely to be uncompromising in their pursuit of autonomy, while adapting to the technological shifts by developing side-hustles while in full-time roles or building a portfolio career. According to Randstadt’s 2026 Workmonitor 45% quit a job that didn’t fit with their personal life, and among those employed full-time 31% would prefer combining a full-time role with a ‘side-hustle’. This rise of ‘self-defined success’ means that despite economic volatility, autonomy drives loyalty [12].
So, how are these developing trends disrupting traditional labour market and career structures for early careers.
What about the graduate premium?
There’s fierce competition in the graduate market. In 2023-24 the average UK employer received 140 applications per graduate vacancy – a 59 per cent increase over the previous year, according to the Institute of Student Employers (ISE) [8].
The US Bureau of Labour Statistics estimates that about 60 per cent of new jobs will come from occupations that typically do not require a degree. As AI takes on white-collar work, a job that involves ‘working with your hands’ is fast becoming the best alternative to knowledge work.
Nevertheless, those without a degree appear to be having a more difficult time, yet the traditional academic route no longer guarantees landing a graduate-level job.
While it’s still early to assess what this means longer-term for career progression, early research data from Harvard shows declining rates of promotion amongst juniors post-2022 for those firms who have adopted AI.
Whatever the uplift to earnings from having a degree, it seems to have narrowed. Several studies suggest that the graduate premium – or the excess income earned by a graduate over their lifetime – is shrinking. Data from the Department for Education (DfE) shows that for graduates aged 21–30 the premium over non-graduate pay fell by one-third between 2007 and 2024. Even more alarmingly, the data shows that real median graduate pay for the 21–30 age group dropped by 9% over this period [3].
Opportunity shifts
Over the last two decades we have witnessed significant shifts in ‘sectors of choice’ for graduates – from banking to consultancy to technology. With the developments in AI technologies, the biggest opportunities are now expected to be found in occupations that don’t require a degree.
According to Anthropic’s Labour Markets report [1] the least AI exposed professions[1] include Cooks, Motorcycle Mechanics, Lifeguards, Bartenders, Dishwashers, and Dressing Room Attendants. Anthropic are tracking data on entry to new roles rather than unemployment, and they report a 14% drop in the job finding rate compared to that in 2022 in the exposed occupations, although this is just barely statistically significant.
In the UK, the demand for graduates has shifted to so-called priority sectors such as civil engineering, construction, and social care, among others, according to Skills England. These jobs are forecast to grow by 15 per cent by 2030.
Opportunities within fast-growing start-ups have been highlighted as a potential direction for younger generations, but evidence from employers highlights the mismatch between the skills needed and the skills on offer, with curricula not addressing employer needs and too many graduates having an overly theoretical education.
Talent still matters
A re-think of how work and workers are defined led to both Deloitte and PwC to re-think titles and develop skills-based descriptors that best reflect the expertise and the work that they carry out for their clients. PwC will continue to hire and invest in entry-level staff and help them develop the judgement needed to do client-facing work [7].
The reported drop in junior hiring, hides differences in the early careers mix. For example, according to the 2026 Skills report by the UK Financial Services Skills Commission, while graduate hiring went down by 2%, apprentices hiring has gone up by 5% [2]. The change in mix and rebalancing early careers hiring is demonstrated in the ISE survey results, with 60% of members reporting evidence of rebalancing. While this varies by employer, on average rebalancing employers reported a 21% reduction in graduate hiring and a 12% increase in school and college leaver hiring [9].
While corporate pyramids may be shifting into a diamond, with reduced levels of hiring at the bottom, building pipelines still matters for business and society, and therefore how to support young people should remain high on the agenda. Employers are highlighting the increasing focus on “human” skills such as communication, empathy, emotional resilience and the ability to handle change. But at the same time, the rise in ‘self-defined’ success means that traditional signs of disengagement may no longer apply — and retaining top talent will require clearer, faster career pathways aligned with personal purpose, not just performance [11].
A recent report by the Institute for the Future of Work in partnership with the EY Foundation [3], has focused on how our motivations, that is doing things because you really enjoy them, are critical for demonstrating creativity, initiative, collaboration, and resilience – traits that are increasingly important in this rapidly changing world of work. A focus on motivation is crucial to addressing the increasing numbers of young people at risk of becoming ‘NEET’, and could also be key to filling skills shortages, and building towards better productivity and growth.
Where next for early careers?
A picture is slowly emerging of how employers are rethinking early careers, as they adapt to AI adoption. Continuing to offer good work opportunities to young people is critical for business, the economy, and society. But also recognising that the experiences of younger generations are re-shaping their expectations and how they think about employment.
This inevitably means that workplace approaches and practices developed throughout the latter part of the 21st century are fundamentally changing. Yes, we are reaching the point of no return.
Resources
Anthropic Labour Markets Report 2026.
Annual Skills Report. Skills gaps: a moving target. Financial Services Skills Commission, March 2026. https://financialservicesskills.org/research/
K. Brewin, J. Geisler, J. Halstead, R. Moffat, O. Nash, Channelling Motivation - How intrinsic and internalised motivation can support new pathways for young people from low-income backgrounds to thrive in a rapidly changing world of work, London: Institute for the Future of Work, February 2026 DOI: 10.5281/zenodo.17244024.
Brynjolfsson, E., Chandar, B., Chen, R. Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence (November 13, 2025). https://digitaleconomy.stanford.edu/app/uploads/2025/12/CanariesintheCoalMine_Nov25.pdf
Graduate Labour Market Statistics. Department for Education (updated 11 March 2026). https://explore-education-statistics.service.gov.uk/find-statistics/graduate-labour-markets/2024.
Hosseini Maasoum, Seyed Mahdi and Lichtinger, Guy, Generative AI as Seniority-Biased Technological Change: Evidence from U.S. Résumé and Job Posting Data (August 31, 2025). Available at http://dx.doi.org/10.2139/ssrn.5425555
PwC report. The Fearless Future: 2025 Global AI Jobs Barometer.
Raval, A. The great graduate jobs drought. Financial Times, Jan 2026.
Skills England. Assessment of priority skills to 2030. https://www.gov.uk/government/publications/assessment-of-priority-skills-to-2030/assessment-of-priority-skills-to-2030
5 trends you need to know from ISE’s Recruitment Survey (22 October 2025). Institute of Student Employers. https://ise.org.uk/knowledge/insights/498/5_trends_you_need_to_know_from_ises_recruitment_survey_2025
The Gen Z workplace blueprint: Future Focused, Fast Moving. Randstad 2025.
Workmonitor 2026: The great workforce adaptation. Randstad.
[1] Observed Exposure is meant to quantify – of those tasks that LLMs could theoretically speed up, which are actually seeing automated usage in professional settings.