It is very obvious to me that the age groups that we have been seeing in coaching in the last few months has reduced. This is not chance, but a sign that new graduates and second jobbers are finding the graduate market extremely challenging as the number of roles available are diminishing. This is going to have enormous consequences. It does not take reading much of the Press to realise that the workforce is generally reducing and this is especially obvious in consultancy at the new graduate level. The reason for this is job cuts driven by the introduction of AI. McKinsey talks about a 43% reduction in graduate jobs since 2022 and those who have been working on AI are the very people who are being victims to it - that is to say, the disruptors are becoming the disrupted.
Rightsizing has always been a common name for restructuring, but we are seeing it more prevalent in current journalism.
The economy overall is sluggish and as a result of the increased capacity of AI and its ability to do research and turn out presentations using PowerPoint increases, so too have the number of jobs at the new graduate level been decreasing. The ‘Big Four’ pronounce a 44% drop in roles this year with PWC talking about a 6% reduction and KPMG a 29% reduction. The head count at the junior level is reducing and has resulted in the traditional leverage model moving from a triangle, where the bottom of the triangle has been replaced by AI, into more of a diamond shape. This means that middle managers are doing the work that thus far AI has not been able to do where there is significant judgement element. It is far cheaper to use AI at the graduate level, and this has been understood very clearly by the private equity arena. Overall, graduate job openings are down 20%, with the highest receptions in law, consulting and tech.
There are many factors and, indeed, we could not indeed ignore the broad economic uncertainty, but the graduate market is certainly affected more than other areas by the increased capacity and still increasing capacity of AI. Graduate entry jobs such as research, drafting, analysis, and administration are being done by AI. The effect so far is simply factual, but the psychological effects are going to be significant. It was not by chance that one of the headlines at the One Young World Summit in Montreal last year was “Artificial Intelligence”. Although we are beginning to speak about this, it is early days and we will be undoubtedly seeing the effect becoming a potential crisis as overall rejection numbers go up, which in turn destroy confidence and therefore affect all sorts of issues such as social mobility, identity, team working, the career ladder, generational trust, and corporate suspicion.
We cannot fail to be aware that HR must step up to the challenge and look again at entry-level roles so that they still exist, though in a different form, and consider carefully the management of expectation in different target groups, not to mention thinking creatively about workforce design. We could easily take an “It’s not my problem” approach, but if we do not apply ourselves to this, we are losing the potential of at least a whole generation.
As always, looking at the future must begin as soon as possible and pre-empt with creative thinking, the potential challenges.
