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 this word used much more in journalism currently and this is largely as a result of the role AI is playing within business.
The economy overall is sluggish and, as a result of the increased capacity of AI and its ability to do research as well as turning out presentations with PowerPoint, the number of jobs at the new graduate level have 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and has resulted in the traditional leverage model moving from a triangle, where the bottom of the triangle has been replaced by AI, into more of a diamond shape.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 i.e. where there is significant element of judgement. 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 by 20%.
There are many factors and we cannot ignore the broad economic uncertainty, but the graduate market seems to be affected more than any other areas by the application of AI; graduate entry posts involving research, drafting, analysis, and admin 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.
It is time that HR steps up to the challenge and looks carefully at entry-level roles that can beneficially be carried out by new graduates and the management of expectation in the target recruitment groups needs to be handled with great care. Above all, we need to think creatively about the design of our workforces so that we do not lose the generation currently graduating and feeling the effects, for the first time, of AI.
Looking at the future becomes now more important than ever and pre-empting rejection by thinking creatively about the potential challenges.
