Britain’s graduate jobs market has fallen to a record low, with vacancy numbers collapsing as firms grapple with rising employment costs and the growing use of AI in entry-level roles.
The number of graduate vacancies in the UK dropped 45.6 per cent to 8,383 in the year to July, according to recruitment firm Adzuna, undercutting the previous low set in May.
The decline represents the continuation of a long deterioration in graduate hiring, with the market a shadow of its former self compared to mid-2017, when more than 55,000 graduate roles were available.
Employers have grown increasingly vocal about the impact of Labour’s hike to employer national insurance contributions and its plans to scrap age-based wage bands, which many say have dampened their appetite for new hires.
Major City industries including tech and consultancy have been scrapping entry-level positions for several years, redirecting administrative tasks previously handled by junior staff toward AI tools instead.
The Big Four consultancy firms have led this retreat, with KPMG cutting its 2023 graduate intake from 1,399 to just 942, a significant reduction that signals a structural shift rather than a temporary pullback.
“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 Adzuna co-founder Andrew Hunter.
The findings align with a separate report published last week by the Chartered Institute of Personnel and Development, which concluded that the UK’s jobs market has “largely stopped moving.”
Britain has become locked into a “low hire, low fire” cycle which could be broken if employment costs were addressed, the HR industry body said.
The squeeze is not limited to graduate roles, with Adzuna finding that non-graduate entry-level vacancies also fell eight per cent to 192,864 in the year to July, reversing gains made earlier in the year.
Across the broader UK labour market, total vacancies dropped 9.6 per cent to 791,490 in the year to July, with more than 2.14 people now competing for every available role, up from 1.93 the year prior.
Salary growth is also losing momentum, with the average advertised salary falling 0.73 per cent since May to reach £43,675 in July, adding further pressure on workers navigating a tightening market.
Roles are taking longer to fill as well, with employers now waiting an average of 36.5 days to secure a new hire, compared to 35.4 days in May.
“July’s numbers are a step backwards, not a blip,” Hunter said, noting that teaching, travel, trade and construction and manufacturing are still adding roles, but warning that “everyone outside of these sectors is having a harder time than they were three months ago.”