Why are so many graduates struggling to find a job?

"It's been a terrible year to graduate and find a job," said a recent headline in the Financial Times. Other newspapers have also chipped in with equally gloomy headlines, such as "Where have all the graduate jobs gone? It's a jobs desert, and it's so demoralising UK graduates exasperated by high unemployment." So why are so many seemingly well-qualified young people finding it hard to get a job? To what extent is AI to blame for graduates' labour market woes, and are the challenges facing graduates likely to get better or worse in the coming years? My guests are Sarah O'Connor, the Employment Columnist and Associate Editor at the Financial Times, and Steven Isherwood, the Joint Chief Executive of the Institute of Student Employers, a membership body that supports organisations who recruit graduates. I'm Tom Richmond, and to find out why it's been a terrible year to be a graduate, let's go inside your Ed. Welcome to Inside Your Ed, the podcast that looks inside the latest stories from across the education system in England, including primary and secondary schools, colleges, universities and apprenticeships. You can listen to all our past episodes, subscribe to future episodes, and get in touch by visiting InsideYourEd.com. Sarah, we've not been sure to have rather pessimistic headlines over the past six months or so about the job prospects of university graduates, so what have you and your colleagues at the FT learned about the scale of this problem? There are plenty of anecdotes out there from graduates who are struggling, but do we have any sense of how many graduates are finding things tough at the moment? Yeah, there's a couple of ways to try and set it in context, I suppose. One would be to compare what's happening in the UK to what's happening in other countries. I think it's uniquely difficult for British graduates. The other thing would be to set it in historical context. How bad are things right now if you're looking for a job as a young graduate, compared with, say, the last time things were really tough, which was probably just after the financial crisis, not long after I graduated. So I would say that this is a problem that is pretty widespread across lots of different economies. We're seeing that youth unemployment is ticking up in Western Europe, in America, in emerging markets. We're seeing falling levels of hiring and job adverts for younger people, really pretty much all over. Historically, if you look at youth unemployment rates, it's not as bad right now as it was in the aftermath of the financial crisis, nowhere near as bad, but that doesn't mean that it's a good time at all. I mean, the financial crisis led to surging unemployment for all age groups and big layoffs, as well as a kind of hiring freeze from major graduate employers. What's happening now is a bit different, which is that overall, if you already have a job, you're kind of okay, employers aren't laying off vast numbers of workers or anything like that. It's just that they've become very cautious about the economic situation, and the way they've responded to that is to stop hiring more people. And that means that if you're in a job, you're right, but if you're waiting to get that first foot on the ladder, it's becoming increasingly difficult. So that's why we're seeing unemployment rising among younger people, even though actually job adverts are falling for all kinds of vacancies. It's not just that employers have decided, we don't want it to hire young people. They've really cut down on hiring at every age group, but it's just that if you're not in the labour market yet, you're the one that really feels that when the kind of macroeconomy turns and employers become cautious about hiring new people. Okay, so it's not necessarily the case that we haven't seen quite significant dips in graduate recruitment before, but there may still be something different going on perhaps this time from a historical perspective. Stephen, at the Institute of Students Employers, you run regular surveys with your members. So what is your research showing you about the extent of the difficulties facing graduates? I'd agree very much with Sarah's analysis. I caveat what I say, because of course the ISC hour membership is mostly corporates, not all, and it's programmatic. So it tends to be larger organisations that actually hire students onto a structural programme, which of course can be quite different to maybe the more ad hoc bits of the labour market. And we're seeing a drop. So we saw vacancies last year fall by roughly 8%, people were predicting they'll fall by another 9% this year. Exactly, Sarah said it's not as bad as the financial crisis. It's happening at a slower pace. And I absolutely was Sarah said about all the people holding on to jobs. This phrase "job hugging" seems to have surfaced recently, which again, you see this in difficult economic times. If you've got a job, you'd less likely to take the risk of jumping into something that might be a bit more risky. So yes, I think that's particularly hitting the market for young people, those that are entering the labour market. I think the other challenge is it is different sector by sector employer to employer. Once you dig into our data, actually yes, 40% of employers cut their hiring last year, but another 30% increased it. Some decreased graduates but increased apprenticeship. So it's quite a nuanced picture, you know, by the nature of what we're doing, we have to generalise about the labour market to a certain extent. But it's very different from sector to sector and organisations within sector. So it's not that students, young people aren't getting jobs. I think it's a lot tougher for them. And not as many of them are getting job straight away either from when they leave school or university as they would do when the economy is in better shape. So it doesn't sound like there is much doubt that things are tough for graduates at the moment. So let's take a closer look then at what might be sitting behind these problems. My first thought is a very simple one. Our economy is not in a good place right now. It really struggled to grow last year in the final few months of 2025. It barely grew at all. So our graduates finding things difficult because everyone is finding it difficult to get a job at the moment. Sarah, to what extent are we really just talking about a weak labour market for everyone rather than a weak labour market for graduates specifically? Yes, I think to a large extent that's right. It is fundamentally a difficult economic climate. Not only is the UK economy struggling to grow, but there's just so much uncertainty if you're a business right now. Whether that's the US president and his tariffs, whether it's the prospect of war in various parts of the world, there's a lot going on. And so employers are nervous and as a result they're really holding back on hiring altogether. This is often written about as a graduate job apocalypse. But if you look at job advocates for young people, in general, whether they're graduates or non-graduates, you see the same story. So young people are struggling, as I said, because they're the ones who haven't yet got that first, right on the ladder. But it's tough for graduates and non-graduates alike. And I suppose, you know, maybe part of the reason that there's been a lot of focus on graduate unemployment is that it feels a little bit and I completely sympathise with this. For graduates, you know, they feel as if they've done everything right. You know, they've done what they were told to do. They went to university, they have incurred a lot of debt, they've studied hard, they've come out, they've got good grades, and still they can't get that first foot on the ladder. And so I think there's a question there about whether the sort of the social contract is under strain, you know, that this is something that was meant to boost their prospects in the labor market. And now they're coming out and finding that it's just incredibly difficult. So I think that might be why graduates in particular are getting a lot of attention. But it is true that young people in general are struggling to find work right now. Stephen, you've already mentioned things like the sectoral variation, for example, this isn't a consistent picture at all across the economy. So what reason would you pick out to say that you think graduates are having a particularly tough time at the moment compared to other people? Or would you say actually we should look at it as more of a macro problem? Do you think it's a macro problem? And I agree with this idea that the social contract is starting to fray. I don't think it's broken. I think that's too extreme because I think there are still people getting jobs and there are sections where junior through education and to work still definitely works because I think also there's the layer of student debt that's into the debates that wasn't there 10, 20 years ago. A leather market expert sitting there quote said to me the other day said there's one thing worse than being a graduate in this jobs market and that's being a non-graduate and I suspect there is truth in that. The jobs market for graduates, it's always been the case that your degree alone doesn't get you the job and it has always been competitive. It's difficult to get a really hard number on how big the total graduate market is and if I look at ISE members alone we're probably talking about 30,000 vacancies we don't get everybody's data which isn't massively different to 10 or 15 years ago. So it's always been competitive but I think it's got more competitive. You've also got this compounding effect you know an employer coming on to the market now hiring students you know the students graduating this year looking for work there's the graduates last year who didn't get a job are also in the markets there's those that decide to go and do a master's qualification and then enter the jobs market. So there is a compounding effect when you have a long term you know sluggishness in the market because it's not just one year of graduates we're talking about. So that competition is definitely a real thing and it's growing and I don't think it's going to get any easier. I think comparing back to the financial crash period which you know this might be rose tinted glasses but it felt then that we were in a cycle you know I've got enough grey hairs to work through more than one recession in my in my lifetime but there is a sense that you know you eat a certain part you know recessions end. I think the problem we have at the moment is we can't see when that grotes coming back and exactly as Sarah said this is a global picture so it's not that we can point to other areas where there's a lovely you know wonderful booming market and assume that the same is going to going to happen here. That does all paint a relatively bleak picture for graduates at the moment. This point around graduates and not graduate struggling is an interesting one to me because I suppose you could argue that it's not that surprising because the government has made it quite a lot more expensive to hire young people since they took office in 2024. We've had a very controversial hike to employers national insurance contributions. I've also had big increases in the national minimum wage as well over the past few years both this government and the previous government to put that into context in 2022. The national minimum wage for a 21 or 22 year old was £8.36. It's now £12.71 that's a 52% increase in four years so hiring graduates who often have little or no workplace experiences you were both saying has perhaps been made a lot less attractive for employers. Steven to what extent do you think the current problems facing graduates are linked in some way to these cost increases for employers? Yeah I think particularly I'm calling it the ad hoc graduate markets because again we always tend to think about graduate programs lots of graduates going to good graduate level work but it's not part of the training program. The small and medium size enterprise end of the markets. I think those businesses in particular will be looking at their cost basis particularly if they're in a tough market at the moment and that will impact hiring decisions. As we said across the board it's not just graduates it's broader hiring as well you know you've got a pretty strong business case to increase your headcane to whatever line of work you're in at the moment. I think that's probably why the ISC data is probably although it's still showing a drop not as strong a drop as in other areas of the labour market because if you think if you're running training programs you know you're quite often thinking three years ahead because you know if you take accountants lawyers or even just general management programs you are thinking about that talent pipeline in a smart organisation planning for talent properly will think actually there's an element where we have to protect that the pipeline here but it's a cost decision and I think it's really interesting you mentioned the national minimum minimum way to when we look back over the last 15 to 20 years and graduate salaries they have not kept pace with inflation and I think when we talk about the graduate premium graduates historically have not been price sensitive in terms of salary yes employers have to be competitive but if you've got a limited salary budget you're probably going to make sure you you invest in the people you've got to retain them and if the graduate market is not price sensitive that's probably where actually you're less likely to put a straight salary budget so you add that into the mix of what's happening in terms of an eye contributions etc that you've already made and and again it just paints that broader picture of this being a tough hiring climate from an employer perspective Sarah what's your verdict on this do you subscribe to the view that it might just be becoming too expensive to hire graduates or is that too simplistic I don't think that the minimum wage increases will be impinging massively on graduate recruitment just yet because the minimum wage has been going up very sharply as you say but the minimum wage will be more impacting on sectors which employ a lot of people you know right at the bottom of the waste distribution so retail distribution hospitality now those might well be jobs that young people do in fact they are jobs that young people do they're typically either jobs that non-graduates do or their jobs that graduates do in their holidays or while they're waiting to get their first graduate position I mean that said the minimum wage now is rising so quickly that it is beginning to impinge on those bottom rungs of the of the kind of the white color graduate workforce so that might start to be more of a story in future years you know I do talk to employers of graduates who are starting to say oh blimey we we now need to start paying attention to these rules around the minimum wage we need to think about whether you know if we do a salary sacrifice scheme whether that might actually be problematic in terms of accidentally breaching minimum wage rules but I think that's something that's only just beginning to happen now but as Stephen says I mean really that is a good reminder that although you know as we said before after the financial crisis employment levels did rise what didn't really happen for graduates was that paid didn't really rise you know it's been a terrible decade and a half for graduate salaries in real terms I'm sure that has a lot to do with the fact that the supply of graduates has been increasing massively but yeah that does mean that actually you're not getting paid that much more in real terms as a graduate now what you might be getting paid a lot less in real terms as a graduate now than you were 10 or or 15 years ago some of those graduate salaries are pretty much unchanged in nominal terms which is kind of shocking when you think about it so in that sense things haven't been great for graduates for quite a long time I would say well if things haven't been great for a long time for graduates let's have a chat about AI because it's possible depending on which newspaper either things might be about to get even worse I've seen lots of commentary on this idea that AI and graduates and employers there's something changing here which is making things particularly tough for graduates Marco Amitrano who's a senior partner at PWC UK the consultancy giant recently announced a reduction in their graduate intake and he's singled out the impact of AI saying that the jobs at risk from AI were "growing at a slower pace the nose would lower exposure" Carl Benedict Frey a professor of AI and work at the Oxford Internet Institute has said quote "the labour market for new graduates has been weakening for some time partly due to rising economic uncertainty but we now have compelling evidence that AI has made the situation significantly worse in a world where AI can handle much of the entry level work from preparing polished PowerPoint presentations to document review and financial modeling firms have less incentive to invest in young employees who might later be poached by rivals Sarah what do you make of these claims about the impact of AI on graduate jobs can we say for sure whether or not AI is destroying graduate jobs as some of these quotes might suggest if this isn't too annoying I think the answer to that is both yes and no so I'll start with the yes I think the yes would be that clearly there's a very sort of intuitive connection here between the sorts of everyone now has sort of had a couple of years under their belt of trying out some of these new generative AI models and it's clear that the sorts of tasks that they're quite good at are indeed the sorts of tasks that junior graduates often are asked to do whether that is cleaning data in the spreadsheet or preparing a PowerPoint presentation or if you're a junior lawyer kind of passing through contracts and and checking for changes and all that sort of thing and so intuitively it makes sense that if there is going to be displacement by AI that it would be those junior roles that take the hit first I think that a lot of employers a lot of conversations in the boardroom are convinced by this and they they think that surely you know AI in the next few years will be good enough that we probably won't need as many people and probably we will start to see massive productivity gains probably this does mean that it's a good reason given that we're already concerned about the macroeconomic climate it's sort of a good reason to press pause on hiring for now or to be a bit more cautious about how many people to hire or to be a bit more cautious about you know the security of those contracts but to me that's a kind of vibes based theory you know this is basically a sort of decisions being made in anticipation of AI being able to do these jobs the actual reality from what we can tell is that we don't think there is huge amounts of evidence yet for that kind of like for like replacement of you know right here's a whole cohort of graduates that would have been hired by an investment bank or a law firm or a management consultancy that now haven't been hired because actually they've deployed a whole load of AI agents that can do exactly the same work as them we haven't actually seen that either anecdotally you know I haven't heard any employers say that to me nor have I seen evidence that AI agents are actually sort of capable of being autonomous in that way from what we can tell they still need a lot of babysitting they need a lot of checking and they need people with a certain amount of expertise to meet the most of them but also so my colleague John Bermurdo can I write a weekly newsletter I'll get in a quick plug now it's called the AI shift and you can receive it in your inbox if you want every Thursday if you're an FT subscriber we got hold of a sort of database of millions of job adverts from about six different economies which is provided to us by a lightcast which is a company that sort of compiles these things and we tried to look to see if we could see evidence in the data of AI linked drops in hiring rates and what we really see is we can't see a huge difference between jobs that seem more exposed to AI or less exposed to AI once you take account for the fact that the sorts of companies that have been pulling back on hiring in general because of rising interest rates and the worsening macro environment are indeed the same sorts of companies that are quite exposed to AI so you're talking about technology firms you're talking about professional services firms and actually if you look in the data at when did all of those companies change their hiring patterns and become much more nervous about hiring it actually tracks much more closely to when interest rates started to rise in sort of early to mid-2022 rather than when that GPT came out and we all learnt what large language models were which was more like the end of 2022 so our view is that in terms of the actual practicalities we don't think that graduates are being replaced on mass by AI but we do think that the the general sort of vibes and uncertainty about AI and some of the hopes that CEOs and CFOs have about the gains that might come in the future are probably adding to the general difficulty that young people have in persuading someone to take them on right now fascinating Stephen what have you been hearing from your members about how they are adjusting if at all to the role of AI in the workplace do you think that graduates are becoming less important to overall recruitment strategies from what you're hearing I would echo what Sarah says I mean obviously you just bet what we do to ask employers and say you know how is AI impacting your hiring and development strategies and they echo what Sarah has said nobody said to us we are cutting our hiring because of AI they blame the economy but they do say very strongly they're looking at it they're not in denial and absolutely questioning what actually do development programs need to change will roles change in the future and what will AI's impact on that be and I think again this is where we get to a sector by sector analysis and also an organisation by organisation analysis you know I was talking to a tech company not so long ago you said you know we're very active in selling our AI solutions to our clients but we are absolutely selling you don't buy the AI solution you buy the consultants with the AI that you absolutely go hand in hand so yes there's lots of talk about it and I do occasionally you know here hiring managers say oh I'm getting pressure on do I need to hire people on a permanent contract you know should be should they have a two-year time horizon you know that kind of conversation that quite quickly gets pushed back on because you still want to hire good people to show you're you're investing in them the other thing that I would say I was talking to a labor market expert in the in the states and I asked the question because the headlines have been stronger in the US around AI impacting jobs and he was very cynical to be honest with you he said actually sometimes AI is being used in excuse because the organisation would rather say that than admit they're having a tough time in reducing hiring because of that so yeah I do think there's an element of yeah we need to sort of dig into the detail when when we hear some of these some of these reports coming through from organisations okay so it doesn't sound like either of you necessarily convinced AI is transforming things at a large scale for graduates but one area where it does look like we are seeing some changes potentially is around job applications because it feels to me like we might have inadvertently entered a bit of an arms race here graduates can now produce more applications than ever before by using AI to write covering letters and even online applications in response some employers are reporting generally larger ones to be fair that they have apparently started using AI to sift through all these job applications because they just can't deal with the extra volume coming through the door so we essentially have AI products talking to AI products without a human being insight Stephen I know you've been monitoring these sorts of trends so what do we know about how AI is changing the behaviour now of employers and graduates and if it is changing whether that's leading to better or worse outcomes for the graduates and the employers so let's look at this from two angles one is the student use of AI the applicants and also the employer use and I'll take the employer bit first on the whole employers tell us they're not using AI in the recruitment process they're not using agent to AI we did some detail work on this in the round to Christmas minimal you know less than 10% usage we were able to detect now I think often you know whether it's students or not students or private dogs think that it's AI that's actually assessing them but it's technology and technology has been a feature in recruitment for for quite a long time now so you know the testing the exercises an applicant might do but the early stage of an application process yes technology and algorithms are involved but it's it's almost negligible the management employees who tell us that they're actually using a agent to AI in that process and without diverting down a whole technical recruitment rabbit hole there's legal issues around that there's cases running at the moment that are making employees nervous about deploying that kind of technology there are internal concerns within organizations around the risk of deploying AI on data etc because part of it is if your AI system is making decisions that are changing day by day applicant by applicant is how do you justify you've made a fair decision so there's all sorts of challenges at that and again it's not to say it's not coming there's lots of products being worked on and there's lots of development and I think we will see its deployment in the graduate market what we found that's really changed things is graduate's use of AI and often that's not necessarily an obvious use of AI because again if you're if you're using a recruitment system you're asking for application forms rather than CVs you know you've got some sort of testing process so AI can't necessarily do that automatically but I'll give you an example I was talking to a pharmaceuticals company the other day and they said at the moment because they use video interviews as part of their process he's got a team of recruiters you know looking at 500 first interviews that have been done by video and he said they all say the same all the candidates because they're using AI as they're doing the video interview most video interviews give you 30 seconds to rethink your answer if you think you've got it wrong well you can plug that into an AI system to quickly rethink and as we all know they are one of the challenges it produces vanilla responses so that's giving a real headache for employers so you've got two things you've got the use of technology which is making it easier I guess for graduate to do a more professional application you've also got exactly what been talking about a tough economic climate which means it's more competitive the more graduates are applying for jobs so and this is a real change we have seen in the market so the last two years the average applications per vacancy and employers receiving is 140 but if we take that average compared to pre-COVID the average applications per vacancy was around about 70 or 80 you go back 20 years it was 40 applications per vacancy so that is a real challenge it's a challenge for the students having to make those number of applications you know just to keep going in the process that's demoralising lots of rejection it's also a massive headache for employers because you know you've got to deal with those volumes and it costs time and money to deal with those volumes so I wish I had a magic bullet and I know as included I was scratching our heads on this because at the moment it doesn't work for either party and I think we do end up in a danger where AI does end up talking to AI exactly as you said and it's really interesting just one last comment which is actually we're seeing more employers putting more of that personal intervention the face-to-face interview back into the process where some of that went away through COVID because it is making sure the person who's going to you know join your organisation on day one is the person you think you're you're hiring so we are seeing that creep into the process so it will be interesting to see how that develops Sarah what's your view on the impact of AI on graduate searching for a job is it all a bit gloomy in terms of the possible loss of human interaction or are you seeing any potential upsides to some AI fueled innovation in this space? No I think it's been pretty much an unmitigated disaster and I would also just push back certainly on your framing tone because I think you sort of said students and job applicants have started using AI and then employers have started having to use automated systems in response actually I think it was the employers that started this one and I have a huge amount of sympathy with the job applicants so over the last 10 years we've seen lots of new technology applied to the recruitment process and as Steven says that's not AI as we would now understand it but from a job applicants perspective it's still something that is basically taking the human connection out of the process so we saw CV screening tools where you know an automated algorithm would screen CVs for keyword and that sort of thing we saw the growth of these asynchronous video interviews which Steven just mentioned where rather than getting to actually talk to someone at the employer where you can ask some questions and you can read someone's facial expressions and get a sense of whether you're on the right track and you're saying the right sorts of things you know you just have to sit and stare at your webcam and say things and hope that you're saying the right sorts of things and often get very little if any feedback at all at the end of the process we saw the growth of people being asked to play sort of short online games which purport to reveal things about their personalities you know their propensity to take risk or to be able to read people that sort of thing and my sense from talking to young people over the years was that they found these things deeply demoralising dehumanising and very very time consuming and so I think it should be no surprise at all that large language models came along and suddenly they had the capacity to fight fire with fire that they did so and that's not to say that where we have ended up is a good place I mean yeah as Steven says it's now not working for anyone so you have young people feeling that they have to fire off more and more and more applications to get seen at all and feeling as if they're just you know invisible you have employers completely overwhelmed by applications and now they're really struggling to find the signal in the noise you know there's just there's such a volume of applications and so many of them are so similar that it's really hard now to tell who are the best candidates and we started to see some research that suggests that actually meritocracy is taking a bit of a blow here because actually the best people and no longer rising to the top because if you have candidates who aren't actually very good they can still come across as quite good based on these AI tools and then one final point would be that you're potentially introducing some new unfairnesses into this because if you're using a paid for AI tool you might get a better outcome than if you are not using a paid for AI tool and we know that not only people from higher socio-economic backgrounds are more likely to pay for a pro version of something like chat GPT but also men use these tools much more than women particularly in recruitment processes from what we can tell so we're potentially sort of creating all kinds of new biases and messes here so I think it's a complete disaster I'm afraid I don't see any upsides at all at the moment I agree with that Sarah there's one long-term trend that also does impact this and it talks to that rise in the use of technology in terms of recruitment you know back when I started in this game you did use numerical test et cetera but they were paper based that's how old I am so you tended to use those an assessment center because you've got to get somebody in a room you've got to pay for this test whereas actually you can deliver those online now and it's interesting that point about meritocracy because I agree with Sarah's point around there's meritocracy risk here but actually using those tests online originally was supposed to improve employers ability to make sure they're selected the right candidates because before then employers used to be much more arbitrary around who could apply in the first place so again if you look at the ISC data the number of employers who say you need X number of UCAS points are you two A's in a B before you can even apply that's roughly 10% whereas 15 years ago it was about 40% did that you know the two on used to be the cutoff point it still is a very common cutoff but you know whatever it is 78% of students get a two on nice actually that doesn't really exclude many and there's all other thing in the UK and this is a very UK specific thing is employers rarely say you have to have X degree to apply for this job you know you can be annoying accountants et cetera without a relevant degree which is quite different in other in other countries so all that combined means and actually if you're a student on the one hand you've got a huge amount of choice but of course if everybody can apply for everything A) how does a student choose where to direct their efforts and how does the employer rationalize some of those applications in a fair way so it's not all technology that's causing this there's some there's some other forces that that we need to factor in and yeah I agree what Sarah saying it's what the solution is going to be I don't think anybody knows yet we're also trying to work it out yeah I mean I was maybe being slightly unfair to the employers earlier because you're quite right you know part of the reason that they started to use a lot of these new automated and online technologies was because it was more efficient and more cost effective but I think there was genuinely also a desire to widen the application pool and to find candidates based on their abilities rather than on their CVs what school they went to what university they went to you know there was a real sense that this is a moment where we can use technology to kind of find some sort of pure signal about merit rather than relying on these old sort of signifiers many of which will favor people from better off socio-economic backgrounds but the great irony of course is that now because employers are so overwhelmed because they can no longer tell anyone apart what I hear anecdotally is that some employers are going back to those old signals of quality and so you're seeing more people I heard about an employer who which decided to only post their job advert on the Oxford University undergraduate jobs board because then they'll get far fewer applicants and they have some reassurance from the fact that these people are all at Oxford that they're probably quite bright and that's terrible for social mobility and all of those aspirations that employers had 10-15 years ago it's a tragedy in a way but it's yeah it wasn't all done with bad intentions by any means okay we are approaching the end of this episode so it's time for one last question from what I've heard today there are good reasons from what you've said to think that graduates job prospects are in pretty bad shape at the moment even if many graduates are still managing to get a foothold in the labour market but there are clearly lots of moving parts here we have a struggling economy we have government policy evolving all the time we have one million young people not in education employment or training we have graduates and employers experiment with AI as you both been describing and much more besides so my question is looking into your policy crystal ball do you think the situation facing recent graduates is going to get better or worse over the next 12 months Stephen is life going to be easier or tougher for graduates in 2026 I think it's going to be tougher two reasons one I didn't see any economic growth on the horizon and I think that's going to be the the most immediate thing that makes a difference to prospects for graduates for young people and I think the other challenges as I mentioned earlier that compounding effects last year's graduating population fewer of those will have got a job than will have done normally so they're in the jobs market then you've got a new chance of graduates coming through and that builds over over time one of the things that worries me I genuinely can't remember who did the research but it was post financial crash and one of the challenges when when young people enter the jobs markets in a difficult period a lot of them start on the career ladder lower than they would have done otherwise and this piece of research showed that they rarely catch up their progression will stay the same as a cohort that graduates in a good year but the progression rates kind of stays at the same level so that for a long time they're there a step behind so I think there's some some real concerns even if we do get some magic growth that comes from somewhere pretty quickly there is a danger that I hesitate to use the word loss generation that sounds a bit inflammatory but definite challenges with that thank you Stephen Sarah are things going to get easier or harder over the course of this year for recent graduates I feel the need to be a bit more upbeat after listening to that first even let me see what could the counter argument be I mean I agree that it's not obvious that economic grace is going to bounce back I hope that some more forward thinking employers might realize that this is an absolutely phenomenal time to hire some brilliant young people because there are plenty of them available and they're they're really hungry to work and they are the ones you know a lot of employers are bemoaning the fact that their employees don't seem to have AI skills and aren't really embracing this brave new future actually we know that young people are the the biggest users of LLM's they've been using them for years now in their studies and they're probably people who will be able to show the rest of the workforce how to use them and how not to use them so hopefully there will be some enlightened employers out there who realize that this is a good moment to hire some really bright people if not I mean I was speaking to a young guy recently who's completing his MBA who said that he'd realized that actually what many of these AI tools do is make it easier to start out on your own actually that maybe the answer isn't to sit and wait in a queue with thousands of other people to try and get a job at you know one of these investment banks or one of these law firms but to band together with some other bright young people use the coding tools and the fact that you can do your marketing for so much less and set up a website without needing to hire a load of people anymore and actually just kind of do things for themselves now whether or not that will work I don't know but I thought that was a nice kind of empowering idea that you don't just have to wait for things to get better maybe you can do you can do something for yourself and who knows maybe in the future you'll see some of these young people set up some nimble startups that can undercut these old incumbents who refuse to hire them when they had the chance. Thank you Sarah and that brings us to the end of this episode a huge thank you to Sarah and Stephen for helping us analyse the challenges facing graduates in today's jobs market. If you enjoyed this episode then please do share it with others and leave a good rating wherever you get to your podcasts and don't forget to hit subscribe to make sure you join me when I next go inside your head. Bye bye for now.