One of Britain’s biggest graduate employers is hiring 200 fewer university leavers this summer, citing the economic slowdown as “the single biggest factor”.
Marco Amitrano, senior partner at PwC UK, said the consultancy giant, would have 1,300 joiners over the next 12 months, compared with 1,500 over the same period last year. PwC has been No 1 in The Times Top 100 Graduate Employers for 17 of the past 27 years.
He singled out artificial intelligence (AI), saying jobs at risk from it were “growing at a slower pace than those with lower exposure”. The gap between the two was widening, he said. The fall in PwC’s graduate recruitment is equal to an annual drop of 13 per cent.
Other research shows graduates are facing one of the worst job markets in a generation: vacancies are forecast to fall for an “unprecedented” fourth year in a row.
The number of graduates whom companies plan to hire next year will fall to the lowest level since 2012, based on the research by High Fliers, which conducted 15,000 face-to-face interviews with students at 30 universities who graduated this summer. Martin Birchall, managing director of High Fliers Research, which has been monitoring graduate recruitment since 1995, said: “This is one of the most difficult periods for young graduates in the last 30 years.”
Graduates who have just left university are competing with last year’s cohort, who have still not found a job in their preferred career. Many are doing a mix of internships and short-term work, including non-graduate jobs such as pub and restaurant work.
He said: “Up to 50 per cent of those who are recruited for graduate programmes are previous years’ graduates. So graduates are competing with people who have built up a year or two of work experience or short-term jobs that place them in a better position.”
Before the budget on November 26, PwC is calling on ministers to prioritise “credible cross-industry policies to reduce costs, attract overseas investment and support the skills needed for tomorrow” so companies can return to higher levels of hiring and investment.
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Amitrano said: “PwC will always be a large UK employer and training ground for young people. But the way we do things is changing. Our entry-level intake is lower this year — understanding why is key to growing opportunities for the next generation, both at PwC and elsewhere.”
Overall, accounting and professional services companies are among the hardest hit in graduate recruitment. Having recruited almost 6,500 graduates in 2023, there are expected to be fewer than 4,500 graduate vacancies in the sector next year, according to High Fliers.
James Reed, chief executive of the Reed recruitment group, said the number of jobs for graduates on its website had fallen to less than a third of what it was in 2021.
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He said: “Our data shows there is a severe jobs drought with graduates hardest hit, thanks in part to the advance of AI and the tendency to offshore entry-level jobs. We may be going into a period of very major disruption in the UK jobs market over the next five years, not dissimilar to what happened in the 1980s for a lot of blue-collar workers, except this time it’s white-collar jobs that are being affected, with graduates bearing the brunt.”
According to High Fliers, vacancies for those who have recently left university will fall for the fourth consecutive year next year.
Birchall said: “We have seen previous falls in graduate recruitment over one or two-year periods but not four. There was the worldwide recession in 2008–09 and another dip after Brexit, then the pandemic, but it always went straight back up. This now looks like a sustained downturn as a feel-bad factor seems to be consuming the country. It is unprecedented to have four consecutive years of declining graduate vacancies, particularly as the UK isn’t in a recession or national emergency.”
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The research, collated in the past month, shows that opportunities for new graduates at the country’s leading employers such as banks, publishers and retailers, have slumped by almost a quarter since 2023. Graduate recruitment is predicted to fall in 12 of 15 key industries and business sectors in the next 12 months, with the biggest drops expected at oil and energy companies, consulting firms, media organisations and employers in the banking and finance sector.
Carl-Benedikt Frey, a professor of AI and work at the Oxford Internet Institute, said: “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.
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“In a world where AI can handle much of the entry-level work, from preparing polished PowerPoint presentations to document review and financial modelling, firms have less incentive to invest in young employees who might later be poached by rivals.”
High Fliers, which also compiles the Top 100 Graduate Employers list, found that final-year students had made a record number of graduate job applications, an average of 21.7 applications each, up from 12.7 in 2023. Despite this increase in applications, the number of students who achieved a definite job offer dropped to its second-lowest ever level of 27 per cent.