It is no secret that optimism is low in the UK graduate job market. We have seen a drop from 59% to 56.4% (Prospects, 2026) over the last year of graduates in full time employment, reflecting a return to relatively bleak outlooks after a brief post covid surge, around 6.2% remain unemployed 15 months after graduation. As a third-year student, I am absolutely thrilled to hear this as the feeling of being stuck between a masters and the army slowly closes in. However, at the same time, we are seeing massive skills shortages within the UK economy, predicted to cost a whopping £39 billion a year from 2024 through to 2027 (Edge Foundation, 2022). So, the question this article seeks to address is how can we be producing so many graduates we cannot find jobs, while simultaneously, we are lacking skills within our economy that many graduates should have gained at university?
When looking at the current state of the graduate market, decline is clear. Only 27% of final year students in 2025 compared to 33% in 2023 had secured a job by their final year (Financial Times). This is not a testament to the perceived laziness or unwillingness of graduates however, as the number of applications sent, as well as job fairs attended has actually seen a rise. Therefore, this is a two-pronged issue, one coming from a mixture of government failings, disincentivising hiring and UK business as a whole, and the rise of AI dismantling the entry-level (47% of UK employers reduced hiring last year). I personally believe it is the former that is not only the most damaging, but also the most solvable, as it is a sad truth that AI will cause cuts, but one which is not likely to reverse for some time. The CBI has highlighted that the recent rise in employer National Insurance costs, combined with a higher minimum wage, could undermine government efforts to boost growth. This temporary tax rise to fund excessive welfare schemes will contribute further to the £39 bn a year skills shortage looming over the economy and therefore requires immediate reversal. Easing hiring difficulties should prove to reopen positions (especially at SMEs), allowing for post-university skills development and helping graduates to get a foot in the door that they so desperately need.
Alongside this, universities themselves need to take some accountability, students who pay high fees are getting less and less support. Thankfully, within my experience, I attend a university which I feel has given me helpful provisions and careers support, but evidently something is wrong, soft skills should be a key aspect of university. Upskilling programmes should be incentivised and pushed alongside degrees at universities, to give graduates more of a sense that they are a finished article, these should be paid for through the closure of certain courses which do not offer effective enough outcomes for students on a university-to-university basis. Sector specific shortages should also be addressed through government-university alignment to make courses easier to get on to, or more affordable through grants, acting as another lever to close the experience gap.
Regarding my own personal experience, I have felt overlooked. While I do not expect everyone to give me an offer, after applying for 30+ graduate positions, each requiring its own cover letter and often online tests, I can’t say I wasn’t hoping for a bit more. For context, I am predicted a 1st in my Batchelors in IR and Politics and have previous experience working an 8-week internship doing HR in banking, as well as several other part time roles. The constant slurry of AI rejections, and job listings I couldn’t apply for, or feeling like I was two steps behind from the get-go due to diversity quotas has left me stunned. I don’t feel measured as a candidate, I feel like AI hiring and diversity quotas have left me boxed in, something I believe many others in my position have also felt. I feel like I’m competing in a system where I’m filtered out before my application is meaningfully read. The removal of the human element is where the issue lies here, many applicants would be left less disenfranchised if they had a sense that they had at least been considered. I’d also like to clarify that this is not an attack on diversity quotas, I understand their importance in bridging socioeconomic divides, I just think they require reform and serious consideration prior to their implementation so that they don’t damage the hiring process as a whole.
This all shows a bleak outlook currently, but one that with well managed reform can be solved. Job creation is a government job, skills production should be better managed by universities, and companies should take a more personable approach to hiring. University graduates are the future of the UK economy, and it is time they are treated as such. I wish anyone in my position the best of luck, and hope that opportunities will come to those who seek them.
I am extremely supportive of Mr Lanwarnes opinions, he obviously feels let down by the current hiring system employed by human resource ‘professionals ‘. This group, originally set up to organise the hiring process of organisations with a defined need, has wandered off into a pseudo scientific cul de sac. This loses sight of their actual purpose. His comments are very helpful and really asking business about their hiring process which should be firmly entrenched within the business needs.
Good article, interesting, well written and views articulated well. I do think the universities have a responsibility for the courses they offer to ensure the eventual qualifications meet the needs of the workplace.