Graduates entering the workforce are facing one of the toughest hiring climates in more than a decade, with fewer entry-level roles available and competition intensifying across multiple cohorts.
Many candidates who finished university in recent years are still searching for their first permanent role and are now competing directly with the latest group of graduates and those applying in their final year. The result is a crowded market where even strong academic results are no longer enough to secure a place.
Applications are rising quickly while opportunities contract, leaving growing numbers of graduates taking temporary work, internships or roles outside their chosen field as they try to gain a foothold.
New data from High Fliers, a market research company that tracks graduate recruitment among the UK’s largest organisations, shows that hiring by leading employers has dropped by almost a quarter over the past three years, reaching its lowest level since 2013.
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Record competition as applications surge
The squeeze is being driven by a sharp increase in applications at the same time as intake falls. High Fliers reported that graduate job applications have doubled since 2023, with several years of candidates now chasing the same roles.
Martin Birchall, managing director of High Fliers Research, said the backlog of applicants had created a difficult cycle for both candidates and recruiters, explaining that three years of reduced hiring had led to a build-up of jobseekers. “We now have three years of graduates looking for jobs, so the number of applications per vacancy goes up and it becomes a really tricky spiral,” he said.
The pressure is reflected in public sector recruitment. The Civil Service Fast Stream, an acceleration programme, received 72,691 applications in 2025, but only 754 candidates were recommended for appointment, leaving the success rate at around 1 percent.
In some sectors, graduates are also moving into roles that would previously have been filled by students. Birchall said hospitality employers were increasingly recruiting graduates into permanent roles after they struggled to secure positions elsewhere.
Salaries stall as hiring slows
Pay is no longer rising in line with previous years. High Fliers said graduate starting salaries are expected to remain at a median of £35,000 in 2026, with no increase forecast for the first time since 2022.
With more candidates competing for each role, organisations face less pressure to raise starting pay or offer additional incentives. But this dynamic can create longer-term challenges if new recruits accept roles that are not well suited to them.
Birchall said some organisations were already seeing higher turnover among graduate hires, as candidates moved on quickly after securing their first role. “People are accepting any job they’re offered, but then it turns out it isn’t the one they wanted or it isn’t a good fit for them,” he said.
Recruitment teams are also handling significantly higher volumes of applications. Azets, an accountancy and business advisory group, received more than 10,500 applications for just over 200 graduate roles this year.
Peter Gallanagh, chief executive for the UK and Ireland at Azets, said the company had adjusted its entry requirements to avoid missing strong candidates, explaining that academic results alone were no longer the sole indicator of potential. “While a good educational background is important, we’ve lowered our entry requirements to a 2:2 to avoid missing out on great candidates who may not have got the honours they wanted,” he was quoted in The Times as saying.
He added that broader experience was becoming more important in selection decisions. “When we recruit graduates, we look for people whose past experiences have shaped their character and outlook. That can be through part-time work in retail, hospitality or other industries, volunteering in the community, competing in sport or taking on leadership roles in student life, as these experiences build grit, teamwork, responsibility and problem-solving and collaboration skills.”
Technology and policy may reshape entry routes
The current downturn may not be the only pressure facing graduate recruitment. Birchall said advances in artificial intelligence could reduce demand for entry-level roles in the coming years if organisations were able to increase productivity with smaller teams. “What AI may do is reduce the need for that graduate expansion because each individual becomes much more productive,” he said.
Government policy is also focusing on alternative routes into work. A Cabinet Office spokesman said investment was being directed towards apprenticeships and training to support young people into employment, stating: “We’re determined to go further to support young people into work and gain the skills they need to succeed. That’s why we’re investing £1.5 billion to get hundreds of thousands of young people earning or learning, including through an expansion of apprenticeships and training.”
With vacancies expected to fall again this year, competition for graduate roles is unlikely to ease in the short term. For those entering the labour market, the path into stable employment is becoming longer, less predictable and increasingly shaped by factors beyond academic performance alone.
