Market News

(Bloomberg) -- Britons looking for their first jobs face the worst hiring drought since the depths of the Covid pandemic, as the rise in artificial intelligence and higher employment costs distort career opportunities.

Postings for graduate jobs, apprenticeships and junior roles that don’t require degrees have declined 4.5% in the month to July to just below 210,000, according to data from job-search website Adzuna. Entry-level roles now account for just a fifth of all vacancies, well-below the 27% average recorded between 2022-2024 and the lowest share since October 2020 when the economy was under pandemic restrictions.

First-time jobseekers are bearing the brunt of the UK’s labor market slowdown, as they are the most vulnerable to hiring freezes. Employers are pausing recruitment across the board to cope with the Labour government’s £26 billion ($35 billion) increase in payroll taxes and a new higher minimum wage. Youth unemployment reached 14.1% in the three months to June, a two-point rise from pre-Covid levels.

The report also adds to mounting evidence that AI is starting to reshape hiring plans. Graduate roles — which typically involve AI-friendly tasks like sifting through documents or creating presentations — have declined 28% over the last year, almost four times as fast as entry-level jobs, Adzuna figures showed.

“Hiring appetite is clearly uneven,” Andrew Hunter, co-founder of Adzuna, said.

Overall vacancies ticked down in July to almost 865,000, a 1.2% monthly decline, the report also showed. The slowdown in entry-level hiring and a fall in healthcare jobs were partly offset by double-digit growth in construction vacancies.

Employers continued their shift away from hiring full-time staff toward part-time workers after an increase in payroll costs. Contract jobs have increased 22% since the new higher minimum wage and tax increases in April, while permanent postings have dropped 9% over that period.