Entry-Level Jobs Are Disappearing, and Your Future Leaders Are Going With Them

Something strange is happening in the job market. Every week I hear from former students who’ve sent out hundreds of applications without landing a single interview. When they finally do get one, it’s often a one-way video screen with an AI on the other end. At the same time, the corporate leaders I work with keep telling me they can’t find enough good people to hire. Both groups are telling the truth. And the gap between them runs straight through entry-level jobs.

It feels like we’ve built a market where every employer is searching for the same mythical employee: someone young and affordable, but also experienced and immediately productive. They should be fluent in AI, good at everything, and need no training whatsoever. Then we act surprised that these people are hard to find.

Right now that’s a frustrating problem for new graduates, and a frustrating problem for organizations. Before long it becomes a problem for everyone, because every experienced employee was once an inexperienced one. Somebody gave them their first shot. Somebody taught them how the work actually gets done. Somebody let them get it wrong and learn from it.

The numbers behind the decline in entry-level jobs

The old promise was simple. Get the degree, ideally in a STEM field, and a job will be waiting. That promise is broken. According to the Federal Reserve Bank of New York, the unemployment rate for college graduates aged 22 to 27 rose to 5.6 percent at the end of 2025. Of those who were employed, more than 40 percent held jobs that don’t typically require a degree.

The job postings tell the same story. Indeed reported that junior-level postings on its platform fell 7 percent in 2025, and Handshake saw a 15 percent drop. Over the same period, applications per job climbed 30 percent.

You might reasonably ask whether this is just a bad job market for everyone. It isn’t, quite. Overall unemployment is low, layoffs have been limited, and plenty of economists would call the labor market reasonably healthy. The trouble is on the hiring side. In June, the economy added only 57,000 jobs, against an average of 130,000 over the previous three months. Nearly all of those new jobs came from health care and social services.

Economists call this a low-hire, low-fire labor market, and it creates an illusion. Nobody’s getting laid off and nobody’s quitting, so things must be fine. They are fine, if you already have a job. But young workers depend on vacancies, on roles that open because someone else moved on. When nobody leaves and nobody hires, they feel it first. Two economists studying new labor market entrants described young workers as the labor market’s canary in the coal mine. They warned that if hiring stays subdued, young adults will keep bearing the brunt of the adjustment, and that their struggles may signal a broader softening ahead.

Meanwhile, in one global survey, 72 percent of employers said they’re struggling to find the skilled talent they need. There are plenty of candidates and plenty of openings. Somehow they keep missing each other.

How organizations are responding, and why it’s backfiring

The most common response has been to lean on AI, both to do the work and to decide who gets hired.

On the first front, companies aren’t being subtle. Several of the largest banks, including Bank of America, Wells Fargo, and Goldman Sachs, reported $47 billion in collective profits earlier this year while cutting 15,000 jobs, and they credited AI with helping automate the work. AI has been the most commonly cited reason for layoffs for five straight months. “Cited” is doing some work in that sentence. Molly Kinder, a senior fellow at the Brookings Institution who studies AI, described the sentiment to The New York Times bluntly: it’s hard to name what a college student brings to the team that Claude can’t do. Anthropic CEO Dario Amodei has warned that AI could eliminate half of entry-level white-collar jobs within a few years.

The shift is already showing up in the data. In a ZipRecruiter survey of new graduates, nearly half said AI had already changed hiring in their field. Indeed found that the share of tech postings requiring five years of experience rose from 37 percent in the second quarter of 2022, shortly before ChatGPT launched, to 42 percent in the second quarter of 2025.

On the second front, AI is increasingly the gatekeeper. Stanford’s Institute for Human-Centered AI reports that 90 percent of U.S. employers use AI to help screen candidates. Job seekers, in turn, use AI to churn out resumes and cover letters faster than ever.

That floods inboxes, which pushes companies to lean even harder on the bots. Robots apply to robot-posted jobs and get rejected by robots.

The problem is that these tools mostly match keywords. They don’t always recognize the different ways people describe the same skill, and they rarely look past the job description to potential or transferable skills. Studies have found that AI hiring tools can introduce racial and gender bias rather than remove it. So qualified candidates get screened out, and organizations keep saying they can’t find talent. In one survey of U.S. employers, 13 percent planned to outsource recruiting and 11 percent planned to use AI or automation to reduce staffing needs. Only 27 percent said upskilling and reskilling was part of their strategy.

To be fair, AI is only one piece of the puzzle. Harvard economist David Deming suspects remote work plays a role. Junior employees need more coaching, coaching is harder through a screen, and when your applicant pool is the entire country, it’s easy to hire experience instead.

Others point to a mismatch: new jobs are concentrated in health care and social work, and young people aren’t rushing into those fields. Others note that people working past typical retirement age slow advancement and reduce turnover. Still others think we’re just feeling the slow unwinding of the pandemic hiring boom, when there were two open jobs for every person looking for work.

Probably all of these matter. As MIT professor emeritus Paul Osterman told The Wall Street Journal about whether we need more workers or fewer, “We have no idea.”

The unicorn problem

Every one of those explanations leads to the same behavior. Companies are looking for unicorns: people who arrive with every skill on day one. Unicorns are rare. That’s why we named them after a mythical creature.

This turns into a self-fulfilling prophecy. The more organizations strip entry-level jobs out, the fewer places there are for anyone to develop those skills. The fewer places to develop skills, the rarer the unicorns become. The rarer the unicorns, the harder the search. This isn’t a talent shortage. It’s a shortage of organizations willing to develop talent.

Some organizations are already noticing. Sarah Franklin, CEO of the HR platform Lattice, has said that many of her clients who stopped hiring entry-level employees in favor of AI have quietly started hiring for those roles again. The World Economic Forum argues that protecting entry-level hiring isn’t optional; it’s a core operational priority. Entry-level work has always run on a delayed-return contract, where people put in effort now in exchange for growth later. When companies stop making that investment, the whole pipeline erodes.

There’s a team cost, too. One of the first things you lose when a generation is kept out of the workforce is diversity of thought, and that’s one of the most important ingredients in any high-performing team. Age diversity brings something distinct. Research from the OECD notes that companies whose workforces span multiple generations tend to be more resilient when disruption hits. Age-diverse teams also tend to serve customers better, because a workforce that mirrors its customers’ ages understands them better.

Junior and senior colleagues covering each other’s blind spots only works if both are in the room.

How to rebuild entry-level jobs for an AI workplace

Reopening entry-level roles isn’t enough. They can’t look like they used to, at least not if we want people in them to grow into the leaders we’ll need. Three changes make the difference.

Give them the work AI could do. It’s tempting to hand the busywork to AI and wonder what’s left for a new hire. That’s a slippery slope. Build the role the way your own mentors built the path for you, with patience. Let them review the memos and interpret the data, even when a tool could do it faster. That work is where knowledge, judgment, and intuition get built, and leaders will need all three later.

Graduate them on purpose. Once they’ve mastered the foundational work, move them deliberately into the tasks that require creativity, real problem solving, and interpersonal communication. The early work isn’t the destination. It’s the training ground for the work that leadership eventually demands.

Make the tools part of mentorship. The future of entry-level work doesn’t involve pretending AI doesn’t exist. Developing people now includes teaching them how to use these tools well. Don’t assume they’ll figure it out on their own.

A lot of the commentary on this shift treats it as though it barely matters because it’s happening to new grads. They’re young, they’re hungry, they’ll adapt. That’s a ridiculous way to think about our teams. Entry-level employees need mentorship and guidance. They need someone to see the potential in them the same way someone once saw it in you.