ISE’s Claire Tyler examines what this year's hiring figures reveal about the state of the early careers market. This is the first of a four-part series that explores key themes from our Student Recruitment Report 2026.
Recent headlines have painted a bleak picture of graduate recruitment, with reports of sharp declines in hiring and growing concerns about the impact of AI on entry-level jobs.
However, ISE’s Student Recruitment Report 2026 tells a more nuanced story. While the market remains challenging, the evidence points to stabilising hiring volumes and continued employer investment in early careers.
Graduate recruitment stabilises after last year's decline
Graduate hiring stabilised in 2025/26 following the 8% decline recorded in 2024/25. Overall, graduate hiring increased by 4% in 2025/26, but growth was concentrated among a small number of large employers.
While six large employers reported increasing graduate hiring by more than 50 vacancies, two reported decreasing it by more than 50 vacancies. So, when these major outliers are excluded, hiring growth was just 0.8%, while the growth rate of the typical (median) employer was zero.
Overall, these findings suggest that total graduate recruitment activity was broadly unchanged across much of the market.
The underlying picture amongst members remains one of caution, with little evidence of either widespread contraction or significant expansion.
When assessing the state of the early careers market, it is important to recognise the scope of the ISE data. The survey covers employers operating structured early careers programmes and captures more than 1.7 million applications and 31,000 hires.
This provides rich insight into recruitment trends among larger employers but offers less visibility of hiring activity within the SME market.
In addition, not all students enter formal graduate training schemes, meaning the wider labour market remains an important part of the picture.
Viewed in this context, the relative stability of graduate recruitment among ISE members is consistent with signs that the wider labour market may be stabilising.
ONS data show that UK vacancies in May to July 2026 were 2.7% lower than a year earlier and had remained broadly flat since the beginning of 2026. Recent data from REC also indicates that hiring conditions may be stabilising after a prolonged downturn.
Alternative pathways continue to expand, but growth is slowing
School and college leaver recruitment also increased by 4% in 2025/26, although the trend differs from graduate hiring.
This growth continues a longer-term trend towards expanding non-graduate entry routes, although the pace of expansion has moderated. Growth in hiring volumes has slowed from 20% in 2022/23 to 9% in 2023/24, 8% in 2024/25 and 4% this year. The median employer reported growth of just 1%.
This suggests that employers remain committed to alternative pathways, but that the rapid expansion seen in recent years may now be beginning to level out.
Stability masks significant variation between employers
The headline figures conceal substantial variation between organisations, as growth remains uneven.
Among graduate recruiters, 45% increased hiring, 15% maintained current levels and 40% reduced their intake. A similar pattern was evident among employers of school and college leavers, where 52% increased hiring, 16% maintained it and 32% reduced it.
This highlights that while some organisations continue to reduce hiring, many are still investing in early careers programmes.
Growth has been strongest proportionally in the Digital & IT and Built Environment sectors. However, Finance and Professional Services remains the largest part of the market, accounting for 42% of all early careers hires among ISE members in 2026.
For students, this reinforces the importance of researching employers individually rather than relying on job market headlines.
Opportunities vary considerably between organisations, sectors and locations, so understanding where employers are growing and tailoring applications accordingly can make a real difference.
Cautious optimism for the year ahead
Many employers remain cautiously positive about the year ahead.
Graduate hiring is forecast to increase by a further 7% in 2026/27, and school and college leaver recruitment is expected to grow by 2%. However, as with this year's results, much of the forecast growth is driven by a relatively small number of employers.
Across both pathways, the typical (median) employer expects no change in hiring levels next year, pointing towards continued stability rather than widespread contraction or expansion.
Despite increased attention on apprenticeships and other non-graduate routes, graduate hires still significantly outnumber school and college leaver hires, and they remain a core element of early talent strategies. However, while hiring volumes appear relatively stable, the nature of entry-level work is beginning to change.
AI is more likely to reshape early careers roles than replace them
Despite persistent headlines about job losses due to AI, our ISE Student Development Report 2026 revealed that the majority of employers (82%) expect either no or minimal replacement of early careers roles as a result of AI.
One of the clearest messages from this year's ISE research is therefore that AI is changing what new hires do rather than whether they are hired.
As a result, employers increasingly expect early career hires to contribute to organisations in ways that complement AI. Entry-level roles are becoming more focused on activities that require critical thinking, professional judgement, problem-solving, communication and relationship-building.
Large graduate employers are therefore not signalling a labour market with dramatically fewer opportunities overall. Instead, they suggest the content of many entry-level roles is changing.
The challenge for students is developing the skills needed to thrive alongside rapidly evolving technologies.
Opportunities remain, but competition is intense
Overall, the survey findings suggest that employers remain committed to early careers recruitment despite ongoing economic uncertainty and budget constraints.
For students and young people, the message from ISE employer members is broadly reassuring. Opportunities remain available, and organisations remain invested in developing future talent. However, competition for these opportunities remains high.
Our advice to candidates remains unchanged: treat job hunting like a job, build skills alongside academic studies and focus on quality over quantity in your applications.
As entry-level roles continue to evolve, employers will increasingly value candidates who can demonstrate adaptability, curiosity and the ability to work effectively alongside new technologies.