Job vacancies in Britain have fallen to their lowest level in five years, with graduate recruitment bearing the brunt as employers contend with higher payroll costs and the rapid adoption of artificial intelligence.
Data from Adzuna show that advertised vacancies dropped to 694,940 in January, down 16 per cent year-on-year and 3 per cent compared with December. It is the first time since January 2021 that the number of vacancies has dipped below 700,000.
The decline has been particularly severe for young people entering the labour market. Fewer than 10,000 graduate roles were advertised last month, the first time that threshold has been breached since records began in 2016. Graduate vacancies have fallen 45 per cent over the past year, while entry-level roles are down 4.4 per cent.
Youth unemployment has climbed to 16.1 per cent, its highest level in more than a decade. There are now 2.4 jobseekers competing for every vacancy, up from 2.27 in December, pointing to intensifying competition.
The figures echo recent data from the Office for National Statistics, which showed the overall unemployment rate rising to 5.2 per cent in the three months to December.
Employers are reassessing hiring plans following increases in employer national insurance contributions and minimum wage rates. At the same time, businesses are exploring AI tools that can automate junior administrative and professional roles, reducing demand for entry-level staff.
Andrew Hunter, co-founder of Adzuna, said hiring activity was approaching pandemic-era levels. “With graduate roles at a record low, the market is far from stable,” he said.
However, there are tentative signs that the pace of decline may be easing. Separate figures from the Recruitment & Employment Confederation show active job postings rose 3 per cent month-on-month to 1,435,910 in January, although they remain 5.6 per cent lower than a year earlier.
Shazia Ejaz, director of campaigns at the REC, said some employer hesitation may be fading but warned that rising costs continue to weigh on hiring decisions. “If policymakers want to avoid entrenched higher unemployment, they must be mindful of measures that increase the cost of employing staff,” she said.
One area of resilience has been pay. Adzuna reported average advertised salaries rising to £43,289 in January, up nearly 6 per cent year-on-year, suggesting firms remain willing to compete for skilled workers even as overall vacancies decline.
For young people seeking a foothold in the labour market, however, the combination of tighter hiring budgets and technological change presents mounting challenges.
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