The number of job vacancies in the UK has fallen to its lowest level in five years, with graduate recruitment bearing the brunt as employers struggle with higher wage costs and the rapid adoption of artificial intelligence.
Data from Adzuna shows that the number of advertised jobs fell to 694,940 in January, 16 percent less than a year ago and 3 percent less than December. It is the first time since January 2021 that the number of job vacancies has fallen below 700,000.
The decline was particularly sharp among young people entering the labor market. Fewer than 10,000 graduate jobs were advertised last month, the first time this threshold has been exceeded since records began in 2016. Job vacancies for college graduates fell 45 percent last year, while jobs for entry-level professionals fell 4.4 percent.
Youth unemployment has risen to 16.1 percent, the highest level in more than a decade. There are currently 2.4 job seekers competing for each vacancy, up from 2.27 in December, indicating increasing competition.
The figures reflect recent data from the Office for National Statistics, which showed the overall unemployment rate rose to 5.2 percent in the three months to December.
Employers are rethinking their hiring plans due to increases in employer social security contributions and minimum wages. At the same time, companies are exploring AI tools that can automate junior roles in administration and specialist areas, reducing demand for young professionals.
Andrew Hunter, co-founder of Adzuna, said hiring activity is approaching pandemic-era levels. “With the number of college graduates at a record low, the market is far from stable,” he said.
However, there are initial signs that the pace of decline may be slowing. Separate figures from the Recruitment & Employment Confederation show active job postings rose 3 percent in January compared to the previous month to 1,435,910, although they were still 5.6 percent lower than a year earlier.
Shazia Ejaz, campaign director at the REC, said some reluctance from employers may be waning, but warned that rising costs continue to weigh on hiring decisions. “If policymakers want to avoid persistently higher unemployment, they need to keep an eye on policies that increase the cost of employing people,” she said.
One area of resilience was pay. Adzuna reported a rise in average advertised salaries to £43,289 in January, up almost 6 per cent on the previous year, suggesting companies remain prepared to compete for skilled workers even as overall vacancies fall.
However, the combination of tighter hiring budgets and technological change presents increasing challenges for young people seeking to enter the job market.
