Charlie Ball, Jisc's head of labour market intelligence, sets out his expectations for the year ahead, including the continued impact of AI and - more optimistically - overdue recognition for arts students
Having marked my own homework from 2025 and declared myself to be quite splendid (mostly right, but wrong about public sector recruitment), now it's time for some predictions about 2026. Things are very uncertain in the national and global economy, so I'm sure some of this will come unstuck, but here's what I see happening based on current trends, long experience and a bit of a sniff of the prevailing winds.
The graduate labour market isn't likely to get a lot better in 2026
2025 was not a great year for the graduate labour market, although it doesn't seem to have been the disaster some of the reports we've seen this year might have suggested. It was certainly the most difficult since COVID, but much of that was due to the labour market outperforming the economy since the pandemic. It looks like it started to track the economy more closely at the end of 2024 and continued that trend in 2025, falling in the early part of the year and seeming to stabilise in the autumn. I’d like to say it 'bottomed out', but I think if we get difficult economic news in early 2026 it'll start falling again, so let's stick with 'stabilised'.
All this is a very long-winded way of saying that after years of defying gravity, the UK labour market in general - and the graduate labour market is no exception - is now tracking much closer to a decidedly anaemic UK economy. And with little good news looking very likely, expect that to continue. The only crumb of comfort for graduates is that as usual most of the pain in 2025 was reserved for people with lower qualifications (not that you'd get that from media reporting) and unfortunately that trend is likely to also continue in 2026.
The contribution of the arts is far more than the merely economic, but that's the ground critics have chosen to play on, and it's an argument we can engage with.
Just like last year, the next round of Graduate Outcomes data for 2023/24 graduates will show higher early graduate unemployment, lower levels of professional-level employment - and more postgraduate study
This is the easiest prediction I've ever made, I think, but it still needs to be made because it impacts all sorts of sector performance measures. We'll get new Graduate Outcomes data in later spring and the indicators will be less positive than the most recent round, which were, of course, less positive than the round before. In fact, this is such an easy prediction I was already making it this time last year. I'm not so sure about the 2024/25 data as it happens, but that's only because I’m currently unsure whether it'll be worse than this year's, or pretty much the same.
AI's impact is still unclear but we're rapidly approaching the moment of truth
2025 closed like 2024 - with actual data (this time from the US, and the long-standing and essential NACE survey) showing that the mass replacement of entry-level jobs which was widely reported doesn't seem to be happening. If something like this is taking place, it's doing it slowly, and incrementally. I expect to see more stories about this in 2026 as the amount of money invested in LLMs and similar AIs is economy-threateningly astonishing, and the returns generated are... not. At some point, something is going to give, either the great breakthrough is going to happen or, as seems increasingly possible to many good judges, the bubble bursts.
This creates a lot of uncertainty. If there is an AI bubble - and it looks to me unlikely that the tech has yet had the breakthrough it needs to get financial returns justifying the literal trillions of dollars invested in it - that will upend much of what I've said here as we'll get a fairly stiff recession as a result. But it's also possible that the breakthrough might happen. I'm hedging. I think if there is a breakthrough to take place that accelerates job replacement, it'll be this year - and if not, then I think investors will be very anxious.
But the impact on recruitment is undeniable, lasting and will continue in 2026
In a conventional sense, the graduate labour market seems to have got a bit worse in 2025. The ISE reported that the entry level jobs market seemed to be down 5% among their members this year, although an 8% fall in graduate hiring was offset a little by a rise in apprenticeships, which make up a smaller, but growing share of the market. This is not great by any means but nor is it the picture you might have gathered throughout the year.
But the jobs market palpably and undeniably got a lot harder, particularly for candidates, as the use of AI for applications means that jobs are contested by many, many more applicants. Put simply, AI can make applications much easier to complete, which removes one simple barrier. In the past a casual or uncommitted applicant simply wouldn't want to wade through a whole application system, now there are tools that can navigate all that for you. And then it will put in a clean, superficially-polished application. That looks functionally identical to all the other new candidates doing exactly the same, making it impossible for recruiters to distinguish and taking much more time to sift candidates. From the candidate end, the odds feel much more stacked against you - if everyone is using AI, then shouldn't you? It is natural to think that, especially if you're not confident in making an application, or are not very experienced at navigating the current jobs market. Especially when you have bills to pay. It's dispiriting and makes the jobs market feel tougher than the initial numbers might make it appear.
From the recruiter end, most report it hasn't increased the number of really good candidates they're getting, they're just harder to find. And if it costs more to recruit, this impacts stretched budgets, and that deters recruiters.
There isn't a current consensus on how to tackle this issue, and I don't think it's likely to be solved in 2026. Business is still not clear on how to handle the last big tech shift, the move to remote or hybrid working that happened during COVID and the impact that has had on recruitment, training and retention, and with the economy looking uncertain a lot will be cautious.
Arts graduates will finally start to be recognised
This has all seemed a bit gloomy so I'll finish with something more positive - and also a bit more out there in terms of predictions. This might qualify as a bit of wishful thinking too, but so what?
Arts graduates have been an easy target for years for those wanting to question the value of university qualifications. People attack their perceived low salaries, as if they think it will come as a colossal surprise to would-be arts students that they might not earn a lot of money (quick hint here - they know, they hear nothing else all the way through school and yet they still study the arts) or the practical value of their qualifications as if people trained in communications and influencing and the media through which these activities are pursued are somehow not valuable in the modern economy. And that overlook the central role that self-employment and entrepreneurship - things graduates are sometimes criticised for not doing enough - play in the arts economy. Arts graduates are the most likely graduates of all to be self-employed, and if you want to find creative ways to generate revenue in even the most unpromising situations, ask an artist. That's their lives, right there.
Of course, the contribution of the arts is far more than the merely economic, but that's the ground critics have chosen to play on, and it's an argument we can engage with. There's some great work going on there to make the point that the arts make a vital economic and social contribution to the country, and I think (maybe I just hope) it will start to cut through this year. If nothing else, this science graduate sees and values the arts and feels they are vital to a healthy and thriving nation. Happy 2026.
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