Jisc's head of labour market intelligence, Charlie Ball, revisits 2025 to assess his predictions for the year against what actually transpired - with his expectations for 2026 to follow later this week
As I have been doing since time immemorial, I'm going to break all my personal rules to give the people what they want - some predictions about what 2026 might bring in graduate employment. At this point I must stress that this is all prediction, so I could be wildly wrong. But to be honest I rarely am (2020, you can go away, I didn't predict COVID having the effect it did, all right), and I've been making reasonably good predictions for over a decade, so do bear that in mind when you read this.
But first, as an exercise and in accordance with hoary old tradition, let's mark my homework from last year - what did I predict for 2025?
1. As the economy subsides, so will the graduate labour market
"The economic news was not great in the latter half of 2024, we're in economic contraction again, the increase to National Insurance that came in with the Budget has spooked employers a bit. The latter was far from unexpected, but now businesses can see the effects on wage bills and balance sheets, they're signalling caution."
Yep, pretty much bang on, including a subsequent bit where I said President Trump would wield tariffs to great market uncertainty.
2. The next round of Graduate Outcomes data for 2022/23 graduates will show higher early graduate unemployment, lower levels of professional level employment - and more postgraduate study
"The new survey is in the field as I write this and will be looking at how graduates from 2022/23 were doing 15 months after graduation in winter 2024. The jobs market simply isn't as strong as it was a year ago and so I expect those key numbers on employment to be headed down (although I'm not sure it will be a big change). However, postgraduate recruitment is what we call countercyclical - it goes up in more difficult jobs markets - so I expect to see that go up a little when we get the new data next year. And I do think this summer's recruitment for graduates leaving in 2025 will be trickier than it has been since COVID, so support for finalists leaving university in the summer will be vital."
Actually two predictions for the price of one, both correct - GOS data was worse than the previous year's and in the absence of data (we'll get it in the spring), it does look like the 2025 graduate recruitment market was the toughest since COVID. You could see this coming if you read the data right. SPOILER - unfortunately I'm going to make a very similar prediction this year.
3. The government will increase public sector recruitment sooner or later
"This Labour government feels it was elected to fix public services, and they spent the last Budget amassing cash to try to do that. Public sector recruitment and retention is in a tricky state right now with health, social care, education, policing, prisons all understaffed and under strain and although some belated pay rises might help somewhat, some of these workforces are finding it very difficult to maintain services."
Haha, no! I crashed and burned here, the government has got more unpopular, as I suggested would happen (to say the least), but they haven't shown any sign of any of the above. Not going to predict this again for 2026, although come back to me after the local elections in May.
4. AI may not take your jobs but it's a headache in recruitment
"As the ISE have been telling us in detail, AI is not, so far, displacing loads of jobs as might have been feared a couple of years ago, but it's still having quite an impact. AI is good at writing covering letters and CVs, and so it makes sense for candidates to use them, and so they do. That means it's a lot easier for candidates to write a lot of relatively good job applications, quickly, and so that's exactly what they do."
Despite a lot of press saying that AI was taking all the jobs, it turned out that it wasn't after all. But it's massively disrupted recruitment to the extent that the old ways of thinking about what is a ‘good' or 'bad' jobs market might need modifying. It was certainly a very difficult jobs market for both recruiters and candidates as AI tools means the former are swamped with applicants and the latter face far more ostensible competition. It's very difficult to see who benefits. We're in a new situation now that needs new tools for everyone to deal with and most people are still trying to work it out. I think that this was the most consequential change to the labour market in 2025, and since the mass advent of remote working during COVID (although I don't actually think it was as transformational as remote working though).
5. More talk about Return to Office, but action? Not so sure
"Towards the end of the year we started to see more Return to Office (RTO) mandates from employers, particularly in the US, and there has been chatter about whether hybrid working has had its day and is on the way out… But in the UK I don't see widespread RTO being likely this year. For a start, the UK is not the US and hybrid working is more widespread here and will be tougher to reverse. There's also a wider acceptance that it's broadly working for business and employees."
This looks right looking back, and the reason I'm being equivocal is that it's no longer such a significant UK issue and it is largely accepted. I think we're now in a relatively stable state where hybrid working is an accepted and expected part of many roles and workplaces in the UK and whilst the changes this demands for some aspects of work will persist, I think we can now assume that the current levels of hybrid working will largely continue.
Charlie Ball's predictions for the graduate labour market in 2026 will be published on Thursday 8 January.
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