Nigel Cassidy (NC): As entry-level recruitment slows or even stops, how can organisations avoid sleepwalking into a talent crisis? I'm Nigel Cassidy and this is the CIPD podcast.
The junior jobs ladder isn't just getting steeper. The first rungs are being kicked away. Entry-level vacancies are down by half in some places or may even have been axed altogether. And we know the likely causes, AI is being used to complete tasks once given to juniors, minimum wages and employment costs are up, a lot, and there's a wider reluctance to train and develop staff that won't earn their keep almost immediately.
But our focus here isn't so much on the pain being felt by Gen Z, real as that is, more on why its savings on headcount today might have to be paid for in churn, in morale and productivity later. Because our guests this month warn that if you don't rethink and redesign jobs and career paths, your organisation could just end up high and dry without home-built talent who know the ropes.
Well with us, the emerging talent director at the semiconductor and AI software design leader Arm. She oversees the recruitment and development of 850 promising new hires worldwide and is familiar figure at events debating the future of work. It's Orianne Whiteman. Hello.
Orianne Whiteman (OW): Hi, Nigel.
NC: And next we have a business founder with over 35 years senior leadership experience in financial services, aviation, retail, energy and professional services. His, Elevate Executive Coaching, helps board and leader performance, and he's a particular interest in the impact of AI on entry level jobs. It's Craig Pattison. Hello.
Craig Pattison (CP): Nigel and everybody else.
NC: And we welcome the CIPD's resident employment and skills policy advisor, whose expertise in this field, having led youth labour market research and policy development for the Work Foundation. It's Lizzie Crowley. Hello.
Lizzie Crowley: Hi, Nigel.
NC: Now, entry level jobs. My break was on the local rag, £15 a week plus expenses. So I'd love to ask each of you, what was yours? And looking back, what was great about it?
OW: If you discount the home chores, we all started with odd bit of tidying, washing a car, cleaning up bits and pieces where you could. My first paid role was actually at a bar and I was serving some very decorative locals that enjoyed making their weekends count.
NC: Okay, so it sounds like a lot of mess and clearing up and...
OW: A lot of good people skills going there.
NC: Yes.
LC: Well I obviously did work during the summer when I was at school, so a lot of restaurants and waitressing work. But my first job when entering the labour market in 2000, after I finished my degree, was that I couldn't really face going straight into a professional role. So I actually worked in temporary work in the financial services industry mostly. And I think it actually was a very valuable thing to do before going into my master's and then entering into the type of work I do now, because it really taught me the office behaviours that people really value and built a lot of the soft skills that employers really look for.
CP: So I think I'll talk about my first full-time job, which when I went for the role, it sounded really great because it was a trainee manager for Tesco. The reality on day one was quite different to being a manager, but it was very good grounding and it taught you pretty much everything about business, to be honest. So I'm incredibly grateful, but certainly not as glamorous as I thought.
NC: Okay, Lizzie, I mean, it's clear that with the cost of employing an inexperienced worker up so much, I mean, clearly the likes of Tesco are still going to be employing people, but technology is able to do a lot of the grunt work in a flash. And it's easy to see, isn't it, why employers want to cut these entry roles. But I mean, with the sort of overview you have, I wonder, do you see real evidence of this happening across the board? I mean, is it AI or is it the cost of employment or what?
LC: I think it's actually really quite difficult to entangle all of that at the moment. So what we do know is that there's constrained hiring in entry level positions. And that has been the case since around sort of post pandemic 2022. There's been quite a significant decline, but we can't tell exactly at the moment whether that's got to do with or the increased cost pressures on business versus sort of some of these other changes we're seeing in, how work is transforming with technology. But we can begin to look at it and it is being observed in particular parts of the labour market.
So if you look at some professional services type roles, which actually required a lot of basic kind of administrative, for instance, type of work, easily automatable or easily able to be replaced with generative AI, that is where we're seeing some of the emerging difficulties arise with those early career talent pipelines.
NC: And Craig, it may be worth reminding ourselves the purpose that entry level jobs served until now at least. I mean, in essence, they were kind of stepping stones.
CP: They were. They, for me, they're foundational and they're critical by the nature of being entry level. But they are about delivering output first and foremost. I mean, they are they are, the roles that go through quite repetitive tasks in some cases. They function really well as learning environments. And I think if I go back to my early career, that's the most important thing that I got from it was that opportunity to learn and to fail sometimes as well. But what you're doing through learning, of course, is learning the job itself, but learning about, you know, if you are somebody who wants to progress, for example, you're learning about things like judgment. You're learning about what works, doesn't work, the outcome of some of the things that you do, the decisions you take. So for me, they really are critical for that learning opportunity.
NC: And kind of thinking about that, Orianne, once upon a time, organisations used to talk about building a bench, didn't they? Investing in high potential individuals for the future. But maybe organisations feel they can get by, by just buying in the people they need.
OW: That's an interesting point, Nigel. And I'm a very simple, honest woman. So I like simple TA models. And the one that's really landed with me recently that most may have heard of, and if they haven't, I hope I can teach something new to our listeners today. When you think about building your talent model and how you structure talent, you've got four key ways to do that. You can buy experienced talent. You can build and home grow. You can borrow through contractors and short-term labour. Or you can bot, which is the automation and technology we're seeing. There is no perfect model for every organisation. So you might see some companies dip into 30% buy, 20% build, 10% borrow. But I think it's important that companies really pause in this environment to ask themselves, what is the right model for us? And where are we focusing our efforts? And as you've pointed out, and as you've mentioned, Lizzie, unfortunately, that build model is an area that people are questioning, but it comes with quite a detrimental impact. So it should be taken with deep caution is my advice.
NC: Yeah, I mean, we're talking about the, in essence, the hollowing out of an organisation, maybe when that wasn't the original plan. So Lizzie, how do you think this might all play out?
LC: I think there is a real risk if that people don't plan this kind of deliberately. You know, these entry level career pathways will erode, you know, by default rather than by design. And that's a kind of key point sort of Oriana kind of mentioned there. And I think, what we see, where I've been analysing a lot of survey data around this, we've just asked this kind of question of HR leaders, senior leaders and HR generalists. And kind of what we found is that many organisations are experimenting with AI ahead of capability. So they don't have those foundational practice in place to support workforce transformation and really actually think about role design in a very strategic way. So we're not eroding these pathways. By default, they're doing it by design. And unfortunately, not enough are in that latter category.
So I don't think the question is about preserving these roles that might not necessarily work for business any longer, but it's really rethinking how you develop your early careers talent in a way that can supply your company with the skills that you're going to need in the medium and the longer term.
NC: Well, that's a really big thing to do, isn't it, Craig? So should we focus a bit on, well, how you start that process? What are the questions you should be raising with leaders, to get them thinking about this balancing of immediate cost savings with future needs.
CP: I think that what we said already is that, AI is here to stay. So it's not about ignoring it, it's about embracing it. But I think that it's about understanding that if we eradicate all of those roles, where do we get that judgment? Where do we get that decision making ability from? So that, I think, is a question people need to ask themselves. That, and particularly going back to the build and buy scenario, if all organisations eradicate these roles, there won't be anybody to buy either, or there'll be very few people to buy. So I think we've got to really go back to basics and say, okay, well, even if we know that we don't need as many entry level jobs as before, how many do we need and what are the constructs of those jobs?
So could it be things, for example, and not to get too into solutionising just yet, but, and I think, Lizzie, you mentioned this, it's about the tasks, being clear on what are the tasks that need to be done and still need to be done by a human or overseen by a human. I think that's what's important that organisations begin to talk about.
NC: Orianne, I mean, clearly you're still taking on a lot of graduates, but I guess it will be wrong to think that you haven't changed how you think about your talents and what roles they might have and how you integrate them and all that.
OW: We are very fortunate that the semiconductor industry is going through a definite boom and AI is at the heart of that. So we are lucky that actually for us, graduate roles are increasing, but that does come with thoughtful design on what are they here to solve and what are the skills where technology will be able to assist and actually entry level coding may change in the future, but things like debugging, your analytical skills, being able to spot errors, and as you said, Craig, have that judgment, that is still predominantly A human-led benefit. So we are really thinking about that at Arm, but also thinking about how we don't confuse experience with potential. And I might come back to that later because it's It's a really fundamental point, but for us graduates are critical. And as Craig said, if we don't build the talent now, we won't be able to buy that talent in the future for the whole industry. And that's thinking beyond all, that's thinking the greater good of society.
NC: Because Lizzie, it's a big ask, isn't it, to tell leaders that they're wrong to cut entry level employment because costs are very high. So how do you see organisations dealing with this?
LC: I think that there will need to be a rethink of, I mean, because yes, okay, in the short term, it might mean that you're able to cut costs. But we need to be looking at, sort of how that actually is going to impact businesses over the medium to longer term. And I think that is one of the challenges we live in the UK in particular. What we see is that not enough actually do strategic workforce planning or are looking enough into the future to make decisions about how they invest in human capital now. So I think there does need to be a kind of shift to towards ensuring that more and more are engaging in that type of activity. Because I think then you can really begin to make the case to senior leaders that actually, that completely destroying, creating a diamond-shaped organisation is not going to deliver that return on investment in the future.
But I think just I also wanted to bring up a kind of real risk that some of this potentially has for those young people who are landing in those newly reshaped entry-level roles, because we also need to think about whether kind of work intensification is happening there. So we could have maybe done a lot of administrative work and to be honest, it took the pressure off you. You could be doing your problem solving, your critical thinking, your judgment part, and then you'd break, do some of your routine processing. But now a lot of those reshape roles are all of the really kind of heavy load cognitive stuff. So we are speaking to some of our members who are concerned about what their graduate, their smaller graduate intake looks like in terms of the shape of those jobs.
NC: Okay, well, that's a warning there.
CP: Yes, I mean, some of the things are really around the deliberate sort of workforce architecture. So really being very, very thoughtful around what does that look like going forward. As Lizzie said, we're not great at workforce planning, particularly in organisations. I think this really demands that now. Otherwise, there is that risk that we're going to be left with nothing when we need those roles for succession. So designing those entry level roles by default is important, but also thinking about maybe the task mix.
So for example, at the moment, we may hire an administrator, for example, in HR or a coder. What could those people do in alignment with the use of AI, but also in addition to those roles as we've historically thought them to be? So for example, is there administration that people could be doing? Because the focus will now be on judgment and decision making, is there things that people could do that are maybe multifunctional, for example, as opposed to just being in a silo?
I think the other thing is that organisations really need to start ensuring that they're training people in the use of AI. I think this is very important that people recognise that, yes, we're all increasingly many, many, many more people are using AI, but are we using it effectively? And are we getting the most out of it to ensure that what we're actually getting from the system is actually beneficial and accurate as much as we can be? So I think there is that.
There is also, as I say, we have talked about this already, but there is really taking seriously about this build and buy strategy. And I know borrow in there as well, but particularly on the build and buy, we've really got a plan for how we are going to, how we're going to fulfil our succession plan and leadership requirements.
NC: Because if nobody's building. There's not going to be anywhere to buy these people from, is there?
CP: And I think the problem with that is that, of course, for your organisation, you may not have an issue. And I think that's the challenge for the HR function as a whole, is to, you know, we have a responsibility here, I think Orianne said, for the greater good. We do have a responsibility to think about that, because there will be a time, as we've all probably found in our careers, where you haven't necessarily had exactly the right talent internally, and you have had to go and buy.
OW: Yep…
CP: So it really is something we just can't, we cannot afford as a function to allow to sleepwalk into the situation where we don't have that.
OW: Building on that, Craig, I think it's also coming back to the experience over potential. Even if an organisation isn't booming, they're not the semiconductor industry, they're not technology or energy or the areas where you can see that long-term growth. but actually they still need to think about how are they going to innovate. And people confuse experience with having years behind you, lots of other roles, lots of other backgrounds, when actually potential is often what you see in your entry level pathways. And we've got great examples like Zaria at Duolingo and the millions of followers they gained. We've got the Spotify intern that created Spotify Wrapped. That was really powerful. That's entry-level folk that have built something phenomenal. So removing that layer, actually how much innovation and creativity are you losing by removing those entry-level roles?
And I think that's a big risk that companies are overlooking. Nobody wants to be the blockbuster or the Woolworths of this generation. So I do want to go back to, we have to make sure we don't confuse experience with potential because they're not correlated the same.
NC: Lizzie, have you seen any examples of how organisations are tackling this?
LC: I think we're early days with a lot of kind of employer practice in this space. But actually, I think like a lot of things that we currently already do, do and do very well are actually where the solutions lie to addressing some of the challenges that we're seeing here. So, you know, I think there probably needs to be a bit of a rethink, for instance, about those graduate entry roles and actually how potentially those rotations look like to ensure that you are thinking about building the skills that would have been being traditionally built via tasks that are now being done by AI and in other parts of the business. So it's beginning to think more creatively about those graduate rotations.
Apprenticeships are a perfect vehicle as long as the government makes them kind of adapt slightly more quickly than they currently do. But they enable an individual to get a significant amount of off-the-job learning. And perhaps that's where some of the learning that AI might have taken away in those foundational skills can be learnt experientially for individuals and job shadowing. So I think a lot of the mechanisms are already there that we can utilise. So it's a bit like using your old skills but in new ways as an HR professional to ensure that we aren't eroding the skills that are actually used to be built in these really important fine foundational entry points to the labour market.
NC: And thinking about all that, Craig, is there anything you can add in terms of some really practical things that people can do when they're thinking about this.
CP: I think some of the things are just thinking, as I said before, the construct of the roles. What are the fundamental tasks that are required within each role? I think that's very important. You know, what does that then mean? So again, challenging yourself that, you know, just because a role's always been done in a certain way, does it need to continue to be done in that way or can it be done differently?
And absolutely looking at that in line with AI. looking and saying, okay, this is what AI can do. What do we now need that role to do? What's the function of that role? That's one of the most important things, I think, for leaders to be considering.
OW: I just echo everything everyone said. We all, we're navigating very difficult waters and nobody knows the answer. One of the biggest things that come out are what skills are we then going to hire? What skills are we looking for? What will entry roles look like? And I think we all need to acknowledge that we don't know. Honestly, we don't know what the skills of tomorrow look like, what the future of AI and agentic AI and having your own agent at home that hopefully will do the washing and the cooking. I would very much favour that. But although we don't know those skills, we do know that no matter what comes out and whatever you need to upskill on, you're going to need agile, open-minded people that can pivot. And I think that's what we need to lean into.
I think you mentioned it at the start, Craig, not being afraid to fail and try and learn. That's the most critical skill set in this market that everyone should really lean into. Because if we don't know what tomorrow holds, but we do know it's going to change, then buckle up and get ready. And that's how you can market yourself in this current condition.
NC: I mean, this is quite tricky for people, professionals in a way, Lizzie, because these are pretty strategic decisions. And yes, of course, it is HR's job to be aware of where things ought to go.
LC: Yes, and I think that actually this fundamentally puts HR, fundamentally at the centre of this discussion. All the research that we've currently done, and this is backed up by a lot of other people, unless you actually have those organisational conditions in place, you're not going to get the productivity benefits from deploying kind of AI solutions across your business. So it needs, technology needs to go hand in hand with people and the people profession.
I think also just one point I think we need to kind of raise is that we have workforces that where 50% of them don’t have basic digital skills. There's a huge role that we need to play as professionals in getting our workforce ready for this future. And this future is already here. So we really need to be actually ensuring that all of our people have the basic skills in place that they actually can engage with when the technology team decides to roll out its next solution.
NC: So that's an excellent final thought from you. Let's see, Craig, you would sort of sum up what you've taken from our conversation.
CP: I think the key thing for me that I'd ask people to think about is if we eradicate the roles where people learn their trade, how do we fulfill those pipelines going forward? How do we create those next leaders, those next innovators? That for me is the big question. And again, I say it's not easy. Nobody is saying this is easy. It can't just be done alone by one organisation. This is something that collectively, I believe as a profession, we need to be talking about much more and influencing senior leaders across business and industry more widely to really grasp this, not in a negative way at all about AI. I think we on this call are all very aware that's here to stay. How do we see it as a partner, not as a substitution?
NC: And I wonder, Orianne, if there's anything, because you have so many graduates coming into your organisation every year, is there anything about how they interact with everybody else that might be something others might take a lesson from even?
OW: Multi-generational working. We can't argue that we are in a time where there are so many different ways of working, communication styles, lifestyle preferences. What we see in our graduates is a real lean towards sustainable good and societal good. What are we doing that benefits other people, that takes care of the planet, that makes smart decisions, knowing it's their future, that it's going to impact, 10, 20, 30, 50 years later. So what we see is more a difference in what matters to them. And that doesn't mean it's right or wrong, But we have to acknowledge everyone has a different lever of motivation. So how you motivate your entry level folk, predominantly Gen Z, but you're getting into Generation Alpha and Generation Beta, which is fast looming.
NC: You're scaring me now.
OW: It's coming quick, but that in itself is the magic. And if you lose, that organic environment to mix so many generations to learn from each other, even reverse learning. Think how close-minded we're going to be as a society if we're not integrating across every dimension, including age and generations.
NC: And that was a party political broadcast on behalf of Gen Z. Extremely well put, I must say. Lizzie, some more CIPD content around this topic, I think available soon.
LC: Yes, we've got a number of guides coming out, which would hopefully help organisations do some skills planning around AI. There's also sort of a significant programme of work which has been funded via Innovate UK Bridge AI programme. So do watch this space and keep an eye out on our resources. And also we're going to be doing a big piece of research exactly about this topic.
So hopefully I'll be able to come back with more, I know what we know rather than I think this might be happening in the future.
NC: Brilliant. Well, you've all certainly made the case for smart graduate and entry level jobs. And as I think you said once, Craig, a market in which no one invests in early development, I would imagine it's one where everybody's going to have to pay more for experience.
Big thanks to our three wise guests, Orianne Whiteman from Arm, Craig Pattison of Elevate Executive Coaching, and CIPD's own Lizzie Crowley.
Please subscribe so you don't miss any of our podcasts. There's a fine back catalogue of the professionally useful topics that we've covered on the CIPD podcast pages. But until next month, from me, Nigel Cassidy, and all the team, it's goodbye.
