The Impact of AI on the Job Market, with a Focus on Entry-Level Roles and Future-Proofing Careers
The Impact of AI on the Job Market, with a Focus on Entry-Level Roles and Future-Proofing Careers
Executive Summary
The rapid advancement and adoption of Artificial Intelligence (AI) are fundamentally reshaping the global job market, with a particularly pronounced and immediate impact on entry-level positions. While some foresee significant job displacement, especially in roles involving repetitive tasks, others highlight AI's potential to create new jobs and augment human capabilities, leading to increased productivity. This briefing synthesises insights on the current challenges faced by recent graduates, identifies jobs most and least at risk, and outlines strategies for individuals and organisations to adapt and thrive in an AI-driven future, with a specific lens on the New Zealand context.
I. The "Entry-Level Bust": A Growing Challenge for Recent Graduates
There is a growing concern that AI's impact on the job market is "different in what technological change is doing to recent college graduates trying to start their careers."
Unprecedented Unemployment Trend: For the first time in over 45 years, the unemployment rate for recent college graduates in the U.S. has climbed above the rate for all U.S. workers. As Matthew Martin, a senior economist at Oxford Economics, states, "This is essentially the first time on an ongoing basis that this has occurred in the 45-plus years that we have data going back to." This suggests that "people who have that higher educational attainment are actually worse off than many of their peers who have lower educational attainment."
Specific Sector Impact: Entry-level jobs in tech and finance are particularly hard to find. Graduates like Tiffany (information science and psychology) and Jacob (economics and finance), despite good grades, networking, and prestigious internships, are struggling to secure full-time roles, applying to hundreds of jobs with limited success.
Many job descriptions for entry-level roles now ask for "two years of experience or, like, 3 years of experience," creating a Catch-22 for new graduates.
One graduate noted that "about 50% of my graduating class is unemployed."
AI as a Contributing Factor: While the overall labour market cooling post-pandemic plays a role, AI is emerging as a significant new cause.
Anthropic CEO Dario Amodei has warned that "AI could potentially wipe out half of all entry-level white-collar jobs" within five years, potentially sending unemployment rates surging. (AI Boom, Entry-Level Bust; AI is poised to disrupt; AI: Opportunity or Entry-Level Obstacle?)
The tech sector, with a 25% AI adoption rate (compared to a national average of 5%), shows a "decrease in employment opportunities overall" for recent college grads (22-27), while older workers (28+) in the same fields have seen stable or slightly increased employment.
Indeed's analysis shows junior-level job postings are down 21% below pre-pandemic levels, while senior-level openings are up.
Gendered Impact: The rise in recent graduate unemployment is "really concentrated in males specifically," largely due to industry preferences. Males tend to gravitate towards "computer science professions... or the tech sector," where demand is currently low, whereas females "tend to move towards health care services and educational services, where demand's quite high."
Frustration and Uncertainty: Graduates who "put in a lot of work starting from high school... get the right SAT score, go to the right college, get internships, get experience, you come out with kind of an uncertainty." This leads to "frustration towards the system and the overall process," and even questioning "underlying abilities."
II. Jobs Most at Risk: Repetitive and Predictable Tasks
AI excels at "routine, predictable tasks," leading to significant displacement in certain sectors.
Administrative and Office Support: Tasks like "data entry, calendar management, scheduling, expense tracking, and email drafting" are easily automated due to AI's accuracy, speed, and cost-effectiveness.
Customer Service: AI-powered chatbots and virtual assistants provide "24/7 Availability," "Consistency," and "Scalability" for routine inquiries.
Manufacturing and Warehousing: Robotic arms and AI-powered logistics systems offer superior "Precision," "Endurance," and "Safety" in tasks like picking, packing, and routing items
Transportation and Delivery: AI is used in autonomous vehicles and route optimisation, increasing "Efficiency" and "Automation potential" while reducing "human error."
Retail and Hospitality: Self-checkout, AI-powered booking systems, and inventory tools enhance "Convenience," "Personalisation," and "Operational efficiency."
Media and Content Generation: Tools like ChatGPT and Midjourney "can generate articles, ads, visuals, and videos in minutes," impacting junior copywriters, video editors, and graphic designers, due to AI's "Speed," "Volume," and "Optimisation" capabilities
Finance and Accounting: Roles involving "accounting" and "transactions are fairly easy to automate."
Data Entry Clerks & Bank Tellers: These roles are rapidly being replaced by AI tools, online banking, and automated systems.
Postal Service Clerks & Cashiers/Ticket Clerks: Similar to data entry, these roles are susceptible to automation.
III. Jobs Least at Risk (for Now): Human-Centric Skills
AI struggles with "complex human emotions, ethical reasoning, and creative thinking." (AI Taking Over Jobs) These "durable skills" are key to staying "completely irreplaceable no matter how fast AI gets."
Healthcare Providers (Nurses, Therapists, Physicians): Require "empathy and compassion," the ability to handle "Complex issues" involving ethical dilemmas, and build "Trust" with patients.
Creative Professionals (Writers, Designers, Filmmakers): Demand "Imagination," "Cultural sensitivity," and "Emotional resonance" that AI cannot replicate.
Educators (Early Childhood and Special Education): Crucial for "Personalised learning," "Emotional support," and fostering "Social and moral development."
Skilled Tradespeople (Electricians, Plumbers, HVAC Technicians): Involve "Troubleshooting" unique, site-specific challenges, require "Physical dexterity," and "Human judgment."
Human Resources and Organisational Development Leaders: Deal with "Human emotions," require "Cultural sensitivity," and engage in "Ethical decision-making."
Executives/Leadership: Strategic roles that require broad-based and deep thinking, judgment, and critical thinking.
AI Ethicists, Prompt Engineers, Digital Well-Being Coaches, Human-AI Interaction Designers: These are emerging roles directly related to managing, optimising, and understanding the human-AI interface. (AI Taking Over Jobs) While "prompt engineers" have seen some decline in listings, the broader need for human-AI interaction remains.
Science, Engineering, and Research: AI will augment, not replace, these fields, demanding skills in interpreting AI outputs and formulating new problems.
Jobs requiring "Creative thinking," "Leadership," and "Interpersonal interaction": These are consistently identified as AI-resistant and highly valuable
IV. Preparing for the AI-Powered Workforce: Strategies for Individuals and Organisations
The consensus is that "AI is not the problem, staying the same is."
Mindset Shift: From Worker to Problem Solver: Individuals should move beyond seeing their careers as linear paths and instead as "a series of evolving tours of duty," focusing on "solve valuable problems and create opportunities." AI can "complete tasks... but it can't define the right problems to solve."
Reskilling and Upskilling: This is a critical solution to "mitigate the impact of AI job displacement."
Focus on AI-Resilient Skills: Prioritise "durable skills" such as "problem solving, communication and adaptability." These are "the most valuable skills in the workplace today."
AI Literacy: Learn how to "use AI for their own benefit" and "collaborate effectively with AI." (AI is poised to disrupt; New year, new tech) This includes understanding how to craft effective prompts and leverage custom AI tools.
Technical + Human-Centred Skills: While "coding is becoming a foundational skill for everyone," combining technical skills with "human-Centred skills like creative thinking and Leadership" will "set you apart."
Industry-Specific Training: Employers should invest in programs to help displaced workers transition into AI-adjacent or AI-resistant roles (e.g., customer service agents to chatbot trainers, warehouse workers to machine operators).
Organisational Adaptations: Transparent Communication: Companies must openly communicate about "automation and any resulting job redesigns, reassignments, or reductions" to build trust.
Proactive Career Transition Support: Ethical layoffs should include severance, outplacement services, and career coaching.
Investment in Early Talent (with a New Approach): While many companies are hesitant, some, like Coinbase, are "investing huge into early stage talent" with a mandate from leadership. This involves redefining entry-level roles to focus on "task B" (higher-level tasks) that AI has enabled, rather than the old "task A."
Hybrid Job Design: AI should "augment human roles" rather than replacing them entirely, freeing employees for "more complex and creative work."
Bias Auditing and Ethical AI Use: HR must "routinely audit algorithms for bias" and "Maintain human supervision in recruitment decisions" to ensure fairness and trust.
Foster a Culture of Innovation: Encourage employees to "experiment with new AI technologies" and "share their outcomes."
Government Role: Regulators should focus on "job retraining" and working with local employers to ensure skills alignment.
Personal Branding and Experimentation: "Start small and experiment" by using AI tools to solve real-world problems for yourself or others.
"Document your journey" and "share your ideas" on platforms like LinkedIn and Substack. This "makes you more valuable and in demand" as opportunities will start to come to you. (How to Future-Proof Your Career)
V. New Zealand Context
AI's impact in New Zealand mirrors global trends, presenting both challenges and opportunities.
Disruptive Potential: The World Economic Forum predicts that "by 2025, machines will perform more current work tasks than humans." Reports suggest that "up to 46% of jobs in New Zealand are at risk of automation over the next 20 years," with 30% at high risk by the early 2030s, according to PwC
Productivity Gains: AI adoption is expected to "increase productivity by 1.5% annually" in New Zealand.
Government Response: The New Zealand government has launched the "Artificial Intelligence Action Plan to help businesses and workers prepare for the impact of AI on the job market."
Focus on Soft Skills: In Australia and New Zealand, Robert Walters' research highlights that "soft skills are now more important than ever." 96% of professionals believe they are "equally or more important than technical skills," and 92% of employers have rejected candidates due to their absence.
Gen Z Advantage: Gen Z professionals are considered "AI-ready talent" due to their "innate comfort with technology" and adeptness at leveraging AI tools. Employers should "showcase your organisation’s use of cutting-edge tools," "create opportunities for young professionals to experiment with AI," and "provide training programs that blend technical upskilling with soft skills development" to attract and retain this generation.
Conclusion
The AI revolution is not a distant threat but a present reality, particularly challenging the traditional entry points into the workforce for recent graduates. While the scale of job displacement is debated, a consensus emerges that AI will automate repetitive tasks across white-collar and blue-collar sectors. However, this disruption simultaneously creates new opportunities and places a premium on uniquely human skills such as creativity, emotional intelligence, critical thinking, and complex problem-solving. Individuals and organisations in New Zealand, and globally, must proactively adapt through continuous reskilling, fostering innovative mindsets, and ethically integrating AI to ensure a future workforce that is empowered, not displaced, by this transformative technology.
