The Great AI Reckoning and the Graduate Gap
Announcement posted by 360PR 11 Mar 2026
Entry-level jobs could be the first quiet casualty of workplace AI adoption, with 45% of employers expecting to hire fewer junior roles within three to five years, according to people2people Recruitment's latest workforce research. Additionally, almost seven in ten employees (69%) say their employer is not preparing them for an AI-driven future, and a further 15% say the support they are getting is not sufficient.
Key findings:
- 45% expect fewer junior roles in 3-5 years (vs 14% in 2026)
- 75% plan AI learning and development investment in 2026 (13% significant)
- 39% expect AI to impact >25% of processes (including 9% >50%)
- 69% say employers are not preparing them for AI (plus 15% say support is insufficient)
- Barriers: accuracy (64%), cybersecurity (63%), no formal AI policies (38%)
"What we're seeing is a capability gap opening up in real time. Employers are investing, but employees say they are being left behind. When 69% of employees say they're not being prepared, and another 15% say what's on offer isn't enough, that's not a future risk, that's a current workforce issue," says Catherine Kennedy, NSW Managing Director at people2people Recruitment. "The intention to adopt AI is accelerating, but many organisations haven't yet translated that momentum into practical, day-to-day enablement for their people."
On the employer side, investment intent is rising quickly. Three in four employers (75%) say they plan to invest in AI-focused learning and development in 2026, with 13% making significant commitments, 41% starting their journey, and 21% planning future investment.
"It's encouraging to see 75% of employers planning to invest in AI learning and development in 2026, including 13% making significant commitments," says Kennedy. "But investment alone isn't the finish line. The real differentiator will be how well organisations build capability at scale, embed change management, and create governance that keeps pace with adoption."
That adoption is expected to be meaningful in many organisations this year. 39% of employers expect AI to impact more than a quarter of their business processes in 2026, including 9% anticipating impacts exceeding 50%. However, 37% expect minimal to no impact, pointing to uneven uptake across industries and business models.
Where is investment concentrating?
Employers report AI activity clustering most heavily in data and commercially-driven functions, including:
- Data analytics (38%)
- Accounting and finance (35%)
- IT (35%)
- Operations and processes (33%)
- Customer experience (31%)
- Marketing and sales (30%)
"We're seeing AI investment focus where the productivity and insight gains are clearest, with data analytics at 38%, and finance and IT both at 35%, followed by operations at 33%," says Catherine Kennedy. "But the human side of adoption, how leaders bring teams with them, build confidence, and redesign work responsibly, is what will determine whether these investments translate into real performance."
The Graduate Gap: Junior roles under pressure
One of the most significant long-term shifts flagged in the report is the projected impact on early-career pathways. In 2026, 14% of employers expect to hire fewer junior roles, but over the next three to five years, that figure jumps to 45%.
"The numbers are a warning signal for early-career talent. When the share of employers expecting to hire fewer junior roles rises from 14% in 2026 to 45% in the next three to five years, we risk narrowing entry-level pathways at exactly the moment we need new capability," says Kennedy. "If junior work is increasingly automated, organisations must redesign pathways, not eliminate them, or we'll create a long-term talent bottleneck."
Across the same timeframe, employers anticipate major structural shifts: creating new AI-focused roles (15% in 2026 vs 46% in three to five years), redesigning roles around AI (25% vs 45%), and suppressing roles (13% vs 40%). Demand for specialist skills is also expected to climb (18% vs 38%), alongside increased reliance on contract and temporary labour (19% vs 34%).
"This is not just incremental change. Employers are forecasting a step-change in workforce design. In the next three to five years, nearly half expect to be creating AI-focused roles (46%) and redesigning roles around AI (45%), while 40% anticipate suppressing roles altogether," says Kennedy. "That's why workforce planning can't sit behind the technology conversation. It has to lead it."
What is slowing implementation?
Employers cite practical and governance barriers. 64% are concerned about accuracy, 63% highlight cybersecurity risks, and many point to foundational readiness issues, including lack of in-house skills (46%), poor data quality (45%), and system integration challenges (43%). More than a third (38%) report having no formal AI policies in place, while 33% cite regulatory uncertainty and 29% limited budgets.
"The conversation has moved beyond 'will AI matter?' to 'can we implement it responsibly and safely?'," says Kennedy. "When 64% cite accuracy concerns and 63% point to cybersecurity, it's clear trust and governance are front of mind. And if 38% of organisations still have no formal AI policies, that's a risk exposure, not just a productivity gap."
About people2people: people2people is an Australasian recruitment company built on an established reputation for providing professional and personalised recruitment services since early 2005. At people2people recruitment, their focus is on identifying potential today to build careers and businesses of tomorrow. Recruitment expertise includes accounting & finance, business support, executive, government, human resources, legal, marketing & digital, property, sales, supply chain management and technology.
For further information or interview requests, please contact:
Lisa Solomons @ 360 PR | e: lisa@360pr.com.au | p: 0416 175 518