“For the first time in modern history, a bachelor’s degree is no longer a reliable path to professional employment,” said Gad Levanon, the chief economist of the Burning Glass Institute. That is a very big shift that is happening within the current job market that is causing companies to have to rethink all that they once thought they knew about talent attraction.
Recent data published by the Federal Reserve Bank of Cleveland shows that recent high school graduates are currently entering the labor force at a slightly faster pace than college-educated individuals. For example, data collected in June and July of 2025 revealed that the percentage rates of recent high school and college graduates between the ages of 22 and 27 who were employed or had stopped actively looking for work were 41.5 percent and 37.1 percent, respectively. Recent college-educated individuals have been entering the labor force at a faster pace with lower unemployment rates for the previous forty years.
There are several layered reasons for this. “The first reason has to do with the rising number of college-educated individuals in the labor force, which has been a result of the collaborative efforts of the public and private sectors over the past few decades to make college and university education more accessible.” This essentially means that there has been more competition in the same number of initial jobs in the labor market. On the other hand, according to the historical statistics regarding the job finding rate among recent college graduates, which has been constantly declining since 2000, the adoption of AI before the pandemic will not influence this. According to the researchers of the Fed, “may be affecting job-finding prospects in some cases.”
However, the role of AI in the recruitment of entry-level workers cannot be denied, especially in the tech industry. AI is used by companies because it is efficient and cost-effective, and this results in there being less need for entry-level staff. According to Nich Tremper, the senior economist at Gusto: able to use AI to fill the gaps as they’re thinking about their overall hiring strategy. However, the available opportunities can be measured. According to 2025 Graduate Employability, published by the Cengage Group, only 30% of the graduates in the class of 2025 were working full-time in their field, a decline from 41% in the class of 2024. At the same time, 76% of the employers also stated that they are hiring the same number or fewer new college hires than they did last year.
These were attributed to changes in the labor market, AI tech, or inflation. As for hiring managers, it’s not that degrees have less value, it’s that both the value of individuals with degrees and individuals who get their degree in the middle of their life still have value today, since their rate of unemployment is lower than the average rate of unemployment. It all comes together in entry, that is, the initial hiring process, where there are less traditional measures of preparedness that have been able to work effectively. Grade inflation makes the GPA less valuable, while AI tools in application and interviews have reached the point of ubiquity, so it’s simply ineffective, according to Blair Ciesil, a partner at McKinsey & Company.
What they’re trying to get is something like difficult fields of study and double degrees. This has led some organizations to question the point of degrees. Skills-based hiring, while an emerging pattern rather than a slowly growing trend, provides an opportunity for the pool of qualified workers to increase. As found in the Workforce Decoded Report by WGU, 78 percent of employers find experience as valuable as, if not more valuable than, a degree, and 86 percent find non-degree credentials a strong indicator of readiness for the workforce.
However, only 46 percent of them plan to increase the use of skill-based hiring practices in the upcoming year, with two-thirds identifying the challenge of their inability to verify their competence levels and lack of standards in evaluation. It furthermore points out that there should be a paradigm shift in the mindset of business leaders. Through intern, apprentice, and portfolio analyses, it would furthermore be possible to tap into potential employees, regardless of whether they have degrees or non-degrees. Those in charge of running educational and business institutions should in fact have to collaborate in trying to fill the readiness gaps, seeing that 35 percent of workers in the workforce in their second year of graduation wanted industry input on their readiness for the real-world workforce.
It gives a clear indication that the credentials don’t define readiness in today’s modern workplace. Seeing that school-leavers can equal, if not outdo, college-leavers in terms of overall success, those businesses that can effectively commit behind readiness in terms of educational qualification, combined with malleability in terms of technology, would be the most in-demand workplace.
