Is University Worth It in the AI Job Market?

TL;DR

College graduates still earn more over a lifetime, but entry-level hiring for new grads has slowed over 20% in both the US and UK as AI reshapes work. On Indeed, most new roles last year required no formal education, and job starts have surged, with a 60% rise in people launching their own business in the past year.

Transcript

Wherever you're watching, welcome to Talking Business. Now, when this year's crop of university levers think back to when they started their degrees, they couldn't have dreamt of some of the changes that had impact the jobs market they'd graduate into. In less than the time of a three-year college course, we've seen the launch of Chat GPT. Predicti... Read More

Key Insights

• Hiring rates for entry-level work by new grads slowed by over 20% in the last year, according to LinkedIn, and this decline held true in both the US and UK job markets.
• Goldman Sachs research found young tech workers are losing out to machines more quickly than any other group, while the bank earlier predicted AI could replace 300 million full-time jobs.
• A majority of new roles on the job site Indeed last year required no formal education qualifications at all, and jobs specifying a degree fell by 3% across more than eight out of ten occupations.
• College still pays off long-term, as LinkedIn's chief economist notes people who attend typically earn more over their careers, but non-degree paths increasingly offer strong opportunities.
• Global demand for skilled trades is high, with roles like electrician, welder, plumber, and machine tooler offering strong prospects that do not require a college degree.
• People starting their own business rose 60% in the last year and threefold over the last five years, which LinkedIn identifies as one of the most striking trends in its data.
• The key to starting a business is needing to start one rather than wanting to, and founders should aim for one paying customer to prove the concept rather than fixating on the end goal.
• Working for yourself is hard at the beginning but gets easier, while working for someone else is easy at first but grows harder as bosses and markets change and layoffs can happen at any moment.

Questions & Answers

Q: Is university still worth the money in the age of AI?

According to LinkedIn's chief economist, who is both an economist and a parent about to send her own child to college, the advantages of college are still there because people who go typically earn more over the lifetime of their career. However, she notes there is increasingly a lot to offer if young people take a route of not going to college, so the value now depends more on the individual's path and goals rather than being an automatic guarantee.

Q: How much has entry-level hiring for new graduates slowed?

LinkedIn, described as the world's biggest professional network, reports that in the last year hiring rates for entry-level work by new grads slowed by over 20%. This slowdown was the case for both the US and the UK. Contributing factors include uncertainty around trade policy and tariffs, a changing interest rate environment, and companies figuring out how much they can rely on AI as a productivity tool to handle simple and even more complex tasks.

Q: What does the research say about AI replacing jobs?

The investment bank Goldman Sachs predicted that AI would replace 300 million full-time jobs. More recently, Goldman revealed new research showing that young tech workers are losing out to machines more quickly than anyone else. This trend has also been noticed at LinkedIn. Companies are now looking at AI as a potential productivity tool and figuring out exactly how much they can rely on it, which is contributing to slower hiring of new graduates.

Q: Do most jobs still require a college degree?

No. On the job site Indeed last year, a majority of new roles did not require any formal education qualifications at all. The number of jobs that specified candidates needed a degree fell by 3%, and that fall came in more than eight out of ten occupations. This reflects a broader shift where employers are dropping requirements for an expensive college degree across most types of work.

Q: What careers are in demand without a college degree?

There is huge global demand for people with trades experience, according to LinkedIn's chief economist. Specific examples she cites include electricians, welders, plumbers, and machine toolers. She describes a huge demand for skilled labor in this set of occupations, which does not necessarily require a college degree. For young people weighing their options, skilled trades represent a strong alternative path to traditional degree-dependent careers.

Q: What advice should new graduates follow in this job market?

LinkedIn's chief economist advises graduates not to get too attached to any particular career outcome or industry. She encourages people to feel much more flexible about acquiring skills and experiences. She also points to a striking trend in the data: a 60% increase in people starting their own business in the last year and a threefold increase over the last five years, suggesting entrepreneurship is becoming a major path for new graduates.

Q: How do you start a business according to Simon Squibb?

Simon Squibb says the key is not wanting to start a business but needing to start one. He advises taking it one step at a time rather than being overwhelmed by too many options. The most important first move is to get one customer who will pay you, just to have proof of concept. Securing a single client creates a sense of belief that the idea can come to life. He stresses that taking risk is essential, because without risk you do not get luck.

Q: Why might starting a business be less risky than a job today?

Simon Squibb argues that working for someone else means outsourcing the risk and giving up control to your boss or their boss. Someone employing AI today could cut thousands of workers, and that could be you, and without equity in the brand you have no safety net. He says working for yourself is hard at the beginning but gets easier over time, while working for someone else is easy at first but gets harder as bosses change, markets change, and people can be fired at any second.

Summary & Key Takeaways

• This year's graduates face a historically uncertain jobs market shaped by ChatGPT's launch, changing interest rates, and trade policy. LinkedIn reports entry-level hiring for new grads has slowed over 20% in both the US and UK, and Goldman Sachs found young tech workers are being displaced by machines faster than anyone else.

• LinkedIn's chief economist says college still delivers higher lifetime earnings, but non-degree routes increasingly offer value, with huge global demand for trades like electricians, welders, and plumbers. Her advice to graduates is to stay flexible, not get attached to a single career outcome, and focus on acquiring diverse skills and experiences.

• Guests Oliver Dalabani, a 22-year-old who sent 200-plus applications before launching skincare brand Ancient Standard, and serial entrepreneur Simon Squibb argue entrepreneurship is now less risky than employment. Both stress taking one small step at a time, securing a single paying customer, embracing risk, and enjoying the work as keys to building a business.