The first rung is disappearing. What happens to business when young people cannot get into work?

Britain’s largest retailers have issued an unusually blunt warning about the prospects facing young people. In a letter coordinated by the British Retail Consortium employers including Marks & Spencer, Sainsbury’s and Tesco said the country’s “ladder of opportunity” was wobbling and called for government action to support entry-level recruitment and progression.

The language reflects a problem that has moved beyond periodic concern about graduate vacancies. More than one million people aged 16 to 24 in the UK were outside education, employment or training during the first quarter of 2026, equivalent to 13.5% of the age group. Clothing retailer Next’s chief executive Simon Wolfson has described a “dramatic fall” in entry-level jobs, with the retailer receiving 19 applications for each shop role compared with 10 two years earlier.

Retail has particular reason to be concerned. For generations it has offered work to people with limited qualifications or previous experience and allowed some to progress from the shop floor into management. M&S chief executive Stuart Machin started by pushing trolleys at 16. His company has now announced 1,000 training places for 16- to 24-year-olds over 18 months as part of an attempt to rebuild that route.

Lidl GB is taking a different approach to the point at which people enter recruitment. It is reserving 10% of interview slots for entry-level jobs in every new store over the next year for people who have been unemployed for at least six months. It will also provide at least 480 ringfenced warehouse interviews, remove the requirement for a CV and work with the Department for Work and Pensions and local employability partners to identify and prepare candidates.

“For people who are facing barriers into employment, getting that first opportunity can be the hardest step,” says Stephanie Rogers, chief people officer at Lidl GB. “That’s why we’re fast-tracking interviews across the nation to help people get a foot in the door.”

These interventions arrive as employers around the world are making a further set of decisions about entry-level work. Artificial intelligence is absorbing many of the routine activities once assigned to junior employees and changing the economics of hiring people who need time, supervision and structured development before becoming fully productive.

But while it’s convenient to tell a simple story in which AI is destroying the first rung of work the evidence points to a more complicated problem involving technology, weak economic growth, employment costs, cautious recruitment and long-standing failures in the transition from education into work.

Entry-level hiring was weakening before ChatGPT

The World Economic Forum’s new report, Artificial Intelligence and the Future of Entry-Level Work, produced with PwC, finds a clear slowdown in early-career recruitment. The decline is most pronounced in some occupations with high exposure to AI, and a widely cited US study found a 16% fall in entry-level employment in AI-exposed fields since late 2022.

Job postings for early-career workers in several sectors had started to soften before the public launch of ChatGPT in November 2022. UK data within the report shows weaker entry-level hiring in knowledge-intensive sectors, including financial services, information and communication and professional, scientific and technical work. Similar pressure appears in some sectors with lower AI exposure.

Employers interviewed for the report repeatedly describe greater caution over adding headcount, shaped by cost discipline and economic uncertainty alongside expectations about automation.

“AI is often the headline but the reality is more complex,” one senior people leader told the report’s authors. “When hiring slows technology becomes an easy explanation, even when economic uncertainty or cost pressures are the bigger drivers.”

This means organisations cannot plan early-career recruitment around confident predictions of how many jobs AI will remove. What they can do is examine which work is changing, where recruitment has already declined and whether today’s efficiency decisions are eroding the supply of capability the business will require later.

The global exposure is substantial. The WEF estimates that 37% of young workers are employed in occupations facing medium or high exposure to AI-driven task change. The proportion rises to 63% in Europe, 69% in North America and 75% in Eastern Asia. Financial services, information and communication, professional services, science and education are among the sectors with the greatest exposure.

Exposure does not tell us how many jobs will disappear but it does show where tasks, skills and expectations are likely to change most.

The work disappearing from junior roles was also how people learned

At Davos earlier this year AI pioneer Andrew Ng described the widening advantage held by people who know how to work with the technology.

“AI will not replace most workers,” he said during a session on the reshaping of corporate ladders. “But people who don’t use AI will be replaced by people who do.”

The remark was widely shared as advice to individual workers. But the implications are deeper: any of the activities AI can now perform used to form the basic training ground of early professional life: preparing a first draft, screening applications, analysing data, writing code, assembling client documents and managing routine records.

These tasks were rarely the most satisfying parts of a role but they exposed beginners to volume, variation and the standards by which work was judged. 

CEO & Founder at Workera Kian Katanforoosh, speaking in another Davos session, summarised the technology accurately: “AI does tasks, not jobs.” Yet jobs are learned through tasks. When some of the foundational work disappears the old route from novice to experienced practitioner becomes less dependable.

Himanshu Palsule, chief executive of Cornerstone OnDemand, argues that junior employees should spend less time on repetitive production and more time evaluating AI outputs and exercising judgement. This could give people access to complex work earlier but it also assumes that they can judge an output without having built enough knowledge of how good work is produced.

The WEF report identifies cognitive atrophy as one possible result of poorly designed AI use. It also records concerns among employers that early-career employees are moving into complex work before developing sufficient domain knowledge and that AI-generated material is sometimes accepted without rigorous review.

One leader interviewed for the report described the risk as “work slop”: organisations producing a greater volume of weaker work because AI had been added to existing processes without a serious redesign of jobs.

The efficiency gains may be real – some 68% of entry-level employees surveyed by PwC said AI had increased their productivity. But their working experience had not necessarily become easier, with 45% also reporting that they were spending more time working.

The business may save now and pay later

Entry-level hiring operates on a delayed return. A new employee requires training, management attention and room to make mistakes before their contribution fully repays the investment. When budgets tighten then reducing that intake can appear commercially rational.

The calculation changes when viewed across the workforce. Today’s junior employees become the experienced specialists, managers and leaders organisations expect to recruit several years later. If enough businesses reduce entry-level hiring or hollow out the development within those jobs then experienced talent becomes scarcer and more expensive.

As one employer told the WEF: “We have a build, buy, borrow approach to getting the right talent for our business. If we all stop building entry-level talent we won’t be able to buy it elsewhere in the future.”

The pressure is concentrated at the base of organisations. Three-quarters of leaders in some major industries expect significant AI-related realignment of junior employment over the next three years, almost twice the expectation for middle or senior roles. Another executive captured the longer-term danger: “A lot of the efficiency gains are coming from the base of the organisation. The risk is that if you remove too much of that layer you weaken the pipeline that feeds the rest of the business.”

The People Space’s reading of this evidence is that entry-level employment can no longer be treated as a by-product of growth. It needs an explicit place in workforce planning, linked to the capabilities the organisation expects to need in three, five and 10 years.

Some employers are already making that choice. Dropbox has expanded its internship and new graduate programmes by 25% while embedding responsible AI use into roles and assessments. The company says its interns and graduate recruits outperform externally hired peers on retention, engagement, performance and promotion speed, with 65% promoted by their second year and 87% by their third.

Hitachi continues to require early-career engineers to learn coding fundamentals before relying heavily on AI-generated code. The aim is to preserve their ability to validate outputs and challenge errors. Allianz pairs new joiners with experienced colleagues so that digital confidence develops alongside business context and professional judgement.

These organisations are retaining routes into work while rebuilding the learning that takes place within them.

Access to opportunity is also a question of job design

The immediate challenge begins before development. Many young people cannot gain the experience demanded by jobs presented as entry level.

Removing CVs and guaranteeing interviews, as Lidl is doing, changes one part of that system. Work placements and employer-backed training can create evidence of readiness for candidates who lack networks or a conventional employment history. Smaller employers may also have a distinctive contribution because young recruits can work close to decisions and acquire genuine responsibility quickly.

“Large employers matter but much of Britain’s economy is built by SMEs,” says Sam Liu, founder of the social impact programme TechStart. “These businesses can often provide something unique: direct exposure to decision-making, responsibility from an early stage and close working relationships that help young people develop confidence and skills quickly.”

TechStart places graduates, T Level students and young people who have been outside employment or education into live commercial and public-facing projects. Participants have helped build websites, supported events at the Old Bailey and developed technology showcased at international industry events. One young person joined after two years of unemployment and difficulty securing an entry-level retail role before moving into paid work.

Liu is candid about what such opportunities require from the employer.

“Taking on young people is not easy for an SME,” he says. “It requires investment, management time, patience and a willingness to accept mistakes as part of the learning process. But that is precisely why SMEs should be supported and recognised as part of the solution.”

This is where public policy, education and employer practice meet. Financial incentives may reduce the risk for smaller organisations. Better coordination with schools, colleges and universities can bring workplace experience closer to learning. Employers still control the decisive element: whether a young person is offered substantive work and sufficient support to learn from it.

What should HR protect when entry-level work changes?

The old model of progression cannot simply be preserved unchanged. AI will continue to take over routine activity and young employees will increasingly be expected to use it from their first day. The key is to decide which experiences must remain because they build judgement, domain knowledge and professional confidence.

The WEF proposes four areas for action: job access, job design, talent pipelines and alignment with education. For employers these come together in a set of immediate workforce questions.

• Does the organisation have a deliberate target for early-career recruitment? 
• Which automated tasks previously taught people how the work was done? 
• Where should beginners still work from first principles before using AI? 
• What new experiences will build the judgement once gained through repetition? 
• Do managers have the time and ability to coach? 
• Can candidates demonstrate potential without already holding the experience the organisation is meant to help them acquire?

AI may help new employees contribute faster and gain access to richer work earlier but these benefits depend on employers constructing a route through which capability can develop. Technology will not design this route for them.

The first rung of work has always carried more weight than its position suggests. It gives individuals income, confidence and an occupational identity while giving organisations a supply of people who understand how the business works from the inside. Allow it to disappear and the gap will eventually be visible throughout the organisation, long after the immediate saving has been absorbed.