AI and Rising Experience Expectations Hamper New Grads’ Job Search

(SeaPRwire) –   Laura Ullrich feels for college graduates searching for jobs. As the director of economic research at job platform Indeed, she knows that struggle firsthand—her son, a data scientist, is earning his master’s degree this year. “Since I work in this field, many of his friends and their parents reach out to me for assistance,” she notes. “But the job market is really tough right now.”

For recent college graduates (ages 22 to 27), the job market took a turn for the worse late last year. Per the New York Fed, their unemployment rate rose to roughly 5.7% in Q4 2025—up from earlier months, and higher than the 4.2% rate for all workers and the 3.1% rate for college graduates of any age.

Graduates targeting the tech sector—like Ullrich’s son—face an extra challenge: what Ullrich terms “experience creep,” where employers demand more experience, leaving fewer chances for early-career workers. Indeed data shows that postings open to candidates with 2-4 years of experience fell from 46% in mid-2022 to 40% in mid-2025, while those requiring at least five years of experience increased from 37% to 42%.

This trend stems partly from supply and demand dynamics. “Right now, it’s an employer’s market, so they can afford to ask for more years of experience,” Ullrich explains. “If you can bring on someone with several years under their belt, why hire an entry-level employee?”

Employers’ preference for experienced candidates also ties into the growth of AI that can handle low-level tasks—the kind of routine work that often serves as a foot in the door for young professionals. A November study by Stanford economists found “significant drops in employment for early-career workers (22-25 years old) in AI-exposed roles like software developers and customer service reps,” even as “overall employment remains strong.” These findings back up the claim that “generative AI has started impacting entry-level jobs.”

Ullrich isn’t fully persuaded that AI itself is directly responsible. There’s little concrete proof that employers are replacing human workers with AI tools. “It’s hard to tell how much of this is AI technology disrupting jobs versus AI investments doing so,” Ullrich says. Increasing evidence points to the latter: companies are prioritizing capital spending over labor as they invest heavily in expensive AI infrastructure. For example, Oracle recently laid off many workers while pouring billions into building AI-focused data centers.

“Companies might be cutting labor costs due to the capital-labor tradeoff—similar to what happens when they suddenly invest in new equipment,” Ullrich notes. “That’s typical during tech disruptions, but this case is unique because AI can perform some of the tasks entry-level workers do, making it hard to separate the two factors.”

Experience creep is especially noticeable in tech, which is the weakest sector for hiring—giving employers a clear advantage. For example, U.S. postings for software developers (all levels) on Indeed are now 29% lower than pre-pandemic levels, while data and analytics roles are down by 38%.

In the short run, experience creep benefits tech firms, which can hire experienced workers at entry-level salaries. But this trend could backfire long-term. Tech job growth is concentrated in senior, higher-paying roles, Ullrich points out. “If you don’t train junior employees, how will you get the senior staff you need later?”

This is a question all companies will have to answer if AI eliminates large numbers of entry-level jobs, as predicted by CEOs like Anthropic’s Dario Amodei.

For the time being, Ullrich recommends that young graduates (including her son) embrace AI and “show companies that you and AI together are more effective than AI alone.”