How AI Created the ‘Entry-Level Squeeze’ and 3 Solutions to This Talent Crisis

AI has delivered a myriad of solutions to the workplace. And a handful of risks.

The newest: The “entry-level squeeze.”

Many organizations have cut back on early career positions, relying on artificial intelligence to fulfill the duties or take over the tasks that employees once handled.

Even though organizational leaders have chosen to eliminate some roles, 76% of HR pros believe it will lead to a significant reduction in hiring, creating this entry-level squeeze, according to Avature’s AI Impact Report.

“It’s not a short-term fluctuation. It’s structural,” says Dimitri Boylan, CEO and founder of Avature. “As AI absorbs routine, task-based work, companies are naturally reducing the volume of early-career positions. That part is predictable. What’s less predictable is whether they’ve replaced the developmental pathway those roles once provided.”

AI Ambition Outpaces Execution

Everyone is excited to use and maximize AI in the workplace. But excitement doesn’t usually create the best execution.

“AI didn’t create the entry-level squeeze,” says Boylan. “It accelerated it.”

What’s happened now, many organizations have gotten ahead of themselves: “Our research shows a clear gap between AI ambition and AI execution, where most organizations are experimenting but very few are embedding AI into a coherent workforce strategy. The result is predictable: routine work disappears faster than developmental pathways are rebuilt. Over time, that hollows out the early-career pipeline,” Boylan explains.

Entry-Level Squeeze Now, Problems Later?

Companies that have slowed the entry-level hiring now might not feel the squeeze yet. Young employees likely will, though. We know starter jobs are essential to skill development—both soft and technical skills. Naturally, tomorrow’s leaders gain wisdom and experience on the front line.

“Entry-level jobs weren’t just about output. They were apprenticeship layers. They built context, judgment, and operating discipline. If organizations eliminate that layer without rethinking how capability is built, they risk weakening their future leadership pipeline,” says Boylan.

And while that seems like a practical thing to do now, it potentially leaves a hole down the line: Companies won’t have capable employees to step into leadership roles.

But that’s not the only risk.

Expected Increased Costs

HR pros believe there will be hidden costs, too. Specifically:

• 30% foresee problems with the future leadership pipeline
• 15% anticipate increased cost because of an over-reliance on experienced hires, and
• 11% foresee a loss of institutional knowledge transfer.

“When organizations hollow out their early-career layer, they may gain efficiency in the short term — but they also weaken the foundation of future leadership,” the Avature researchers noted. “If entry-level hiring declines broadly across the market, the impact compounds, with companies relying more heavily on external hires from a shrinking talent pool at increased cost to the business.”

Recent College Grads Feel the Squeeze

Recent college grads make up the bulk of entry-level employees in corporate environments. And the numbers speak volumes about the squeeze. Nearly 6% of that population — roughly those aged 22-27 — are unemployed, and 43% are underemployed. That’s at its highest level since 2020, according to the latest data from the Federal Reserve Bank of New York.

Cameron Hilliard, a 2025 West Virginia University graduate with a degree in criminology, is one of the underemployed. She’s struggled to find a full-time job in her field.

“It seems like some of the basic roles people would normally start in are being automated, so it can make it feel harder to get your foot in the door,” Hilliard says.

Hilliard, like many recent college grads, has kept the part-time waitressing job she’s had since high school. She also works part-time professionally at her family’s industrial technology business. But it’s outside of her college degree.

“In some cases, it honestly feels like positions are being replaced with AI, and then entry-level applicants are expected to come in with more experience right away, but aren’t really given the opportunity to gain that experience,” Hilliard says. “The job market is already tough for entry-level candidates, and I think AI has just made it even more competitive and difficult for us.”

Finding a Place for New Hires

Boylan, the Avature CEO, has some promising news for the WVU grad and others like her: “There will always be first jobs. The question is what those jobs are designed to build. As AI absorbs repetitive execution, junior employees will be hired less for processing tasks and more for developing judgment, interpreting context, building relationships and understanding how the business creates value.

“In that model, AI is a tool they operate with, not a competitor they’re replaced by. The companies that navigate this well will redesign entry-level roles intentionally, ensuring they remain developmental, not accidental casualties of efficiency.”

Protect Your Leadership Pipeline

Whether you’ve slowed your early-career hiring, you face an entry-level squeeze or you just want to ensure you maintain a strong leadership pipeline, here are tips to help:

1. Redesign Entry-Level Roles

The Avature researches suggest redesigning entry-level roles for an AI-first workplace. Help them come in for the workplace you want to become. As AI picks up routine tasks and execution, have entry-level employees pick up tasks that build judgment, such as supervising AI outputs, performing quality control, rotating across functions and gaining exposure to decision-making inputs.

You might want to collaborate with universities and other education partners in your community to shape AI fluency before talent comes to you.

2. Forget Linear Career Paths

Entry-level roles anchored linear career paths from that clear starting point through traditional skill and leadership development. Not so much anymore.

HR leaders will need to think about more dynamic approaches to workforce and skills planning, the Avature researchers say. You’ll want to try models that allow for shifting career paths, anticipate emerging capability gaps, and continuously align hiring, development and mobility decisions.

Boylan adds, “That means accelerating business literacy earlier through structured rotations, cross-functional exposure and real accountability for outcomes.”

3. Be Deliberate

Leadership development won’t come as naturally in an AI-driven workplace. Most employees will be task-oriented, relying more on AI, and will be less likely to take the lead.

“Leadership development has always been about exposure and judgment, not just task accumulation. In the past, entry-level roles naturally created that exposure,” says Boylan. “Today, as automation absorbs routine work, development has to be designed more deliberately.”

So it might be time to develop leadership training. You don’t have to force entry-level employees to take it. Some will always be happy in their AI-fueled world. But many will be eager to become leaders.