The challenging labor market is affecting all generations, including Gen Z who are competing for entry-level roles. Born 1997 to 2012, Gen Z is a demographic considered to be unique for their level of digital savviness and a lack of familiarity with life without screens. Although many workplaces strive to be more digital than ever before, this aspect is not currently helping digitally savvy Gen Z applicants.
Entry Level
In June, iCIMS, a talent acquisition software company, looked at the state of entry-level hiring and its impact on Gen Z new graduates. The report found entry-level applications are up 22% year-over-year, closely tracking the overall application growth of 21%. Yet job openings are still flat, and new hires are down 8% since May 2024, and new graduates are looking at a 6.6% unemployment rate. This is the highest unemployment rate in more than a decade, excluding the pandemic years.
Pace of Hiring
Even with a slight rise among entry-level hires, the pace of hiring is unequal to the supply of available candidates, and competition is an ongoing issue for job candidates of all ages. Gen Z new graduates in particular face a trifecta of concerns including a lack of the right experience or skills (21%), ongoing economic uncertainty (19%) and more competition for jobs (19%).
The iCIMS report found an average of 36 applicants per opening. This is a 22% increase from last year. The overall job market saw a similar increase with an average of 34 applicants per opening, an increase of 18% from last year.
Role of AI in Hiring
Gen Z job applicants also experience a disconnect when it comes to showcasing their skills and talents with recruiters and hiring managers. In many cases, recruiters use skill-based practices, but experience and education are still considered important. Forty-four percent of Gen Z surveyed said they would welcome job simulations to better highlight their skills to recruiters. That said, a third believe their skills are not valued by employers.
Surprisingly, this tech-savvy generation may have blinders on when it comes to using artificial intelligence (AI) in the workplace. 56% said AI will play a role in future jobs but 44% aren’t sure or don’t expect to use AI tools, according to the ICIMS report. This could be an important distinction with 96% of recruiters thinking entry-level workers will manage AI agents in the next two years.
“With application volume surging, recruiters may default to shortcuts and miss out on candidates with sharper AI instincts than many tenured hires,” said Trent Cotton, head of acquisition insights, iCIMS. “Forward-thinking companies will tap into the AI-native class of 2025 to boost productivity and modernize workforce skills.”
