Featured Article : Employers Choose AI Over Gen Z
A new British Standards Institution report says managers are increasingly substituting AI for junior roles, reshaping early careers and raising concerns for the UK labour market.
The Study and Report
The analysis comes from the British Standards Institution’s new insight report, ‘Evolving Together: AI, Automation and Building the Skilled Workforce of the Future’. It surveyed more than 850 business leaders across eight countries, including the UK, and used AI tools to review 123 company annual reports to see how often themes such as automation, upskilling, and training appeared. The study set out to understand how employers are using AI, which roles are being affected, and what this means for workforce development and future talent pipelines.
What Employers Are Doing
The key finding of the report appears to be that employers are now actively testing AI before employing people. The report says that nearly a third of business leaders said their organisation explores an AI solution before considering a human hire. Two in five said AI is already helping them reduce their headcount, while a similar number reported that entry-level roles had already been reduced or cut as AI took on research and administrative work. Looking ahead, 43 per cent said they expect further reductions in junior roles over the next year. In the UK, 38 per cent of leaders expect to cut junior positions, and three quarters said AI is already helping reduce headcount.
The language appearing in company reports appears to tell a similar story. For example, the term “automation” appeared nearly seven times more often than “upskilling”, “training”, or “education”, suggesting that businesses are now prioritising cost reduction and efficiency over long-term workforce investment. Over half of those surveyed also said the benefits of implementing AI outweigh the disruption to jobs.
Why?
It seems that employers are framing AI as a route to productivity and competitiveness. For example, 61 per cent cited productivity and efficiency as a main reason for investing in AI, 49 per cent pointed to cost reduction, and 43 per cent said AI helps fill skills gaps. However, the BSI report notes that competitive pressure may be driving these decisions as much as actual evidence of success. Many businesses are keen not to appear behind their rivals, even if financial results are uncertain.
What It Means For Gen Z And Early Careers
For younger workers entering the job market, it looks as though the picture is becoming more challenging. Adzuna data shows that UK entry-level vacancies have fallen by about a third since late 2022, with such roles now representing a smaller share of all job postings. Also, Indeed has reported a one-third year-on-year fall in graduate listings, marking the toughest market since 2018. The BSI study captures the employer side of this trend, where a quarter of bosses believe all or most entry-level tasks could now be handled by AI.
BSI’s leaders warn about the long-term cost of this approach. “AI represents an enormous opportunity for businesses globally, but as they chase greater productivity and efficiency, we must not lose sight of the fact that it is ultimately people who power progress,” said Susan Taylor Martin, chief executive of BSI. She called for long-term workforce investment alongside AI spending. Kate Field, BSI’s global head of human and social sustainability, added that prioritising short-term productivity over early-career development risks weakening the skills pipeline and deepening generational inequality.
Signals From The Labour Market
The UK labour market itself has cooled through the summer. Official figures show unemployment at 4.7 per cent between May and July, a four-year high. Economists caution against linking this entirely to AI adoption, although the technology is clearly reshaping entry-level hiring.
International bodies are also monitoring exposure. For example, the International Monetary Fund estimates around 60 per cent of jobs in advanced economies could be affected by AI, with roughly half of these potentially seeing lower demand for human labour. The Organisation for Economic Co-operation and Development (OECD) has also found that about a third of vacancies are in occupations highly exposed to AI, with the UK near the top of that range. These findings support the idea that early-career, white-collar roles are among the most vulnerable to rapid automation.
Implications For Employers And Businesses
For companies, the short-term benefits are obvious. For example, AI can automate repetitive tasks, consolidate workflows, and reduce costs in areas such as administration, research, and reporting. However, the medium-term risk is quite significant. If firms eliminate entry-level positions faster than they develop new skills, they could face shortages of experienced managers and specialists later on. BSI’s analysis shows that larger companies are moving faster on headcount reduction than small and medium-sized enterprises (SMEs), but they are also more likely to have a formal AI learning and development programme. That leaves SMEs in a difficult position, potentially expected to train the next generation of workers while competing for scarce talent.
What About ROI?
Return on investment is another area of uncertainty. For example, IBM’s 2025 CEO Study reported that only a quarter of AI initiatives had actually delivered expected results in recent years, and an MIT-linked study this summer found that most enterprise generative AI projects produced no measurable effect on profit or efficiency. An EY survey of nearly a thousand large companies reached similar conclusions, finding that many experienced early financial losses due to compliance issues, inaccurate outputs, and operational disruption. These findings suggest that while firms are enthusiastic about AI, many are still learning how to achieve any real value from it.
Employees And The Economy
For workers, especially Gen Z, the decline in entry-level roles reduces opportunities to gain essential experience. That has implications for career progression, pay growth, and social mobility. The BSI findings also highlight sentiment among managers, more than half of whom said they feel lucky to have started their careers before AI became widespread. This fuels perceptions among younger people that they face a more precarious employment landscape. The Trades Union Congress has also reported that half of UK adults worry AI could alter or take their job, underlining growing anxiety around the technology’s impact on employment.
At the wider economic level, a balanced transition is crucial. For example, international studies suggest that AI can raise productivity if it’s paired with investment in human skills. The OECD links high AI exposure with rising demand for management, social, and digital capabilities, while the IMF stresses that policy and employer choices will determine whether AI adoption produces better jobs or simply less work. It should be noted that the direction is not inevitable, but depends on how businesses and governments respond.
Other Stakeholders
For AI providers, the BSI data signals strong short-term demand for automation tools, especially those aimed at streamlining office-based and knowledge roles. It also points to increasing scrutiny. Employers are demanding clearer evidence of ROI, and policymakers are watching workforce impacts closely. Some commentators, for example, are warning about inflated AI valuations, and the IMF has highlighted the risk of market concentration among a few large AI firms. For educators and training providers, the opportunity is equally clear. If businesses are automating junior roles, then building AI literacy and human-centred skills such as creativity, empathy, and collaboration into education and early careers becomes increasingly essential.
Challenges And Criticisms
Taking a step back, three key issues appear to stand out from all this:
1. An over-reliance on automation without parallel investment in upskilling risks hollowing out future leadership pipelines. The imbalance in corporate language, where automation dominates over training, suggests short-termism.
2. ROI from AI remains inconsistent. For example, surveys from IBM, MIT, and EY show that many organisations either struggle to capture financial gains or face early project losses, raising doubts about the business case for replacing human development with automation.
3. There is now a widening gap between large and small employers in their ability to offer AI-related training. That leaves SMEs carrying much of the responsibility for developing Gen Z talent while lacking the same resources as bigger corporations.
BSI’s leaders emphasise that an AI-enabled workforce still needs to be developed. The report concludes that “the future belongs to skills that machines can’t replicate—for example, creativity, empathy, and collaboration.” Businesses, it says, must evolve to nurture these human strengths alongside technical literacy if they want to remain competitive and sustainable.
Looking Ahead
Looking ahead, hiring trends at the entry level are likely to be the key measure. Job-board data through 2025 already shows fewer openings in several professional fields even as AI-related roles expand. Policy direction will also be crucial. The British Standards Institution and other regulators are expected to continue shaping frameworks for responsible AI adoption. Measuring productivity outcomes and workforce investment side by side will determine whether this phase of AI-driven restructuring delivers lasting value, or leaves a generation behind.
What Does This Mean For Your Business?
The findings in the report suggest that the next stage of AI adoption will test how well businesses balance efficiency with long-term workforce stability. Employers that continue cutting entry-level positions without replacing them with structured learning or graduate pathways could soon face internal skills gaps that limit growth. For UK businesses, this raises a strategic question about sustainability. For example, automation can reduce costs, but without a consistent flow of skilled recruits, firms may find themselves competing for an ever-smaller pool of experienced professionals, pushing up wages and weakening future competitiveness.
There are also wider economic implications to consider. A reduction in entry-level hiring may suppress social mobility and delay young workers’ transition into full employment, which in turn affects consumer spending and tax revenues. Economists have warned that productivity gains from AI will only materialise if human capital keeps pace with technology. For policymakers, the challenge will be encouraging responsible innovation while safeguarding the foundations of the labour market. The BSI’s call for long-term thinking reflects growing concern that the UK’s current AI strategy must be paired with investment in training and skills if the benefits are to be shared across society.
For AI companies, the trend creates both opportunity and risk. Demand for automation is strong, but expectations are rising. Businesses are beginning to scrutinise outcomes more closely and may demand clearer, measurable returns. Providers that can demonstrate reliability, data security, and real efficiency improvements will be best placed to maintain momentum once early enthusiasm fades. Education and training providers also stand to gain if they can help bridge the gap between technical capability and human development, ensuring that younger workers can work effectively with, rather than against, AI systems.
Beyond the headline story here, the more rounded message emerging from the BSI’s report, is that the path forward cannot rely solely on automation. Businesses, governments, and educators will need to work together to build a future workforce that complements AI rather than competes with it. Without that alignment, the short-term pursuit of productivity could come at the long-term expense of capability, resilience, and opportunity.
