Nearly half of hiring managers would rather invest in AI tools than hire and train recent Gen Z graduates for entry-level jobs, according to a ResumeTemplates.com survey published June 23. The same survey finds that 55% of companies have already moved entry-level hiring budgets toward AI, underscoring the technology's impact on early-career opportunities.
The data behind the shift
The survey revealed that 48% of hiring managers would choose AI investment over hiring and training a recent college graduate. More than half (55%) of companies have already shifted entry-level hiring budgets to AI tools, and 45% have restructured their work so that one senior employee using AI handles the output of multiple entry-level hires.
Beyond efficiency, respondents cited a desire to bypass the perceived shortcomings of Gen Z talent. They said that investing in AI means no early quits (37%), no management hand-holding (31%), no professionalism issues (39%), and no workplace drama (30%). Additional practical benefits included faster onboarding (61%), round-the-clock availability (52%), and lower costs (48%) compared to entry-level graduates.
"This is not an uncommon strategy when new technology is introduced," said Julia Toothacre, chief career strategist at ResumeTemplates.com. "Companies are still figuring out how to implement AI, and its true impact on the work, which will vary by industry and business type." Toothacre added that new grads will face stiffer competition from older workers who have been laid off in recent years. "Unless a position is specifically designated for recent graduates, new grads should expect significant competition in the 2026 market," she said.
Risks to the talent pipeline
Organisations have been warned that replacing entry-level employees with AI can disrupt the pipeline that supplies future senior leaders. A previous report from Cognizant and Pearson noted that entry-level roles are likely to evolve into positions where employees supervise or manage AI systems. Ali Bebo, chief human resources officer at Pearson, said the most successful organisations in the AI era will focus less on replacing tasks and more on building capabilities that help humans and AI work together. "The future belongs to organisations that combine AI innovation with a deep understanding of how people learn, develop, and apply new skills in the real world," Bebo said. That starts with early-career talent, she added.
Why this matters for HR leaders
HR leaders are at the center of this tension-capturing AI's near-term cost savings without hollowing out their management pipeline. The survey data indicates that many companies are already redirecting entry-level budgets. The next step is to redesign those roles rather than eliminate them, creating positions that manage and audit AI outputs. Developing the skills to lead this transition is critical. HR professionals can build the necessary expertise through programs like the AI for HR Managers Courses, which cover recruitment automation, talent management, and AI-driven workforce planning.
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