In 2026, graduate hiring is in trouble, and the numbers aren’t subtle about it. 

Australian graduate job postings had already fallen 24% in 2024 compared to the year before, and were tracking a further 16% lower in early 2025. By December 2025, just 9% of Australian SMEs were actively hiring graduates, down from 19% two months earlier. 

But the trend isn’t confined to our shores: globally, entry-level hiring has fallen an estimated 29% since January 2024.

In short, many businesses are no longer hiring recent graduates at all. 

On one hand, it’s understandable employers have become frustrated by graduate work-readiness (more than half now say graduates don’t meet expectations on self-awareness). They’re also concerned about their resilience and written communication, you’d be excused for thinking that there was little point bucking the trend.

And yet, despite all of this, there’s still a strong case for hiring graduates. Here’s why. 

What the best employers are doing when it comes to hiring grads in 2026

Despite the widespread cuts, 91% of large employers globally are still recruiting graduates, even if many of them are trimming at the margins. In Australia, the companies most serious about long-term performance have never wavered from their policies about hiring lots of graduates. 

As smaller businesses cut back, year after year, through boom and contraction alike, the world’s largest organisations run structured graduate programs. In doing so, they invest in onboarding, mentoring and rotation and, above all, they compete hard with one another for the best candidates.

These aren’t naive operators ignoring the numbers and sticking to what they’ve always done. They’re the most analytically sophisticated employers in the country who’ve taken the view that the pipeline matters too much to interrupt.

There’s a reason for this too: experienced hires don’t appear from nowhere. The senior consultant you need in four years is the graduate you hire today. The organisations that understand this think about their talent pipeline the way good businesses think about any long-term investment, i.e. not quarter to quarter, but across a cycle.

So what the current pullback mostly reflects isn’t a rational reassessment of graduate value. It’s short-term budget pressure producing long-term consequences that won’t become visible for years. 

And, by the time they do, it will be too late to do much about them. That’s because the cost of cutting graduate recruitment gets deferred.

The pipeline doesn’t send you a warning email

When employers froze graduate intake during the GFC, the consequences weren’t immediate. Initially. budgets looked better and headcount was leaner, but when the recovery came the mid-level talent that should have been there ready to move the business forward simply wasn’t. 

A Hudson survey of more than 600 Australian and New Zealand employers taken in the aftermath of the GFC found that 84% regretted making too many redundancies during the crisis. Because, while the cuts had looked rational at the time, the consequences arrived later, quietly, in the form of capability gaps and recovery plans that took longer and cost more than anticipated.

Meanwhile, US employers who cut graduate hiring by 22% in 2009 later told the National Association of Colleges and Employers they wouldn’t do it again, because reducing graduate recruitment during the downturn had created a measurable disadvantage when the economy eventually recovered. 

The same principles applied to training junior staff. When the GFC hit, training budgets were among the first things cut and economists have since argued that this systematic underinvestment in developing employees was partially responsible for the talent shortages that followed. 

Put simply, of you don’t hire graduates in year one, by year three or four, you won’t have the junior-to-mid talent you need to service growth, deliver on projects or backfill senior roles vacated by people moving up or moving on. 

You then have to go to market for experienced hires, and you pay a significant premium for people who are, in many cases, doing the job your unhired graduates would have been doing by now.

This isn’t a new pattern. Research into the wave of training and development programme cuts in the 1980s found the same dynamic playing out over a longer timeframe: no immediate impact, then a skills drought a decade later, as the generation that wasn’t developed failed to materialise in mid-level roles. 

The wrong conclusion from the right data

Of course, none of this helps overcome the very genuine work-readiness concerns many employers have today. These are genuine observations from experienced hiring managers across a wide range of industries.

But there’s a logical leap happening between the evidence and the response, and it’s worth naming.

Graduates needing development is not a new phenomenon. It is, and has always been, the entire premise of a graduate programme. The question has never been whether graduates arrive ready because they don’t, and nobody seriously expected them to. The question is whether the investment in bringing them up to speed pays off. 

And on that question, the evidence consistently says it does.

What’s changed is not that graduates are less valuable. It’s that the post-pandemic cohort of students – who completed significant portions of their education in lockdown – tended to receive less work experience, less face-to-face feedback and less exposure to professional environments. This means they often need more deliberate onboarding than their predecessors.

The appropriate response isn’t to stop hiring, but to provide more structured support. After all, the work-readiness gap doesn’t close itself, it closes when employers invest in closing it. And organisations that understand this are turning a market-wide concern into a hiring advantage. 

Which brings us to what they’re actually doing differently… 

The organisations that keep hiring are pulling ahead

When graduate hiring contracts across a market – just as it’s doing now – the employers who maintain structured programmes actually improve their position against competitors. 

They’re recruiting from a larger pool of candidates competing for fewer spots and paying less of a premium to do so. They’re also shaping those hires around their own culture and way of working at precisely the moment when their competitors have stepped back.

The Big Four professional services firms understand this arithmetic instinctively. So do Commonwealth Bank, Macquarie, Canva and the major government departments. They run structured graduate programs not out of a sense of social obligation but because they’ve done the maths on what it costs to buy experienced talent on the open market versus growing it internally and the internal number wins, consistently and by a significant margin.

The cost of hiring an experienced employee in Australia has more than doubled since 2020, now averaging nearly $24,000 per hire. And that’s before salary premiums for mid-level experience are factored in. Growing that talent internally, from graduate level, is demonstrably cheaper. 

But the same logic extends well beyond large organisations. 

Any business that competes for mid-level talent (which is most businesses) is affected by the same pipeline dynamics. The experienced hire you need in three years doesn’t materialise from nowhere. They come, in most cases, from a graduate program somewhere. If that program is yours, you’ve shaped them. If it isn’t, you’re bidding against everyone else for a finite pool of people who were shaped by someone else’s priorities.

There’s also a timing argument that doesn’t get made often enough. A contracting graduate market is one of the few moments when the balance of power in early-career recruitment genuinely shifts toward the employer. Application volumes are up – the ISE data shows employers receiving record numbers of applications despite fewer roles. The candidates are there while the competition for them, from other employers, is reduced. 

Running a serious graduate program right now, when others aren’t, is about as close to a buyer’s market as this space ever gets.

What a good structured graduate program looks like (if you’re not in the Big Four)

A structured graduate programme doesn’t require a dedicated team, a branded cohort experience or a rotation schedule. For most Australian businesses, it needs just four things.

 

The difference between graduate hiring that works and graduate hiring that doesn’t is rarely about the quality of the graduates. It’s almost always about the presence or absence of those four things.

The organisations pulling ahead right now are those running intentional programs in a market where application volumes are at record highs and competition for graduate talent among employers has softened. 

After all, the window to do this well (and cheaply) is  open right now. But it won’t stay open for long.

Want more?

Thinking about building a graduate hiring strategy that works for your business? Talk to our team of HR experts.

There is little doubt wage rises are coming in 2022. With inflation surging and the cost of living taking centre stage this federal election, there’s now little doubt your employees will be seeking a pay rise in 2022. However, a lot of business owners feel ill-equipped to deal with higher incomes, with some telling me they’re already losing staff to competitors willing to offer more.

That’s why I thought it was time to look at non-financial benefits, or what you can do when you can’t afford a pay rise.

Reduced hours/increased time off

If you can’t afford to pay someone more, what about asking them to work less? The opportunity to take more holidays, leave work earlier or have a Flexi day each fortnight holds real appeal for many employees. That means it could be a good way to keep them on board without needing to offer more money.

If you’re worried about the impact this might have on your business’s productivity, you don’t necessarily have to be. A comprehensive Icelandic study found that there was no reduction in an organisation’s level of service when its employees went from working five days a week to four days a week. In fact, many indicators of service provision and productivity actually rose. At the same time, employees’ happiness and well-being improved dramatically.

If you’re going to go down this path though, it helps to make sure that your employees actually want to work less. For some workers, cutting hours may feel like a demotion or backwards step in their career rather than a benefit.

Other flexible working options

It’s not just time off that many employees want, it’s also the opportunity to work autonomously. During the COVID lockdowns, many of us got very used to working our own way. We often also had the opportunity to fit in more time with our families, on hobbies and just generally looking after ourselves. Now, as things return to normal, it can be a difficult thing to go back to the feeling that we always need to be in the office.

By continuing to offer some degree of flexible working even after COVID, your workplace could continue to appeal to employees even without a pay rise – especially if competitors aren’t doing the same.

Providing recognition

One of the main things employees want out of their work is the recognition for a job well done or at least the feeling that they’re not being taken for granted.  Too many employers forget this and expect their employees to keep working their best and remaining loyal, without ever letting them know how much they mean.

Don’t fall into this boat. Make sure you tell your staff how much you value them even if you can’t afford to pay more. Throw after work drinks or regular dinners to celebrate their achievements and acknowledge how they contribute.

Career mapping

While some employees are tempted to move by a short-term windfall, many look to the longer term. If you can offer a genuine and fulfilling career path, they’ll have much more incentive to stay with you. This could be a good time to sit down with the staff you want to keep to find out exactly what they want from their careers and how you can help facilitate it. By following through, you’ll be giving them more reason to stay than just pay.

Know where you stand

Finally, before you say no to a pay rise, you need to do your homework and find out exactly where you stand. If your employees are covered by Awards or Agreements and these provide for a pay increase, you may have no option but to pay more.

You should also review your bottom line, to work out how much is coming in and what’s going out. If you find that you need to increase pay, it may be time to increase your prices…

Want more?

If you’d like to know more about how to get non-financial benefits work for your business, get in touch.

Working from home has become commonplace. But is it really an encouraging workplace solution? How does it impact your overall human resources? We explore when it works, when it doesn’t and how to ensure it delivers positive benefits to your organisation. Should you really let that employee work from home? Is this key to performance management? More and more employers seem to be answering this question in the affirmative. After all, it is the age of flexible working, so allowing them to stay away from the office when they’re not needed is just what you have to do, right?

Besides, doesn’t letting your employees work from home produce a focused, happy and productive work culture? A HR win right?

The real benefits of working from home

The truth is, there can be real advantages in allowing employees to work from home – both for employers, employees and your human resources department. When Microsoft organised its own study into the topic and surveyed 4,000 IT workers in the manufacturing, financial services, professional services and retail/hospitality industries, it was found that there were immediate benefits. The Microsoft study also revealed that 45% of workers overall and 71% of information workers in retail/hospitality thought their productivity was higher when working remotely. Due to fewer distractions and a generally quieter atmosphere, this in part allowed them to get their daily tasks done.

Microsoft’s findings have been supported by other studies undertaken around the world. For instance in 2014, a Chinese-based NASDAQ listed company, randomly choose half of its 16,000 call centres workers to work from home while the other half stayed in the office. A nine month academic study into the impact of this experiment found that those who worked from home were 13% more productive – largely because they took more calls per minute and fewer breaks and sick days. How about that for HR strategies?

HR strategy or mistake? Common hesitations about allowing employees to work from home

That said, many employers are understandably still concerned about letting employees work from home – much of this concern centres on the loss of control. Potentially rising HR issues and lack of employee engagement. Who knows how hard your employees will work when there’s no one watching over them? What’s to stop them from going off-task or just completing the bare minimum? Isn’t it better to have them in the workplace and under a watchful eye?

Another common hesitation employers have is around whether workers can actually perform their role according to HR policies and procedures, especially when they’re not in the workplace. And there are obvious times this is true – a customer-facing hospitality employee can’t always meet and greet people from their living room; nor can a courier deliver parcels from a home office. 

But there are also many situations that are a little more complex – such as the creative team who must accumulate ideas together, the consultants who need to collaborate to solve a clients’ problem, or the manager who really needs to be accessible to team members, consulting them on their roles and overseeing their work. 

Finally, some employers are concerned about potential security breaches – especially in industries that rely on a high degree of confidential information and data such as professional and financial services. What happens if the employee compromises our systems or introduces a virus to our network from their own device? This could put your human resources department into meltdown. 

Getting around these hesitations: is it worth it?

My industry work with clients has shown that sometimes employers’ fears are well-founded. Some employees won’t do the right thing and shouldn’t be granted such deep trust; sometimes work is best completed in the office where employees can consult face-to-face and bounce ideas off each other, as a supportive team.

However, placing a blanket ban on working remotely can have a negative impact on morale and ultimately affect your business. Instead, for employee management and development I prefer to look at each scenario on a case-by-case basis. Starting with a written policy that states exactly what the rules are around working from home – who’s allowed to do it, when and for what reason.

Beyond that, I also think there are a few key initiatives every employer should do to ensure working from home works for everyone – not just the employee.

How to get working from home right in your workplace

If you’re struggling coming to terms with challenges of working from home, here are key measures every business should consider.

1. Analyse what can be done from home.

In conjunction with your employees, decide which tasks can be performed at home and which are best for the office. Restrict remote time to the days when only those non-office tasks need to be done.

2. Set measurable goals.

HR management is all about setting goals. If someone is working from home, make a list of achievable expectations. Write down what you expect them to achieve while they’re away from the office. If incomplete, their remotely working status should be reviewed.

3. Communicate.

Successful managers constantly let people know where they stand – what they’re doing well and where they need to improve. Unfortunately, when someone works from home it can be “out of sight, out of mind” on this front.

4. Bring people back into the office.

There are benefits of working face-to-face too – both from a social and productive standpoint. By making sure your team come into the office from time-to-time, a noticeable beneficial outcome will show for the business. For instance, set a compulsory weekly or fortnightly team meeting that can’t be missed without a valid excuse.

5. Keep connected.

These days apps such as Slack and Google Hangouts let you stay in constant communication with your team members. Take advantage of these (resist temptation of checking on employees) it may just help with employee engagement.

6. Put the right tech in place.

If you’re worried about your systems being compromised, speak to your IT members. Discuss ways to avoid this and have a written protocol on what’s allowed and what’s not.

And finally…

Real benefits can come from working at home. However, the reality is leadership and management needs to be planted and in some cases, the answer will have to be no. Be prepared for these instances and have a solid, logical reason for why you would deny some employees access to it – and communicate this clearly. By being consistent and transparent, you’ll get the respect from your employees, while helping create a happier, healthier and more productive workplace. If you have any questions regarding flexible working conditions and working from home, speak with the Catalina Consultants team today.