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.

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