Marvin OnumonuResearch from Robert Walters found hiring skilled mid-level workers has become harder for UK employers, with 58% saying it is more difficult now than three years ago.
A quarter of business leaders said they have to pay higher wages to secure this talent.
The research found that a drop in graduate and entry-level recruitment over recent years is creating tougher competition and driving up costs for mid-level roles.
Chris Eldridge, CEO of Robert Walters UK&I, said: “Our findings emphasise the risks employers face when they hastily reduce entry-level and graduate intakes.
“It isn’t merely a case of short-term cost-saving; large-scale cuts lead to inflated future costs and jeopardise the health of talent pools.
“This trend isn’t new – looking back to 2022 offers us a clear example of the issues which can arise.”
Eldridge added: “The sharp rise in mid-level salaries we saw in 2022 was the result of a perfect storm.
“During the pandemic, major UK firms faced tight budgets, high inflation, and unused office space.
“As a result, many dramatically cut back on graduate and entry-level hiring, unknowingly creating a bottleneck of future talent.”
He said: “This was felt two years later, when business confidence rebounded and hiring ramped up.
“Employers suddenly found themselves competing for a limited pool of experienced professionals.”
Between 2022 and 2024, wages for these roles increased by 8% compared to the years before the pandemic.
Accountancy, technology, legal services and engineering jobs saw the biggest pay rises.
Average salaries for finance managers, in-house lawyers with 5-10 years’ experience and cyber security managers rose by over 10% as demand outstripped supply.
Eldridge said: “AI and automation tools are rewriting many traditional job roles.
“While innovation signals progress, it shouldn’t sacrifice a whole group of professionals.
“Graduate and entry-level positions are quickly being deemed ‘administrative placeholders’ instead of crucial to feeding future talent demands.”
Jessica Holt, managing director for Robert Walters outsourcing EMEA, said: “We are already seeing the damage this outlook is causing.
“With fewer people progressing up the career ladder, organisations are finding themselves competing for a smaller pool of experienced hires, often at a higher cost and with less flexibility to shape talent internally.”
Data also found that 42% of entry-level workers said they now feel they need to upskill because of AI’s impact on their job prospects.
Holt said: “Roles that once gave early-career professionals an entry point into the professional world are being streamlined or removed altogether, leaving many people at the start of their careers facing a difficult gap.
“They’re expected to bring more advanced skills to the table but are given fewer opportunities to learn those skills on the job.
“Businesses are also losing a key stage in how they build their teams.”
Holt added: “Without entry-level roles to cultivate subsequent skilled talent pools, the UK risks falling behind in developing sectors, like green energy and advanced technology, which are already facing critical skills shortages.”
Eldridge said: “The data speaks to the challenges that can arise in future hiring plans when entry level roles are cut too deeply.
“This isn’t just about future costs, but the future health of our labour market. Something which requires careful foresight and planning, not looking to emerging technologies for a single solution.
“For employers, adopting a holistic approach which prioritises long-term workforce development, targeted upskilling and the application of AI alongside human insights will help ensure they avoid past mistakes while nurturing a talent pool who can meet the demands of the future.”
