WFH is a bigger threat to entry-level jobs than AI, study suggests

Recent research has shifted the focus from artificial intelligence (AI) as the primary threat to entry-level job opportunities, highlighting the challenges posed by remote work arrangements. Many tech leaders have previously warned that AI could automate numerous entry-level positions as businesses strive for enhanced efficiency. However, a new study suggests that the true obstacle may lie in the work-from-home environment, particularly regarding mentoring and the development of junior staff. Conducted by Peter John Lambert, a postdoctoral researcher at the London School of Economics, alongside Yannick Schindler, a senior research economist at the Ellison Institute of Technology, the study examined millions of hiring records and job postings from the US, UK, Canada, and Australia spanning 2017 to 2025. Their findings indicate that exposure to work-from-home settings is a more significant predictor of the decrease in entry-level hiring than AI exposure. Lambert stated, “Our findings point strongly towards WFH exposure as a better predictor of the decline in relative early-career hiring.” The researchers argue that previous studies suggesting AI's role in job displacement may have misinterpreted the data, as both AI and remote work trends occur simultaneously. When analyzed separately, both factors correlated with fewer entry-level positions, but when considered together, the impact of remote work became more pronounced. The authors identified organizational challenges as a key factor in this trend. They explained that remote work can increase the costs associated with supervising and monitoring employees, ultimately hindering on-the-job learning. Such organizational frictions diminish the incentive for companies to invest in developing early-career talent. The study found that jobs conducive to remote work experienced a more significant drop in junior hiring compared to roles requiring in-person attendance. By 2025, remote-friendly positions saw a decline of 4-5% in hiring for fresh graduates compared to hybrid roles. Notably, after 2022, entry-level job opportunities dropped significantly, with US hiring plummeting by 29% from pre-pandemic levels. While AI's influence on hiring practices is undeniable, this study emphasizes that it may be premature to conclude that AI is currently replacing entry-level workers. The findings also underscore the urgent need for companies to reevaluate their training methods for newcomers in remote or hybrid work environments.