New AI Hiring Research Says Remote Work, Not Robots, Is the Problem

Everyone blames AI for the brutal entry-level job market. The Federal Reserve Bank of New York just checked the data, and it says the blame is misplaced. In a new piece of AI hiring research, economists Richard Audoly, Miles Guerin, and Giorgio Topa tracked hiring data through 2024 and job postings through the start of this year, and found that the slowdown in hiring is not concentrated in the jobs most exposed to AI.

According to Outsource Accelerator's summary of the study, the researchers specifically tested whether AI was wiping out junior roles, the fear behind every "AI took our jobs" headline. They found no support for it. The study observed "no clear divergence in labor demand between junior and senior positions" in AI-exposed occupations, and the declines in those postings tracked the broader softening across every occupation type. The evidence, in the researchers' words, "provides little indication of a distinct AI-driven decline in labor demand." The hiring freeze looks more like a standard economic slowdown than a robot takeover.

Surveys of employers tell the same story. In a NY Fed survey of businesses using AI, about 10 percent said they were hiring more workers, mostly those with AI expertise, while a third said they were keeping their current headcount. Less than 5 percent had cut workers. The report ran under the headline "Businesses Are Using AI to Transform Work, Not Cut Jobs," according to The City Reporter's coverage. Separately, an analysis by financial firm Ramp and workforce data company Revelio Labs found that at the companies investing most heavily in AI, entry-level headcount actually grew 12 percent in the two years after they adopted it.

Remote work is the bigger barrier

If AI is not the main culprit, what is? A second NY Fed analysis points at the way work itself changed. In a Liberty Street Economics post published this past June, economists Natalia Emanuel of the New York Fed, Emma Harrington of the University of Virginia, and Amanda Pallais of Harvard compared young graduates in remote-friendly occupations with those in jobs that have to be done in person.

The gap was stark. Unemployment among college graduates under 29 rose from 3.1 percent before the pandemic to 3.7 percent in the years after, while unemployment for experienced graduates edged down from 1.9 percent to 1.8 percent. "Remote work can explain 64 percent of the recent increase in unemployment among young college graduates," Emanuel said, according to Outsource Accelerator's write-up of the research. In remote-heavy fields like software engineering, unemployment among young grads climbed by almost a full percentage point, while older workers in the same fields saw their rate dip slightly.

The researchers' theory comes down to mentorship. Remote work grew fourfold after the pandemic, and the NY Fed team argues it got harder for managers to train and guide junior employees at a distance. Workers who sat closer to colleagues received more feedback and informal coaching, and younger workers lost the most from its absence. Hiring managers, in turn, may be reluctant to bring on people who need training when training itself is hard to deliver remotely.

Harvard economist David Deming adds a timing argument. "If you look very carefully at the timing, it looks like the decline in junior hiring actually started a bit like six months before ChatGPT was released," he said, in an interview covered by NPR. "And so the value proposition of hiring a junior person when you know they're going to be at home is just not as great."

What actually gets grads hired

While researchers debate the causes, job seekers have already adjusted their tactics. The New York Weekly Times reports that 66 percent of recruiters planned to increase their use of AI for pre-screening interviews at the start of this year, according to LinkedIn research, while 81 percent of job seekers had used or planned to use AI in their own job search. Both sides of the hiring process now run through automated systems before a human ever reads a resume.

The graduates who stand out are showing their work. Handshake, the early-career platform for students, found that the class of 2026 listed AI skills on their resumes at twice the rate of the class of 2022, and that 74 percent of those mentions were tied to real-world projects rather than coursework. "Early talent is already starting to answer this shift by sharing real projects directly on their Handshake profiles, turning AI from a claimed skill into demonstrated capability," the company wrote in a blog post, according to the New York Weekly Times. Handshake's takeaway: early talent is being amplified by AI, not displaced by it, and in an AI-driven workforce, resumes alone are not enough.

Employers are asking for exactly that. The National Association of Colleges and Employers found that 16.5 percent of spring job descriptions asked for AI skills, up from 10.5 percent the previous fall. Overall, 28 percent of employers say they are looking for early-career talent who can use AI at work. Many students have not caught on: close to a third of graduating seniors said AI skills would be of little or no importance to their future careers, and more than half said they were neither building AI skills nor using AI in their job searches. NACE calls it a "striking disconnect." Its president and CEO, Shawn VanDerziel, said in the research release: "Employers are increasingly asking graduates to be ready for AI, while a significant portion of students are asking whether AI deserves a place in their work at all."

Getting noticed remains the hardest part. Student reporter Michela DiLorenzo, covering campus careers sentiment at Seton Hall for the New York Weekly Times, found one student who landed two interviews after 50 applications and another who called the experience of applying to as many as 150 jobs impersonal and discouraging.

Evan Sohn, founder and CEO of labor market research firm Revelio Labs, told CNBC that the companies adopting AI fastest are also hiring fastest, but they are prioritizing senior roles. "AI is really making it difficult for the entry-level people to get in there," he said. "The 22- to 25-year-olds are really getting lost in the shuffle." His advice to everyone else was short: "Be ahead of everybody else when it comes to AI."

This AI hiring research flips the usual panic on its head. AI is not the main reason hiring slowed. Remote work explains most of the pain for young graduates. And the new grads landing jobs are the ones with real AI projects to show. That matches the bigger picture in the entry-level market: young workers rewrote their career plans as entry-level hiring fell, nearly half considered jumping into skilled trades, and more than half planned to quit their current jobs. For the generation told to fear the robots, the actual fix looks simpler: learn the tools, document real projects, and target employers that train junior staff properly.