The newest class of job seekers is entering the workforce with determination and digital savviness, but opportunity isn’t meeting them halfway. iCIMS, a leading talent acquisition software company trusted by the world’s best brands, has published a report examining the state of entry-level hiring as Gen Z navigates a competitive job market shaped by economic uncertainty, AI adoption, and inconsistent skills-based hiring practices.  

The new report is back by iCIMS data from thousands of companies that receive over 200 million applications and make 5.5 million hires annually, plus surveys of Gen Z job seekers and talent acquisition professionals. The report shows entry-level applications are up 22% year-over-year, closely tracking the overall application growth of 21%. While candidates remain optimistic, the job market tells a different story: Overall openings are flat, hires are down 8% since last May, and new grads face a 6.6% unemployment rate—the highest in a decade, excluding the pandemic, and well above the 4% national average.  

“There’s no single narrative for entry-level hiring in 2025,” says Trent Cotton, head of talent acquisition insights, iCIMS. “Some companies are pausing, some are building and others are investing in internal talent. This signals a shift from blanket hiring to business-aligned talent strategies.” 

Key findings from the report include the following.  

• While entry-level hires ticked up 6% year over year, the pace still lags well behind candidate supply, raising concern for Gen Z. New grads said their top concerns for the job market are lacking the right experience or skills (21%), economic uncertainty (19%) and heightened competition for jobs (19%).  

• Competition for entry-level roles is slightly higher than the overall job market. Entry-level job openings received an average of 36 applicants per opening (APO) in May, a 22% uptick from the year prior (29). The overall job market saw a similar jump as it received an average of 34 APO, an 18% increase from the year prior (28). 

• With volatility dominating the labor market, stability and a focus on skills could be drawing new grads to toolbelt jobs with high earning potential. Entry-level applications for manufacturing jobs are climbing, up 37% year over year. Healthcare isn’t seeing the same rush of entry-level interest with activity up 12% year over year, creating an area of opportunity for 2025 grads. 

• Most recruiters (95%) said they use skills-based practices, but rank experience (37%) and education (34%) above skills (28%) as the most important factors for assessing entry-level candidates. On the other hand, Gen Z is eager to prove their skills as over four out of 10 (44%) said they’d welcome job simulations to showcase what they can do, yet just 30% think employers truly value their skills. 

While over half (56%) of Gen Z expect AI to play a role in future jobs, a fair number (44%) either aren’t sure or don’t expect to use AI tools. A whopping 96% of recruiters said it’s likely entry-level workers will manage AI agents in the next two years.  

“With application volume surging, recruiters may default to shortcuts and miss out on candidates with sharper AI instincts than many tenured hires,” Cotton adds. “Forward-thinking companies will tap into the AI native Class of 2025 to boost productivity and modernize workforce skills.”