Employers’ hesitancy to hire entry-level workers has intensified amid the rise of remote work and concerns about artificial intelligence, according to recent economic research. A study from the London School of Economics (LSE) found that hiring for junior roles across multiple countries has declined by more than 14% since 2019, with firms that maintained remote work policies after the pandemic particularly likely to reduce entry-level recruitment.

The LSE researchers suggest that the slower skill development associated with remote work makes investing in young employees less appealing. Entry-level hiring is often seen as a long-term investment based on an employee’s potential, and companies rely on learning velocity to justify these decisions. Remote environments can hamper mentorship and informal interactions crucial to early-career growth, causing firms to prefer more experienced workers who require less onboarding time.

This shift may have broader economic consequences. The study warns that reduced opportunities for young workers could lead to a shrinking pipeline of skilled future employees, negatively affecting overall productivity and causing lasting impacts on specific age cohorts.

Despite the appeal of remote work, young employees often show mixed preferences. A Gallup poll from last year found fewer than 25% of Generation Z workers desire fully remote job arrangements, compared to over a third among older generations. Software developer Darby Vernon of Colorado, who transitioned from remote to in-person work, noted the social isolation she experienced while working remotely. Although she initially appreciated the convenience, Vernon described missing casual workplace interactions, which she believes are important for learning and building confidence.

Concerns about remote work’s effect on “soft skills” – interpersonal abilities critical to workplace success – have led some companies to invest in new training approaches. Influencer Grace McCarrick has begun offering social skills coaching aimed at young professionals, helping them navigate situations such as networking with senior managers. McCarrick highlighted that developing charisma and other social competencies is more difficult without in-person interaction, and pointed out that older workers may be less affected as they have already mastered these skills.

Some economists view the findings on remote work as somewhat encouraging, since the challenges posed by virtual communication tools like Slack and Zoom could be addressed through policy adjustments or workplace design. They contrast this with concerns that artificial intelligence may be suppressing junior hiring, a factor less amenable to quick solutions.

For workers like Matthew Manning, who graduated in 2023 and has held three remote jobs since, the lack of in-person engagement has posed its own challenges. Manning has not had opportunities to shadow colleagues or build strong workplace relationships, which he believes contributed to being laid off twice. While appreciating the flexibility remote work offers, he acknowledges that absence of physical interaction can make it easier for employers to sever ties.

As employers weigh the costs and benefits of remote work, the evolving dynamics around entry-level hiring underscore the complex trade-offs shaping the future workforce.