Gen Z Is Showing Up. The Job Market? Not So Much
New iCIMS Workforce Report reveals a growing disconnect between eager new grads and a cautious hiring landscape shaped by AI, skills gaps, and stalled growth.
The Class of 2025 is hitting the job market with record optimism—and application volume to match. But according to iCIMS’ June Workforce Report, opportunity isn’t meeting enthusiasm halfway.
Based on data from thousands of employers processing over 200 million applications and 5.5 million hires annually, the report paints a mixed picture: Entry-level applications are up 22% year over year, yet hires are actually down 8% across the board. And for recent grads, the situation is even tighter: The unemployment rate among 20-24-year-olds stands at 6.6%, well above the national average of 4%.
“There’s no single narrative for entry-level hiring in 2025,” said Trent Cotton, head of talent acquisition insights at iCIMS. “We’re seeing a shift from broad-based hiring to strategic, business-aligned decisions.”
In other words, the job market may be full of motion—but not much momentum.
Supply Surges, Demand Stalls
Despite a 6% year-over-year increase in entry-level hires, it’s not enough to absorb the influx of new candidates. On average, each entry-level job drew 36 applicants in May, up from 29 a year ago. That’s slightly more competitive than the overall job market, where the average is 34 applicants per opening.
Top Gen Z concerns?
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Lack of experience or skills (21%)
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Economic uncertainty (19%)
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Heightened job competition (19%)
It’s a tough setup for a generation stepping into its first full-time roles amid rising inflation, AI disruption, and still-evolving remote work norms.
Manufacturing: The Unexpected Magnet
In a surprising twist, manufacturing is becoming a Gen Z hotspot. Applications for entry-level roles in the sector jumped 37% year over year, suggesting younger workers are giving serious thought to “toolbelt careers” offering stability and high earning potential.
Compare that to healthcare, where entry-level interest grew just 12%, despite a chronic labor shortage—highlighting a possible misalignment in how the sector markets itself to digital-native talent.
Skills-Based Hiring Still Has a Credibility Gap
There’s a clear disconnect between what Gen Z is ready to offer—and what recruiters are looking for.
While 95% of recruiters say they use skills-based practices, their actual priorities tell a different story:
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37% still rank experience as most important
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34% prioritize education
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Just 28% rank skills as the top factor
Meanwhile, 44% of Gen Z job seekers say they’d happily complete job simulations to prove their abilities. The catch? Only 30% believe employers actually value those skills in the hiring process.
AI Fluency: The Coming Generation Gap
While Gen Z is often labeled “AI native,” the data shows they’re still learning the language.
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56% of Gen Z expect AI to factor into their careers
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44% are unsure or don’t expect to use it at all
Recruiters, however, are betting big:
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96% expect entry-level hires to manage AI agents within two years
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CIOs are on board too, with 72% planning to implement agentic AI systems in the next 1–3 years, according to the iCIMS 2025 State of the CHRO Report
With AI reshaping every corner of recruiting and operations, employers may risk overlooking Gen Z candidates whose AI instincts outpace legacy processes.
“Recruiters may default to shortcuts and miss out on candidates with sharper AI instincts than many tenured hires,” said Cotton. “Forward-thinking companies will tap into this talent now—not later.”
iCIMS Doubles Down on AI-Driven Hiring
Backing up its own data with product momentum, iCIMS recently announced iCIMS Agents, an AI-native ecosystem designed to automate and accelerate the recruiting lifecycle. The first agents are expected to roll out in Q3, placing iCIMS squarely in the race to reshape how hiring gets done in an era of agentic AI.
The company will showcase these developments at RecFest UK on July 10, alongside customer AXA, a global leader in insurance.
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