When searching for her first post- graduation job, University of Iowa fourth-year student Isabelle Hudnut was repeatedly told she did not have enough work experience for the entry-level positions she applied for.

Over the span of her college career, Hudnut had a three-year-long internship position and two summer internships. One of the summer roles even turned into a part-time position for the duration of her final school year. 

“Some of the feedback I would hear most frequently was just that it was not enough,” she said. “Even internships were not making the cut as real experience anymore.”

With a major in communications, a minor in media management, and a certificate in entrepreneurial management, Hudnut did not know what else she was supposed to do to set herself up for success post-graduation. 

Hudnut isn’t alone, as college graduates are facing the toughest job market in years. According to the Federal Reserve Bank of New York, the unemployment rate for graduates ages 22 to 27 jumped to 5.6 percent at the end of 2025 — marking a sharp hike over the past three years. 

UI economics professor Anne Villamil said the expectation mismatch is complicating the hiring process for new college graduates. She said employers are seeking people with years of experience for entry-level roles when by definition, new entrants do not have that background yet. 

“This is key,” Villamil said. “Entry-level jobs are compressed [because] companies want experience.”

Hudnut eventually signed an offer letter in April to be a full-time creative and social media manager at a small company in Iowa City, but not before submitting over 60 job applications in what she called a
“disheartening process.”

Hudnut started her job search in January, as she had heard the job market was arduous. But, she said most companies wanted to fill roles immediately, which complicated her search, as she does not graduate until May.

Even with her extensive internship experience, Hudnut said it was difficult to convey to employers that she had professional expertise, in part because she struggled to get in contact with actual recruiters throughout the process. She felt like many of her resumes were given a quick glance before being passed on. 

Emily Campion, UI associate professor in management and entrepreneurship, said resume scanners have been increasingly used by employers to read applications more efficiently. The computerized method makes some applicants, such as Hudnut, feel as though their resumes are not being given a chance. 

Campion understands the frustration but pointed out that when being read manually, recruiters only spend an average of six to eight seconds per application, according to the Tufts University Career Center. She said scanners look for specific information on resumes the same way recruiters do, only scanners can go much faster. 

Still, Hudnut said it was discouraging to be approaching graduation feeling like her solid experience was not enough to get through an automated interview process. 

These challenges represent a sliver of the quickly-evolving and increasingly complicated job market. The labor market appears stable on paper, but as hiring practices shift, the economy remains unstable, and AI booms, getting a job as a new college
graduate seems convoluted. 

Complicating factors in the labor market

As of March, Iowa’s unemployment rate sat at 3.3 percent, according to the U.S. Bureau of Labor Statistics. The number falls significantly below the national unemployment rate of 4.3 percent from March. 

The labor force participation rate, or the percentage of the work-eligible population that is employed or actively seeking employment, is at 67.9 percent in Iowa as of April. Iowa’s rate is in the top 10 nationwide, which implies a strong labor demand and robust state economy. 

But many graduates, including Hudnut, feel like the market is unsteady — not strong. 

Villamil said this view is not unfounded because there are important distinctions between hiring and unemployment rates. She said while unemployment in Iowa remains low, hiring is stagnant. 

“This is a real fact,” Villamil said. “It’s not just students’ perceptions that there are less job openings out there. There are less job openings out there.”

According to the Job Openings and Labor Turnover Survey, a monthly report from the U.S. Bureau of Labor Statistics, total national job openings are near pandemic-level lows. Openings peaked following COVID-19 in May 2022 at 12,301,000. As of February, the number had decreased to 6,882,000. 

Villamil attributed the decline to various factors, all of which had one thing in common — uncertainty. 

She said uncertainty in interest rates, geopolitical shock from the Iran war, the economy, and the AI industry are all contributing to sluggish hiring. 

The most recent report from The Beige Book, a publication on economic conditions from the Federal Reserve System, released in April, cited the conflict in the Middle East as a “major source of uncertainty that complicated decision-making around hiring.”

Villamil said spiking oil prices, supply chain problems, and inflation from the Iran war are all impacting hiring practices. She said the impacts are exacerbated because the end of the war in the Middle East
is indeterminate. 

She said employers are turning to temporary contracts as a result because they are cheaper, and eliminating positions when necessary is easier. The Beige Book report said several regional banking districts nationwide noted increased demand for temporary workers, as “firms remained cautious about committing to permanent hires.”

National job growth increased by 178,000 in March, according to the U.S. Bureau of Labor Statistics. While the increase is modest, Villamil said it has been concentrated in high demand areas such as healthcare, construction, and transportation. She said other sectors, such as federal positions, have continued to lose jobs. 

Joe Murphy, president of the Iowa Business Council, said while hiring is slower, the job market in Iowa is “healthy.” He said many companies overhired during the COVID-19 pandemic, so the labor market is still normalizing six years later. 

“It is taking more time, I think we would all agree, to land a job than before,” Murphy said. “Because companies are, I do not want to say pulling back on hiring, but they’re just not hiring at the same accelerated clip as they probably did four and five years ago.”

The business council is a nonprofit, nonpartisan organization of 22 CEOs from Iowa’s largest employers, focusing on workforce and economic development. 

According to the council’s first quarter Economic Outlook Survey released in April, 30 percent of members expect their company’s employment to increase in the next six months, while only 10 percent anticipate a decrease. 

Looking to the future, Murphy said stagnating population growth and “brain drain” present a bleak outlook for workforce development in Iowa. 

Iowa’s population growth has been sluggish in recent years, as a report from the Common Sense Institute, a nonpartisan research organization, found growth fell below the 35-year average and the five-year average in 2026, with an increase of 7,900. 

The increase lags behind the population growth of 15,803 in 2024, meaning the state could face decreasing economic output in the coming years. 

“Brain drain,” or the outward migration of young people from the state, is making a detrimental impact on the workforce, Murphy said. He said the sheer number of college educated individuals leaving the state post-graduation will have long-term financial implications. 

Iowa has the seventh highest cumulative net outmigration in the country, according to a 2025 study by the Common Sense Institute. It estimated that local and state governments forgo nearly $400,000 in tax revenue per outgoing graduate as well as a $6.1 billion loss in GDP by 2060 due to these departures. 

Talent attraction and retention is the number one problem over half of the business council’s members are contending with, Murphy said, according to a quarterly survey done by the organization.  

To combat this, Murphy said employers should prioritize facilitating internships. He said the business council’s 22 members have a goal of hitting 20,000 combined internship opportunities over the next five years as a way to show that there are quality work and career opportunities in the state. 

Career outcomes after the UI

Cindy Meis, director of the UI Tippie Career Services team at the Tippie College of Business, said job placement for UI graduates has stayed relatively stable in recent years, despite a tumultuous and uncertain national labor market. 

According to hiring reports from the UI Pomerantz Career Center, 96 percent of graduates are “employed, continuing education, or not seeking at six months post-graduation.” Of those who are employed, 60 percent received job offers prior to graduation, and 27 percent received offers within the next three months.

These datapoints are part of aggregated statistics from the 2022-23, 2023-24, and 2024-25 academic years. 

A six month delay in reporting up-to-date statistics complicates the ability of Tippie Career Services to evaluate whether graduates’ outcomes have been impacted by the labor market, said Dana Powers, assistant director of careers and engagement at Tippie. 

Meis said even though hiring numbers have not changed dramatically, the process has shifted in recent years. She said for example, employers want repeated interactions with job candidates, stretching the duration of recruitment. 

“[Employers] really want to know the person behind the resume, so they want you to stop at their table,” Meis said. “They will want to visit with you at the career fair. They want you to tune into a webinar, and then be part of that interview process, maybe network with someone within the company.”

She said meeting these needs can be challenging, especially for students who do not know what career path they want to take and are not ready to commit to a single organization. 

Meis said students feel an additional pressure to obtain internship experience before graduation, as it is proven to lead to better career outcomes.

A study released May 2025 by the National Association of Colleges and Employers found that career satisfaction, career progression, and salaries are all higher among Gen Z professionals who took part in an internship or experiential learning opportunity in college. 

But, Meis said some industries facilitate more internships than others, and having the experience will not make or break a students’ post-graduation success. 

Powers said resume building and networking are good ways to make an impression even without the famed internship. Study abroad experience, nonprofit work, or academic projects such as research are all paths students can take to make their applications stand out,
Meis said.

Powers said students should be intentional about getting involved in student organizations, holding executive positions, or working on projects to bolster their resumes. She said these experiences help build versatile skills that look promising to prospective employers. 

“It’s really important to think through transferable skills that students may have directly related to positions, and understand how [students] can leverage themselves in the best way in that hiring process,” Dana said. 

Murphy said the business council emphasizes the importance of applicants who showcase cross-occupational skills, like critical thinking, adaptability, and organization. 

“Those sorts of skill sets can be applied whether you’re a financial analyst, a manufacturer on the line, a chemist or biologist,” Murphy said. “All of those things are so critically important across every industry, in every occupation in Iowa.” 

Campion encourages students to communicate AI literacy to prospective employers as another way to set themselves apart from other candidates. She said AI is being used to increase workplace efficiency, so proficiency in the tool is a promising trait. 

AI as a ‘double-edged’ sword

Villamil said AI is potentially impacting entry-level work roles, as the positions are the easiest to replace for some industries, but she said the impact thus far is indeterminate.

The AI industry is a “double-edged sword” for people on the job search, Villamil said, because the resulting job growth will be temporary. She attributed the growth to the boom of data center infrastructure, used to house AI technology. 

Villamil said while it is too soon to determine how much AI will impact jobs, she does not think it will eliminate large swaths of positions without replacement. 

“We know from technological innovations, the Industrial Revolution, that when some jobs are destroyed, other jobs are created,” she said. 

This indeterminate effect on jobs is causing employers to preemptively shift hiring practices, which is making an impact on the labor market, according to Villamil and other experts. 

Campion said employers are more hesitant to hire due to the uncertain influence of AI, though disruption to the labor market cannot solely be attributed to the emerging technology. 

Jobs have adapted to many technological advancements over time, Campion said. She thinks AI has the potential to make a bigger impact than other advances, but she does not foresee it being a “job killer.”

“I do believe it will alter jobs. I do think some jobs will probably go away, as we’ve seen, but I do not believe the majority of jobs are going to be killed by AI,” Campion said. 

Meis said she reminds students that there will always be an essential human component to most roles, AI just might make extraneous work easier. 

“We are reacting to AI,” Meis said. “We do not know what we are reacting to yet, so it makes people a bit more conservative in their hiring.” 

Ryan Wilson, UI professor and Tippie chair in accounting, said AI’s influence is unclear, but he thinks many companies, such as tech firms, overhired during the pandemic and are using AI as a cover to scale back hiring as a result. 

Wilson, who is also the executive officer of the accounting department at the university, said the influence of AI has contributed to a flourishing job market for accountants. 

Accounting positions were initially thought to be risked by the new technology, but Wilson said that is not the case anymore. He said the job’s most mundane tasks will be made more efficient with AI, making the field more appealing. 

Licensure requirement changes, increased pay, and a shortage of accountants in the workforce are also contributing to the attractiveness of the profession for new graduates, Wilson said. 

He said a human still needs to be involved in the accounting process, so AI is increasing the value of an accounting degree because employees will be able to get work done more efficiently with the tool. 

Accounting firms had previously been outsourcing large amounts of low-level managerial work to India, and while AI can do much of that work, the rest will be brought back to the U.S, according to Wilson, who said this will raise the expectations for what entry-level accountants are expected to do. 

Villamil said new graduates should seek opportunities in high demand sectors, such as accounting, as a way to mitigate the impact of the fluctuating job market. 

Murphy reassured that entry-level positions still exist in this labor market, but candidates should remember their first post-graduation role is unlikely to be the “perfect job.”

“The objective is to gain employment and then to gain experience,” he said. “That’s really an important aspect. You can wait along forever for something perfect to come up, and it just never will.”

Villamil said graduates should prepare to pivot and use their degree in a different way than intended while the market stabilizes. She also encouraged students to take advantage of their personal networks for
increased opportunity. 

“This too shall pass,” Villamil said. “The macroeconomy fluctuates, and it will get better over time. I am fully confident of that.”