WFH is a bigger threat to entry-level jobs than AI, study suggests

Artificial Intelligence (AI) was anticipated to be one of the biggest threats to entry-level hiring. Several tech executives have warned that many of these jobs could eventually be automated as companies increasingly adopt AI-driven tools to improve efficiency. However, according to a recent study, the real issue may not be AI, but the challenges created by the work-from-home setup in mentoring, supervising, and developing junior employees.

AI may not be the reason for entry-level hiring

Peter John Lambert, a postdoctoral researcher at the London School of Economics, and Yannick Schindler, a senior research economist at the Ellison Institute of Technology, studied millions of hiring records and job postings from the US, UK, Canada, and Australia between 2017 and 2025 to understand job market trends.

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The author said, “Our findings point strongly towards WFH exposure as a better predictor of the decline in relative early-career hiring.” The authors also argue that earlier studies done on AI job displacement may be misinterpreting the data because two trends are happening at the same time.

When they looked at AI exposure and remote-work exposure separately, both seemed linked to fewer entry-level hires. But when they analysed both factors together, the work-from-home had a more visible impact than AI. The authors highlighted organisational problems as the major cause. 

The author wrote, “WFH has been shown to raise the cost of supervising and monitoring workers, and can slow on-the-job learning. These organisational frictions can erode the value-proposition of investing in early-career talent.”

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Jobs that can be done remotely saw a bigger drop in junior hiring than jobs that require in-person work. By 2025, remote-friendly jobs had a 4–5 percentage decline in hiring for freshers compared to hybrid roles.

It was further highlighted that entry-level hiring significantly dropped after 2022, and US hiring was down by 29% compared to pre-pandemic levels. While AI may have an impact on hiring, the study suggests it may be too soon to say it is already replacing many entry-level workers. The study also highlighted the need for companies to rethink how they train freshers in a remote or hybrid setup.