Students are falling short in work readiness and risk overselling themselves in job applications as employers raise concerns about AI use, reports Institute of Student Employers (ISE).

ISE’s annual Student Development survey found around half of employers are concerned that graduates (48%) and school and college leavers (52%) who use AI in the selection process misrepresent their abilities.

While candidates using AI to apply for jobs led to record job applications, most of those starting out on their careers in 2025 will have studied under lockdown conditions and had less access to work experience opportunities.

ISE’s survey found many employers are concerned that their student hires are less prepared for work than previous intakes. In particular, concerns over essential communication and interpersonal skills have significantly increased.

In 2025, 54% of employers reported that graduates did not meet expectations in self-awareness (up from 43% in 2024 and 35% in 2023), while 46% reported concerns about resilience (up from 37% in 2024 and 30% in 2023). Work-appropriate verbal communication was a concern for 22% (up from 17% in 2024 and 7% in 2023).

For school and college leavers, more employers reported unmet expectations in key areas. In 2025, 48% of employers highlighted concerns about resilience (up from 35% in 2024 and 25% in 2023), while 43% cited self-awareness (up from 31% in 2024 and 33% in 2023).

Additionally, concerns about work-appropriate verbal communication rose to 42% in 2025 (up from 29% in 2024 and 22% in 2023), and concerns about written communication rose to 46% (up from 28% in 2024 and 2023).

For other technical and analytical skills such as problem solving, the performance of graduates and school and college leavers broadly met the expectations of the majority of employers.

A lack of work experience is likely to adversely impact the performance of students when they embark on their careers. The survey found that most employers (77%) agreed that graduates who completed an internship or placement arrived with better skills and attitudes than those who hadn’t had this kind of opportunity.

Stephen Isherwood, joint CEO of ISE, commented:

“When employers take on new hires whose skills are not fully aligned with their performance during recruitment it creates a no-win situation for everyone. At best, the training process is disrupted, at worst, the candidate finds themselves in the wrong job.

“It’s important that students are genuine about their capabilities, but we need to do more to boost confidence in their abilities. Undoubtably work experience makes better hires. It is the single most valuable step a student can take to improve their employability. It will help develop the essential skills businesses want and employers like to hire former interns, so students may just find themselves with a job at the end of it.”

Sector Reaction

Greg Fuller, VP of Skillsoft Codecademy said:

“The ISE’s concerns around students falling short in work readiness and potentially overselling themselves through the use of AI highlight a critical moment for both the education system and employers. Rather than stepping away from AI, this is an opportunity to embrace a two-pronged approach to talent development.  

“Technology literacy must become a core element of both education and talent development strategies. This means supporting early exposure of foundational technology such as AI ethics, large language models, data privacy and cloud computing. But technical knowledge isn’t enough. To succeed in today’s workplace, individuals also need strong communication and interpersonal skills and power skills, such as critical thinking, curiosity, experimentation and resilience.   

“Equally important is rethinking how we introduce learning and development into onboarding. It should not be treated as a one-off event but as the starting point of a continuous and evolving learning process, as the skills in demand today may shift within a year from now. By embedding adaptability and a culture of learning into early career development, organisations can help bridge the readiness gap and build future-ready teams.”