College was once a one-way ticket to a secure, full-time job with health care and a 401(k). But in the AI age, it’s becoming less of a reality and more of a faraway dream.
That’s most apparent to recent graduates. Today, instead of betting on a full-time job, more Gen Z graduates are looking to alternative paths to employment out of necessity. ZipRecruiter’s 2026 Graduate Report found that more are turning to unconventional jobs right out of college.
According to the study—a survey of 1,500 class of 2025 graduates and 1,500 soon-to-be class of 2026 graduates—nearly 38% are considering starting their own business, 32.5% are looking at gig work, 28% are exploring freelance work, and 11% are pursuing the skilled trades.
“Grads are piecing together experience through internships, side work, stepping-stone roles, and even starting their own ventures,” Nicole Bachaud, labor economist at ZipRecruiter, said in a statement. “With fewer entry-level roles available, their path looks different, but many are finding their way.”
While a recent survey from the National Association of Colleges and Employers found employers plan on increasing hiring of new graduates by 5.6%, Gen Zero are finding themselves in an increasingly precarious position in the labor market. Business leaders have sounded the alarms on AI’s ability to disrupt the workforce. And those warnings are starting to come to fruition.
Jack Dorsey’s Block led the way earlier this year, cutting 40% of headcount due to AI efficiency and telling other firms to follow suit. And this week, Meta announced it was cutting 10% of its workforce amid heavy AI spending. Microsoft is also offering buyouts to employees as a way to control costs amid an AI spending spree. Oracle cut workers for the same reason last month.
But layoffs are only half the story. The ZipRecruiter report found that entry-level job openings are drying up, making it harder for recent graduates to start the climb up the corporate ladder. Entry-level job postings made up just 38.6% of all postings in March, down from 44% in 2023. That’s meant more applications per open role. The number of clicks per job opening increased by nearly 22% year over year, suggesting tougher odds for job seekers.
All of this has culminated in an unemployment rate for recent grads that swelled to 5.6% in December, up 1.7 percentage points since October 2022, according to data from the Federal Reserve Bank of New York. Meanwhile, the jobless rate for all workers was 4.2%, up just 0.8 points in that span.
There is some good news for the class of 2026
To be sure, Gen Z is still finding work, especially as they opt for roles outside of their desired field. Just one in four graduates is on their dream career path, according to the ZipRecruiter.
In fact, 77% of the class of 2025 found a role within three months of graduation, up from 63.3% a year ago.
Researchers also attribute the increase in speedy employment in part to determination rather than an easing of labor market conditions, as students today fire out more applications before landing an offer.
A burgeoning job application market has emerged to meet the moment, with services now handling the tedious work of writing cover letters and résumés as job seekers apply to more roles than ever.
Companies like Reverse Recruiting Agency apply to jobs on behalf of applicants. Others start working with college students as early as sophomore year to help them secure a foothold on the corporate ladder years before turning the tassel.
Whatever the first job out of college—barista, coder, or something in between—the path has changed. And it’s unclear if the traditional way up the corporate ladder will ever return.
“The old model was: graduate, find an entry-level job, climb from there,” ZipRecruiter’s Bachaud said. “What we’re seeing now is something less linear, yet their outcomes are actually improving.”
