Graduates are taking a closer look at smaller companies in a ‘competitive’ and ‘scary’ job market

The class of 2025 is taking a closer look at smaller companies.

According to California-based career platform Handshake, more than a third of job applications from upcoming graduates have gone to companies with fewer than 250 employees. That’s up from about a quarter of seniors two years ago.

With preparing for college during the pandemic, a wave of mass layoffs, and the rise of artificial intelligence, this year’s graduating class has faced more than its fair share of challenges.

Now, they’re trying to enter a job market showing significant cracks. While unemployment rates are relatively low, the number of job openings has been declining.

Handshake said job postings on its platform were down 15% over the past year, while the number of applications per job had increased by 30%.

The platform surveyed 2,871 students on bachelor’sdegree courses at 658 institutions and found 56% of students were either “somewhat” or “very” pessimistic about starting their careers in this economy.

When asked how they felt overall about the job market, the one-word response used the most frequently was “competitive,” followed by “difficult,” “stressful,” and “scary,” Handshake said.

That may be a fair assessment of the situation. As of March, the average student graduating this summer had submitted 21% more job applications on Handshake than their counterparts last year. In 2024, there was an average of 13.6 applications per student; this year, it was 16.5.

Students are also reevaluating their goals. Of the 57% of graduates who started college with a “dream job” in mind, less than half have the same aim now.

Location is more important to this class than salary, with 73% reporting they would be more likely to apply for a job in their desired location, and 63% saying they are more motivated by a high starting salary.

Concern about the consequences of generative AI has also risen. Nearly 80% of graduating students expect to use AI in the workplace, but 62% are at least slightly concerned about how these tools will affect job prospects, compared with 44% just two years ago.

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