07 Apr 2026
The rapid adoption of AI is driving a sharp decline in entry-level jobs and worsening the long-standing UK challenge of skills shortages, warns the British Chambers of Commerce (BCC).
With AI now capable of performing tasks more efficiently and the employment costs ever-increasing, businesses may be questioning whether many entry-level roles remain necessary, says the business group.
According to the BCC, many UK businesses continue to struggle to find workers with the right skills, with labour costs remaining their top cost pressure.
AI adoption among UK SMEs is accelerating rapidly. A new study by the BCC shows that 54% of SMEs are now using AI tools, more than double the 25% reported in 2024.
However, adoption remains uneven. Larger firms and professional services are leading the way, while smaller and consumer-facing businesses are more hesitant.
The BCC said: 'Taken together, rising costs and AI adoption could fundamentally reshape the entry-level job market. Fewer entry-level opportunities mean that young people may have less chance to gain work experience and develop essential skills. This could lead to structurally higher youth unemployment and intensified skills shortages across industries.
'Supporting entry level workers to develop the right skills in an AI-driven world is not just about individual career progression – it is an investment in the long-term health of the economy. In a world of rapid technological change and rising costs, developing the next generation of workers today remains essential to prevent widening skills gaps tomorrow.'