Despite increased access to higher education, a significant gap remains between academic achievement and workforce readiness. According to the Chartered Management Institute (CMI), nearly 80% of employees do not enter the workforce fully equipped with the skills they need. This concern is echoed by business leaders, with a survey by Intelligent.com revealing that 40% of employers feel recent graduates are unprepared for the workplace. Additionally, 88% of respondents believe that graduates from the past three years are less prepared than their predecessors. Key areas of concern include work ethic and communication skills.
As these key areas suggest, career readiness extends far beyond academic qualifications. Students must first understand their career options before identifying the skills they need and where (and how!) to acquire them. This often happens well before they begin the job search - a process that can feel overwhelming without clear guidance. Given these challenges, it is worth questioning whether the traditional education system is effectively equipping students for today’s job market. Given the data above, it’s clearly not…
So, with this in mind, we explored i) how alternative models might better align with the evolving needs of businesses and industries and ii) which opportunities startups could address.
We also formed a market map, which you can dive into here!
The Impact of AI and Emerging Technologies
As AI continues to reshape the world of work, how will it affect junior employees, what skills will be most valuable in higher education, and which learning models will be best suited to prepare the workforce of the future?
The rise of AI and automation is accelerating shifts in workforce demand. According to the World Economic Forum’s (WEF) Future of Jobs Report 2025, 86% of business leaders expect AI and information processing technologies to transform their industries by 2030.
Adoption of generative AI has surged since the release of ChatGPT in 2022, and companies are increasingly integrating AI into their operations. As a result, 41% of employers surveyed anticipate reducing their workforce where AI can replace human tasks. However, 47% expect to transition employees into new roles, and 82% plan to hire new workers with AI-related skills. We can expect this picture to be dynamic as realities hit and employers realise how use of AI will impact their output and employees’ roles, whilst employees choose to evolve their skills. According to the data from the WEF report, the net effect is projected to be a global employment increase of 78 million jobs over the next decade, with 170 million new roles created and 92 million displaced.
While automation is unlikely to replace entire professions, AI is expected to reshape roles by automating repetitive and administrative tasks. Kathy Pham, VP of AI at Workday, explained how research shows that automation will target specific tasks rather than entire job functions. The research suggests that employers will need to determine which elements of work can be streamlined by AI and which require human oversight (Tech Brew). This shift will vary by industry, meaning students must consider how AI adoption will impact their chosen fields.
Historically, technological advances have not led to widespread unemployment. A study by Yang Shen & Xiuwu Zhang found that, rather than displacing human labour, automation has had a promotional effect, driving demand for complementary skills. However, for this to be the case, education and skills systems must adapt- identifying emerging skill requirements, designing curricula that align with future job markets, and encouraging lifelong learning through vocational training. The challenge is not just about preparing students for their first job but ensuring they can continually upskill as AI and automation evolve.
Despite the potential for job creation, AI is set to have a significant short-term impact on junior employees. Many entry-level roles involve precisely the kind of tasks AI is best at- data processing, research, scheduling, and customer service. As a result, companies may be less inclined to hire junior employees at the same rate as in the past. However, Jevons Paradox suggests that as automation makes tasks more efficient and cost-effective, demand for AI-powered workflows may increase, ultimately creating more work rather than less.
For example, if your employees can suddenly produce 3X as much work, you only need to invest in one additional person to get a substantial increase in output- hiring decisions become more straightforward because the return is outsized.
This could mean that while AI initially reduces demand for junior workers in traditional roles, it may also drive the creation of entirely new categories of entry-level positions. As AI takes over routine tasks, the developmental journey that shapes professional judgment and intuition may be fundamentally altered, necessitating a reevaluation of how early-career professionals gain experience. Without intervention, this shift could still create barriers for young professionals seeking early career experience. The education sector, employers, and policymakers must work together to rethink how young workers gain the practical skills and experience necessary to succeed in an AI-augmented workplace.
The role of policy in bridging education and employment
Smart policies can smooth the transition to employment for young people, offering diverse routes that match different skills, interests, and ambitions. We have outlined some of the options available to students, but here we will run through the measures government can take to ensure students find paths that suit them - whether those paths are in vocational training, apprenticeships, university education, or alternative careers.
1. Vocational Education and Training (VET)
In Germany and Switzerland, vocational routes dominate, with significant credibility. It arms students with real-world skills tailored to specific industries- including in healthcare, IT, engineering, and the arts. These programs mix classroom learning with hands-on experience, setting students up for direct entry into the workforce.
Policy moves to broaden take-up:
Expand Access: Offer more vocational courses at both secondary and post-secondary levels.
Industry Partnerships: Align training with real job market needs by working with businesses.
Certification & Accreditation: Standardise qualifications to ensure national recognition and career mobility.
E.g.: Government subsidies for vocational training; Tax breaks for companies offering apprenticeships; A national database of vocational qualifications.
2. Apprenticeships
In the UK, apprenticeships are a growing success story. They blend paid work with structured education, allowing students to learn on the job while earning a salary. Available in fields from construction to healthcare, apprenticeships provide hands-on experience under expert guidance.
Policy moves to broaden take-up:
Boost Awareness: Educate students, parents, and schools on apprenticeship benefits.
Incentivise Employers: Offer financial perks like tax credits or wage subsidies.
Ensure Quality: Set national training standards and monitoring systems.
E.g.: Employer grants for hiring apprentices; A national apprenticeship framework to maintain high training standards; School-based career counselling to promote apprenticeship opportunities.
3. University Education
A well-trodden path in Europe, university education emphasises academic depth, critical thinking, and research. It prepares students for specialised careers or advanced studies. From humanities to STEM, universities remain a key engine of professional development.
Policy moves to broaden take-up:
Financial Support: Expand scholarships, grants, and student loan programs.
Bridging Pathways: Support transition programs for underprivileged students.
Industry Collaboration: Connect universities with businesses to design practical curricula and internships.
E.g.: Increased funding for merit- and need-based scholarships; Support initiatives for first-generation university students; University-industry partnership grants.
4. Alternative Pathways
Not all roads lead through traditional education. Many young people find success through alternative routes, from entrepreneurship to public service to structured gap years.
Policy moves to broaden take-up:
Foster Entrepreneurship: Support start-up incubators and youth grants.
Encourage Public Service: Create national programs with stipends for work experience in community service.
Recognise Gap Years: Develop accredited programs that mix travel, work, and education.
E.g.: Start-up funding for young entrepreneurs; Government-backed public service initiatives; Accredited gap year programs with career counselling.
No single path fits everyone. A smart policy framework recognises this, offering multiple avenues that cater to diverse ambitions. By investing in education-to-employment transitions, governments can boost employability, strengthen economies, and empower the next generation.
The shifting value of a university degree in the context of alternative pathways
Universities have long been seen as a crucial stage in a student's development and a key step toward career success. A survey by King’s College London found that 47% of parents consider university important for their child’s future. However, attitudes towards higher education are shifting. While only 37% of parents believe it is harder to secure a good job without a degree, 69% still value university for its own sake, beyond just job prospects. Interestingly, 48% of parents would now prefer their child to pursue an apprenticeship, compared to 40% who favour university, reflecting a growing appreciation for alternative career pathways.
Employers are increasingly prioritising skills over degrees in hiring decisions. The Institute of Student Employers (ISE) reported that the percentage of UK employers requiring a 2:1 degree fell from 75% in 2014 to less than 50% in 2022. Similarly, LinkedIn data shows that UK job ads not requiring a degree rose by 90% between 2021 and 2022. This shift reflects a growing recognition that traditional academic credentials are not always the best predictor of workplace success.
Relaxing degree requirements has allowed employers to tap into a more diverse talent pool, enabling them to hire candidates based on practical skills and competencies rather than formal education credentials. A Bloomberg Law report highlights how this shift is being reinforced by pending legislation aimed at boosting skills-based hiring. As Forbes notes, this trend is challenging traditional hiring norms, emphasising real-world abilities over formal education.
Even at the highest levels of education, the value of a degree is being questioned. Graduates of Harvard Business School—Fortune’s top-ranked MBA program—are finding it increasingly difficult to secure jobs. In 2022, 10% of Harvard MBA graduates were still job-hunting 90 days after graduation; today, that number has risen to 23%. While broader economic downturns in tech and finance have played a role, the shift toward specialised skills over generalist qualifications is also a contributing factor.
Universities are increasingly under pressure to better equip students for the workforce, yet many still fall short in providing the skills and experiences that align with employer needs. As the job market evolves and skills-based hiring gains traction, higher education institutions may need to rethink their approach to career readiness—moving beyond traditional academic instruction to incorporate practical, industry-relevant training.
One major area for improvement is university career services, which often fail to effectively support students in navigating the transition from education to employment. According to NACE, only 43% of students find their university’s career services useful, highlighting a significant gap in guidance and support. To remain relevant, universities may need to strengthen their industry partnerships, integrate real-world learning experiences, and develop more personalised career support to ensure graduates are better prepared for the demands of the modern workforce.
The rising popularity of vocational schools and apprenticeships
Across Europe, vocational education and apprenticeships are increasingly recognised as viable alternatives to traditional university degrees. Countries such as Germany, Switzerland, and Austria have long-established dual education systems, where students split their time between classroom-based learning and paid, hands-on work experience. This model has contributed to low youth unemployment rates and a workforce well-prepared for industry demands. For instance, Germany's dual system of vocational training has been identified as a key factor in reducing youth unemployment (Eurofound). In contrast, apprenticeship growth in the UK has been more stagnant. While degree apprenticeships—allowing students to earn a salary while studying—have gained some traction, overall apprenticeship starts have plateaued in recent years. In 2022/23, there were 752,000 people participating in an apprenticeship in England, but this figure has fluctuated rather than steadily increasing (UK House of Commons Library). This suggests that, while there is growing interest in vocational routes, more policy support may be needed to drive adoption at scale.
Public attitudes toward vocational pathways appear to be changing. A King’s College London study found that 76% of respondents support increasing apprenticeship opportunities, nearly double the 36% who advocate for greater university access. Similarly, a YouGov survey revealed that 45% of the public believes apprenticeships better prepare young people for the future than a traditional degree. This shift is further reinforced by economic realities—vocational training often leads to directly to employment opportunities, this combined with lower student debt, making it a more attractive option for many students and families.
As vocational pathways continue to gain prominence, there is potential for them to become more integral to workforce development, possibly reducing the traditional reliance on university degrees. This shift underscores the need for educational institutions to adapt and align their offerings with the evolving demands of the labour market.
The Market map
Our market map provides an overview of key players in this space, with a primary focus on European companies, it is important to note that this is not an exhaustive list of all companies operating in this space - we have prioritised demonstrating the market structure and different categories of solutions.
We have segmented companies along two key dimensions:
X-axis: The stage at which they support students—ranging from training (developing relevant skills), career discovery (helping students explore roles and required skills), to placement (assisting students in finding and applying for jobs).
Y-axis: The frequency of use, with companies at the top offering ongoing engagement (e.g., continuous learning or career development platforms), while those at the bottom provide one-time or infrequent use (e.g., job application tools or career assessment platforms).
It's important to note that some companies operate across multiple categories, and their placement reflects where they are most relevant at this point in time. This mapping helps illustrate the landscape of solutions available to students as they navigate their transition from education to employment.
Opportunities
Monetisation, and VC scalability within this market can be challenging.
Solutions in this space targeting schools and universities often struggle due to limited career services budgets, making it difficult to achieve sustainable growth when relying on these institutions as core customers. To secure institutional investment, startups must clearly demonstrate ROI beyond cost savings, positioning their offerings as essential for student outcomes and long-term employability.
For companies selling directly to students and parents, affordability remains a key hurdle, necessitating innovative financing solutions. Some startups have experimented with outcome-based pricing models- such as deferred payments until employment is secured- but these models introduce cash flow constraints and higher financial risk.
B2B solutions targeting corporates offer an alternative route, but success is heavily tied to the cyclical nature of hiring trends. Economic downturns and shifts in corporate hiring strategies can significantly impact graduate recruitment budgets, posing risks for startups reliant on this revenue stream. Despite these challenges, opportunities exist for startups that can effectively align their solutions with employer needs, bridge talent gaps, and prove their long-term value in an evolving job market.
Non-traditional, accredited university alternatives
A new wave of fully accredited, non-traditional university alternatives is emerging, offering students a more flexible, skills-focused, and cost-effective path to higher education. These programs provide recognised qualifications while emphasising practical, real-world learning, equipping students with the expertise needed to thrive in today’s workforce.
OneDay is a prime example, enabling students to build their own businesses under the mentorship of seasoned entrepreneurs. By the end of the program, graduates not only earn an MBA but may also leave with a revenue-generating company, giving them both academic credentials and hands-on experience.
This hybrid approach to education—blending academic rigour with applied learning—could be expanded across various disciplines, creating more relevant, outcomes-driven alternatives to traditional degree programs. As demand grows for personalised, career-aligned education, such models have the potential to reshape higher learning and better prepare students for the evolving job market.
It would also be possible for traditional universities to diversify their offers in this direction.
AI Career Co-Pilot: Personalised Pathways & Work Experience
AI-driven career platforms can offer young people personalised career guidance, skills training, and flexible work experience to better prepare them for the job market. With 40% of employers stating that graduates lack workplace readiness and traditional career services failing to scale, AI has the potential to bridge the gap between education and employment by providing tailored support at scale.
An AI career co-pilot could act as a personalised mentor for 16-24-year-olds, guiding them through career discovery, skills gap analysis, and project based work experience placements. By leveraging AI-driven career fit assessments, micro-internships, and gig-style work experiences, the platform would help users gain real-world exposure beyond traditional internships. Companies like Handshake have started to demonstrate the potential of such a solution, but we believe there are further opportunities in this space, offering students tangible actions to take from the age of 16, helping them identify skills gaps, training requirements and eventually employment opportunities.
This AI-driven approach has the potential to reshape early-career development, creating a LinkedIn-style ecosystem for under-25s, By providing structured guidance and real-time career planning tools, such a platform could help students make informed decisions, develop critical skills, and seamlessly transition into the workforce.
Cross-Border Digital Apprenticeship & Graduate Work Platform
Europe is experiencing a growing demand for vocational training and apprenticeships. However, while university students benefit from EU-wide mobility through Erasmus, there is no equivalent for apprenticeships. At the same time, severe skills shortages in both blue-collar and green-collar jobs—including renewable energy, construction, advanced manufacturing, and healthcare—highlight an urgent need for cross-border workforce development.
Despite the promotion job mobility, there is no centralised platform to connect apprentices and graduates with cross-border work opportunities. A lack of standardised qualifications, complex visa processes, and fragmented employer networks make it difficult to connect talent with industries that need it most. A digital-first, cross-border job search and apprenticeship platform, that also supports graduates with the process of relocation could bridge this gap, enabling students to train, work, and gain credentials across multiple countries.
Conclusion
The transition from education to employment is becoming increasingly complex, with traditional pathways such as university degrees facing growing scrutiny. While higher education remains a valuable experience for many, the widening gap between academic qualifications and workforce readiness suggests that alternative routes—including apprenticeships, vocational training, and new education models—are becoming critical to addressing the needs of the modern labor market. As AI and automation reshape job roles, skills-based hiring is gaining traction, further reinforcing the need for practical, experience-driven learning.
Policymakers, educators, and employers must work together to create flexible, accessible, and scalable solutions that align education with the realities of today’s workforce. This means expanding vocational education, strengthening apprenticeship programs, fostering industry-academic partnerships, and rethinking career services to provide better guidance and support for students. Moreover, startups and innovators in the EdTech and workforce development space have a significant opportunity to disrupt outdated models, bridging gaps between education, training, and employment.
Looking ahead, the future of post-16 education will be shaped by adaptability, innovation, and a commitment to skills-based learning. The question is no longer whether alternative pathways will gain prominence, but how quickly they will evolve to meet the demands of a changing economy. The most successful models will be those that prioritise skills, provide real-world experience, and create seamless transitions between learning and employment, ensuring that students are not just educated, but employable.
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Appendix
Real-world examples of policy support in the education-employment space.
Here’s a summary of examples from a selection of European markets…
Country | Example policy approach | Key Features | Impact |
Germany | Dual Vocational Training System | Government-industry partnership: Close collaboration to design and implement vocational training. National certification: Standardised qualifications recognised across the country Financial support: Apprentices receive a salary during training. | Reducing youth unemployment. High skill level among workforce:Ensures a highly skilled labour force. |
Switzerland | Vocational Education and Training (VET) | Structured pathways: Wide range of vocational courses leading to national qualifications. Industry involvement: Strong industry role in curriculum design and implementation. Apprenticeship opportunities: Extensive opportunities across sectors. | · Low youth unemployment. · Strong vocational training system:Renowned for its effectiveness in helping youth reach employment opportunities. |
Denmark | Flexible Higher Education System | Education-work combination: Programs allowing students to work while studying, like co-op programs. Generous financial support: Scholarships, grants, and loans for living expenses and tuition fees. Lifelong learning: Policies encouraging continuous education and retraining. | · High higher education participation: Supports broad access to higher education. · Smooth labour market transition:Facilitates transition into the labour market. |
UK | Apprenticeship Levy | Employer contribution: Large employers pay a levy to fund apprenticeship training. Funding allocation: Funds used to pay for apprenticeship training and assessment. Increased apprenticeships: Incentives for employers to create apprenticeship opportunities. | · Increased apprenticeship opportunities: Significant increase in available apprenticeships. |
Netherlands | Youth Unemployment Action Plan | Targeted interventions: Specific programs for school leavers and graduates. Collaboration: Cooperation between government, educational institutions, and employers. Support services: Career guidance, training programs, and job matching services. | · Reduced youth unemployment |
Spain | Formación Profesional (FP) System | Dual FP programs: Combines classroom learning with practical work experience. Work placements: Mandatory internships for hands-on experience. National recognition: Qualifications recognised across Spain and the EU. | Clear transition to labour market: Helps address youth unemployment and skill gaps. |
France | Apprenticeship and Alternance Programs | Alternance system: Students alternate between school and work.
Financial incentives: Subsidies and tax incentives for companies hiring apprentices. Training contracts: Formal agreements ensuring quality training and fair compensation. | Practical work experience:Provides essential work experience. Reduced youth unemployment |
Italy | Alternanza Scuola-Lavoro (ASL) and Youth Guarantee | ASL Program: Mandatory work placements for high school students. Youth Guarantee: Personalised job search assistance for under 30s. Financial backing: Funded by national and EU sources. | Enhanced employability: Improves job readiness. Reduced youth unemployment |
United States | Career and Technical Education (CTE) and Registered Apprenticeships | CTE programs: Integration of academic and technical skills in education. Perkins Act funding: Federal support for CTE program development. Registered Apprenticeships: Combination of paid work experience and classroom instruction. Industry partnerships: Aligns training with labour market needs. WIOA support: Job training and employment services, including youth programs. | Practical skills development: Provides students with job-ready skills. Improved employment outcomes:Helps bridge the gap between education and employment. |
References:
Germany: Dual Vocational Training System
Federal Ministry of Education and Research (BMBF). (2020). "The German Vocational Training System."
European Centre for the Development of Vocational Training (Cedefop). (2018). "The German Vocational Education and Training System."
Switzerland: Vocational Education and Training (VET)
State Secretariat for Education, Research and Innovation (SERI). (2020). "Vocational and Professional Education and Training in Switzerland: Facts and Figures 2020."
Federal Department of Economic Affairs, Education and Research (EAER). (2019). "The Swiss Vocational Education and Training System."
Denmark: Flexible Higher Education System
Ministry of Higher Education and Science. (2017). "Higher Education in Denmark."
OECD. (2019). "Education Policy Outlook: Denmark."
UK: Apprenticeship Levy
UK Government. (2021). "Apprenticeship Levy: How it Works."
Institute for Apprenticeships and Technical Education. (2020). "Apprenticeship Funding Rules and Guidance for Employers."
Netherlands: Youth Unemployment Action Plan
Ministry of Social Affairs and Employment. (2015). "Action Plan for Youth Employment."
European Commission. (2018). "Youth Employment Initiative in the Netherlands."
Spain: Formación Profesional (FP) System
Ministry of Education and Vocational Training. (2020). "Vocational Training in Spain."
European Commission. (2019). "Education and Training Monitor: Spain."
France: Apprenticeship and Alternance Programs
Ministry of National Education, Youth and Sports. (2021). "Apprenticeships in France."
OECD. (2020). "Review of the French Apprenticeship System."
Italy: Alternanza Scuola-Lavoro (ASL) and Youth Guarantee
Ministry of Education, University and Research. (2018). "Alternanza Scuola-Lavoro."
European Commission. (2019). "Youth Guarantee Country Report: Italy."
United States: Career and Technical Education (CTE) and Registered Apprenticeships
U.S. Department of Education. (2020). "Career and Technical Education."
U.S. Department of Labour. (2021). "Registered Apprenticeship Program."
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