AI's Hidden Impact: How Entry-Level Careers Are Being Redefined

As generative artificial intelligence (GenAI) becomes more sophisticated, it's reshaping the workforce in unexpected ways—particularly affecting entry-level employees. While early predictions suggested AI would act as a smart assistant for junior workers, recent research reveals a more complex reality.

The Wage Squeeze on Junior Roles

A working paper by IESE’s Mireia Giné and José Azar, along with Javier Sanz-Espín, analyzed data from 138 million U.S. workers. It found that after ChatGPT's launch, starting wages at AI-exposed companies dropped by 4.5%, with junior positions seeing a 6.3% decline. In contrast, senior compensation remained stable or even increased. This highlights how large language models (LLMs) automate tasks like drafting, coding, and basic analysis—tasks often concentrated in junior roles.

Shifting Corporate Structures

AI isn't just affecting pay; it's altering the composition of teams. In sectors like IT, consulting, and financial services, firms reduced the share of new junior positions by 4% and increased mid-level roles by a similar amount. As AI handles entry-level tasks, displaced junior employees seek promotions, leading to an oversupply of candidates for mid-level positions and pushing wages down further.

Research by Enrique Ide and Eduard Talamás shows that as AI gains autonomy, the least knowledgeable workers are most vulnerable to replacement. Meanwhile, senior employees benefit by using AI as an autonomous agent for specialized problem-solving, reinforcing the value of human judgment and strategic vision.

The Knowledge and Skills Pipeline Crisis

One of the biggest concerns is how future experts will be trained. Entry-level roles traditionally serve as a crucial learning phase, but with AI automating these tasks, the skills pipeline is at risk. Professor Sampsa Samila, director of IESE’s Artificial Intelligence and the Future of Management Initiative, asks, "Where do you get the experts?"

In AI-exposed firms, education requirements for junior and mid-level positions have declined, while senior roles remain unchanged. This suggests companies are not only shifting hiring but also redefining what these roles mean in an AI-driven world.