Small companies are planning to hire fewer recent college graduates than they did in 2025, making it seemingly tougher for this cohort to seek out entry-level jobs.
In our recent national survey, we discovered that small companies are 30% extra seemingly than bigger employers to say they aren’t hiring recent college graduates in 2026. About 1 in 5 small-business employers mentioned they don’t plan to rent college graduates or anticipate to rent fewer than they did final yr.
This might be the most important anticipated lower in small companies hiring new graduates in additional than a decade.
Small companies are typically these with fewer than 500 workers, based mostly on requirements from the U.S. Census Bureau and federal labor data.
This slowdown is occurring nationwide and is affecting early-career hiring for individuals graduating from each school and graduate packages—and is extra pronounced for individuals with graduate levels.
Almost 40% of small companies additionally mentioned they don’t plan to rent, or are chopping again on hiring, current grads who don’t have a grasp’s of enterprise administration. Virtually 60% mentioned the identical for individuals with different skilled levels.
Nationwide information exhibits the identical development. Solely 56% of small businesses are hiring or trying to hire anybody in any respect, based on October 2025 findings by the Nationwide Federation of Impartial Enterprise, an advocacy group representing small and unbiased companies.
Job openings at small employers are at their lowest since 2020, when hiring dropped sharply in the course of the early months of the COVID-19 pandemic.
Some small companies could change their hiring plans later within the spring, however our survey reveals that they’re approaching hiring cautiously. This offers new graduates or college students getting their diplomas in just a few months info on what they will anticipate within the job marketplace for summer season and fall 2026.
How small companies have a tendency to rent new workers
Our survey, which has been carried out yearly on the LeBow Center for Career Readiness at Drexel University, collected information from 647 companies throughout the nation from August 2025 by means of November.
About two-thirds of them had been small companies, which displays their distribution and proportion nationally.
Small companies employ nearly half of private-sector employees. Additionally they supply lots of the first skilled jobs that new graduates get to start out their careers.
Many small employers in our survey mentioned they need to rent early-career employees. However small-business house owners and hiring managers usually discover that coaching new graduates takes extra time and help than they can provide, particularly in fields like manufacturing and well being care.
That’s why many small employers want to rent interns they know or cooperative education students who had beforehand labored for them whereas they had been enrolled as college students.
Bigger employers are additionally being extra cautious about hiring, however they often face fewer challenges. They usually have structured onboarding, devoted supervisors and formal coaching, to allow them to higher help new workers. That is one motive why small companies have seen a much bigger slowdown in hiring than bigger employers.
Then there are small companies in cities which are open to hiring current graduates however are struggling to seek out employees. In cities, housing costs are often rising faster than beginning salaries, so graduates must stay farther from their jobs.
Within the suburbs and rural areas, lengthy or unreliable commutes make issues worse. Since small companies often rent regionally and can’t pay increased wages, these challenges make it tougher for graduates to simply accept and preserve entry-level jobs.
Trade and regional patterns
Job prospects for current school graduates rely on the business. The 2026 survey exhibits that employers in well being care, development and finance plan to rent extra graduates than different fields. In distinction, manufacturing and humanities and leisure anticipate to rent fewer new graduates.
Most new jobs are in well being care and development, however these fields often don’t rent many current school graduates. Well being care development is concentrated on skilled medical and help roles, whereas development jobs are principally in expert trades that require prior coaching or apprenticeships as a substitute of a four-year diploma.
So, even in rising industries, there are nonetheless restricted alternatives for individuals simply beginning their careers.
Although small companies are hiring much less, there are nonetheless alternatives for current graduates. It’s essential to be intentional when getting ready for the job market. Getting sensible expertise issues greater than ever. Internships, co-ops, undertaking work and short-term jobs assist college students present they’re prepared earlier than getting a full-time place.
Employers usually say that understanding how the office operates is simply as essential as having technical abilities for individuals beginning their careers.
We frequently remind college students in our courses at LeBow College of Business that communication {and professional} abilities matter greater than they anticipate. Writing clear emails, being on time, asking considerate questions and responding effectively to suggestions could make candidates stand out. Small employers worth these abilities as a result of they want each staff member to contribute immediately.
College students must also put together for in-person work. Virtually 60% of small employers in our survey need full-time hires to work on-site 5 days per week. In smaller corporations, graduates who can tackle completely different duties and regulate rapidly usually tend to set themselves aside from different candidates.
Lastly, native networking remains to be essential. Most small employers rent primarily inside their area, so constructing relationships and staying energetic in the neighborhood are key for early-career alternatives.
Murugan Anandarajan is a professor of determination sciences and administration info Techniques at Drexel University; Cuneyt Gozu is an affiliate medical professor of organizational conduct at Drexel University, and David Prisco is a director on the Heart for Profession Readiness at Drexel University.
This text is republished from The Conversation underneath a Artistic Commons license. Learn the original article.
