Cengage Group’s 2025 Employability Report Reveals Growing Gap Between Education and Employment

• Only 30% of 2025 & 41% of 2024 graduates find jobs in their field, while 48% feel unprepared to apply for entry-level positions
• 56% of unprepared grads cite job-specific skills as their biggest gap
• Employers and educators disagree on workforce skill priorities, educators emphasize soft skills, while employers want practical, job-specific skills

 

BOSTON – September 9, 2025 – The Cengage Group 2025 Graduate Employability Report reveals that this year’s graduates face the most constrained entry-level labor market in five years, with hiring pathways narrowing and skills mismatches compounding the challenge. While institutions, employers and graduates continue to contend with misaligned expectations, the findings underscore the urgent need for stronger collaboration to close gaps in career readiness.

Now in its fifth year, the report draws on insights from employers, recent graduates and, new this year, educators, offering the clearest picture yet of the disconnect between education and employment.

A Tightening Job Market for Graduates

Three-quarters (76%) of employers are hiring the same or fewer entry-level workers, up from 69% last year, driven by a tight labor market (51%), the rise of AI (46%) and broader economic pressures (46%). This shift is reflected in employer hiring struggles – in 2022, 65% reported difficulty finding entry-level talent, but in 2025 that number has dropped to just one-third (35%).

As hiring power shifts, degree requirements are resurging. Seventy-one percent of employers now require a two- or four-year degree for entry-level roles, up from 55% in 2024. The result is fewer opportunities and tougher competition for graduates:

• Just 30% of 2025 graduates (vs. 41% of 2024 graduates) have secured full-time jobs related to their degree
• 26% of 2025 graduates (vs. 24% of 2024 graduates) are employed in fields unrelated to their degree
• 33% of 2025 graduates and 20% of 2024 graduates are unemployed and actively seeking work

“The widening career readiness gap, along with the growing demand for upskilling driven by technological advancements like AI, is creating an urgent need to rethink how we equip learners for future employment,” said Michael Hansen, CEO of Cengage Group. “Closing this skills mismatch is essential to narrowing the wealth gap. When people can put their skills to work, they gain not just income, but also purpose, dignity and the stability that comes with building a sustainable career. To achieve this, the entire education ecosystem must work together to ensure the U.S. system keeps pace with an ever-changing world.”

Misalignment Between Institutions, Employers and Graduates

The report highlights the widening divide between what employers expect and what educators teach. Employers ranked job-specific technical abilities as their top priority, while educators placed those skills last, instead prioritizing soft skills like critical thinking and problem-solving. This disconnect leaves graduates caught in the middle, often underprepared for the realities of today’s labor market. While nearly 9 in 10 (89%) educators believe their students are prepared to enter the workforce, almost half of graduates (48%) say they feel unprepared to even apply for entry-level jobs in their field, and just over half (51%) feel confident in their AI skills when job-hunting.

 “Our research shows that while most educators believe their students are prepared to enter the workforce, graduates tell a different story,” said Kimberly Russell, SVP of Research, User Experience and Design at Cengage Group. “Half of educators dedicate 20% or less of their curriculum to workforce skills, and more than one-third (35%) of graduates wish their education program worked more closely with employers to build career-relevant courses and skills. These findings underscore the importance of stronger alignment across the workforce development system – without it, labor gaps will persist and so will the cycle of underprepared graduates and unfilled workforce needs.”

Connections Over Curriculum

The findings also highlight the outsized role of professional connections in shaping graduate outcomes. Graduates report that personal referrals (25%), internships and prior work experience (22%) and interview skills (20%) are more decisive in securing employment than the degree itself (17%). Yet one in five graduates (20%) say their education program didn’t help them foster professional connections. Strengthening partnerships between institutions, employers and learners will ensure graduates leave with not only academic knowledge, but also the connections and practical experience that open doors to career opportunities.

“The workforce development system is at an inflection point and this serves as a powerful opportunity to better align education more closely with workplace needs,” continued Hansen. “By putting employability at the center of learning, we can ensure graduates are prepared not only for their first job but for long-term career success. Employers, in turn, gain a stronger pipeline of talent that fuels innovation and supports broader economic growth.”

Learn more about the state of employability in the full report.

About Cengage Group   

Cengage Group is a global edtech company with over 100 years of experience supporting learners. Our four operating units—Higher Education, School, Work and English Language Learning—serve millions of students from middle school to graduate school and workforce skills training in over 125 countries. 

We empower student choice through trusted content, AI-driven insights, and scalable digital platforms that connect education to employment, ensuring learners gain career-ready skills and achieve tangible outcomes. Visit us at www.cengagegroup.com or find us on LinkedIn or X. 

###