European tech has a hiring problem that nobody wants to talk about. While founders obsess over landing senior engineers and AI specialists, they are quietly abandoning the pipeline that produces them.
The numbers are stark. According to Ravio’s 2025 Tech Job Market Report, entry-level positions in European tech have seen a 73% decrease in hiring rates over the past year. That’s not a dip. That’s a collapse. And while overall hiring rates have declined by only 7%, the bottom of the funnel has essentially disappeared.
Founders making hiring decisions today are creating problems they will not feel for another three to five years. By then, the mid-level talent gap will be impossible to fill at any price.
The entry-level experience paradox
Something strange has happened to junior roles. According to TalentUp’s analysis, many positions labelled “entry-level” now require three to five years of experience. Unrealistic prerequisites now gatekeep junior roles that once trained and developed raw talent.
The dynamics vary across Europe. Germany maintains strong apprenticeship models in traditional trades but lacks a scalable equivalent for tech. France’s government-sponsored training programmes often fall short of connecting talent to real jobs. In the UK, inflation limits startup hiring budgets. In Scandinavia, title inflation masks the issue, as junior positions are rebranded with mid-level expectations.
Meanwhile, ATS and AI-driven recruitment systems scan CVs for keywords, filtering out applicants without prior experience before they are even seen by a human. The result is a bottleneck of frustrated young professionals across Europe, holding degrees in computer science and data analytics but unable to get their foot in the door.
The AI paradox making things worse
AI tools are accelerating the problem. Senior engineers using AI assistants can now handle tasks that would previously have gone to juniors. The temptation to skip entry-level hiring entirely has never been stronger.
But this logic has a fatal flaw. As AWS CEO Matt Garman put it: “That’s like one of the dumbest things I’ve ever heard. How’s that going to work when ten years in the future you have no one who has learned anything?”
Garman’s point cuts to the heart of the issue. Juniors are not just cheap labour for repetitive tasks. They are the training ground for tomorrow’s senior engineers, engineering managers, and CTOs. Skip that layer, and you are not saving money. You are borrowing against your future leadership pipeline.
The SignalFire State of Talent Report found that new graduates now make up under 6% of startup hires, down more than 30% from pre-pandemic levels. The share of new graduates landing roles at major tech companies has dropped by more than half since 2022.
The compounding cost of inaction
The talent shortage is not abstract. Jobbatical’s research projects that Germany alone will face a shortage of seven million skilled workers by 2035. EU-based companies already report labour shortages as a challenge at a rate almost 30% higher than their counterparts in North America and Asia.
For founders, this creates a vicious cycle. Senior talent becomes more expensive and harder to find. Competition for experienced engineers intensifies. And the pool of mid-level candidates who might have grown into senior roles simply does not exist because nobody hired them five years ago.
The Ravio report captures it well: “If you don’t hire and nurture young talent now, what will your mid-level and leadership positions look like in five years? We’re heading towards some very difficult and expensive recruitment to fill that gap.”
What smart founders do differently
The founders, thinking long term, are treating junior hiring as R&D investment, not overhead. They understand that the economics of building senior talent internally almost always beat the economics of competing for it externally.
This means structured graduate programmes, hire-to-train models, and rotational roles that develop raw talent into company-specific expertise. It means pairing junior hires with AI tools rather than replacing them with AI tools, recognising that the juniors who learn to work alongside AI will become the most valuable senior engineers of the next decade.
It also means rethinking job requirements. The “entry-level experience paradox” is a self-inflicted wound. Companies that remove unrealistic prerequisites and invest in onboarding access talent pools their competitors have written off.
The European startup ecosystem has matured dramatically. The founders building companies today face more sophisticated competition for talent than any previous generation. Those who recognise that today’s juniors are tomorrow’s senior pipeline will be the ones still scaling five years from now. The rest will be wondering where all the mid-level talent went.
Read the orginal article: https://www.eu-startups.com/2026/02/why-european-startups-are-sleepwalking-into-a-talent-crisis/
