Graduate employability in the AI and globalisation era: implications for higher education institutions

Purpose Graduate unemployment has emerged as a significant global challenge, underscoring structural misalignments between higher education systems and contemporary labour market demands. This study investigates how artificial intelligence (AI) and globalisation shape graduate employability and the implications for higher education institutions (HEIs). Design/methodology/approach Guided by the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework, this study applied explicit inclusion criteria to identify peer-reviewed works published between 2012 and 2025 in the Scopus and Web of Science databases to achieve the research objectives. A total of 107 studies were analysed through a six-step thematic process involving familiarisation, generation of initial codes, theme identification, theme review, theme definition and naming, and synthesis and reporting. Findings Graduate employability is increasingly affected by AI-driven change, intensifying challenges such as skills mismatches, outdated curricula, limited institutional support, and inadequate practical experience. Automation and AI-enabled tools heighten demand for digital literacy, adaptability, and cross-cultural competencies, while global competition and the digital divide complicate workforce entry. At the same time, AI offers opportunities through personalised learning, lifelong skills development, work-integrated education, and ethical technology use. Addressing these dynamics requires HEIs to align curricula with industry needs, strengthen industry partnerships, integrate digital and entrepreneurial skills, and modernise career services. Practical implications The study offers actionable insights for higher education leaders, emphasising the urgency of aligning academic programmes with market realities and reinforcing academia–industry partnerships to prepare graduates for an AI-driven global economy. Originality/value By integrating perspectives on AI and globalisation, this study develops a thematic framework explaining employability dynamics and guiding institutional policy, curriculum reform, and future research.