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Objective: While most students undertaking bachelor level training in psychology will not become registered psychologists, as graduates they join a large pool of well‐educated and psychologically literate citizens who can apply psychology in a range of contexts. Our objective is to showcase the literature on capstone and work integrated learning (WIL) courses and outline how these specialised courses could be utilised to support undergraduate psychology students and ensure the community benefits from their strengths. Method: In this paper, we summarise the current issues, emerging trends, and educational priorities in this area. We provide a critical survey of the extensive literature produced in the last decade, offering a synthesis of current thinking in the field and perspectives on directions forward. We review and summarise different primary studies on capstone and WIL courses from which we draw conclusions into a holistic integration gained by the authors’ own experience and the available literature. Results: Capstone and WIL courses address a significant gap in the work readiness of Australian psychology undergraduates and may also consolidate these students’ psychological literacy. Conclusions: Developing a sense of professional identity and increasing self‐efficacy in these graduates can enhance students’ work readiness, potentially facilitating a smooth transition into professional work. We advocate for changes to the education of psychology undergraduates and outline the implications for the future workforce. [ABSTRACT FROM AUTHOR]