The job market is always changing, and every year brings something new in how companies hire people. It can be hard to keep track, but if you understand these changes, it can help when it comes to planning how to find the right candidates.

Recruiters face a bunch of problems every year. These can range from smaller budgets, money troubles, and shifts in how the job market works.In this article, we’ll take a quick look at what’s been happening lately in hiring. We will discuss changes in how companies find talent and the growing love for remote and hybrid jobs. Then, we’ll talk about what might be coming in 2025.

Major Changes in the Recruitment Market in 2025

The job market was all over the place last year. There were tons of job openings around mid-2024, but after that, things didn’t go as expected.

The economy didn’t grow as much as people hoped, which led to a lot of layoffs in different companies. In tech alone, more than 240,000 jobs were lost in 2023; that’s 50% more than in 2022.

Generally speaking, both company recruitment efforts and the number of job seekers were down in 2024 compared to the year before. LinkedIn’s State of the Labor Market report pointed to a continued worldwide slump in hiring activity.

Even with more tech talent on the market, companies still struggled to find candidates with the right skills. Globally, 70% of tech leaders reported a serious need for skills in areas like “cybersecurity expertise,” “big data analytics,” and “software architecture.”

In fact, 62% of CIOs are worried that they may never have enough tech-skilled people to keep up with the modern market’s demand for speed, innovation, and affordable solutions.

Technology is automating a lot of routine tasks like problem-solving skills, logical thinking, and creativity. This is making it ten times harder to find candidates who have strong soft skills. Sadly, many companies don’t have enough of these skills in their current workforce.

With employee engagement rates dropping, skills became a top priority for retaining talent. Teams with strong interpersonal skills and a good corporate culture are less likely to lose their best employees.

Why are so many employees unhappy and leaving? The main reason for the Great Resignation was a toxic workplace culture. It was a much stronger predictor of employee attrition than pay. In 2024, a third of US employees quit due to value misalignment with their employers. A third of UK employees resigned due to poor management.

According to statistics, if companies end the flexibility of remote work, more people might quit. In 2023, hybrid work became pretty normal. Most big companies in the US let employees work from home a few days a week. They usually only asked them to come in two or three days.

However, most companies, about 9 out of 10, are planning to bring people back to the office in 2025, at least part of the time. The problem is, if they push too hard, they could lose workers. Around 72% of employees say they’d take a pay cut just to keep working from home.

Last year’s recruiting trends set the stage for new developments. Here’s what we anticipate for 2025.

Skill Hiring

Every year, hiring becomes more expensive and also takes up a lot of time. So, every new person you are hiring matters now. Companies are rethinking how to recruit and how to prefer skills more than just what’s on the resumes. Candidates are not tested on a closer and wider scale.

Many HR teams are calling skill tests highly important. 79% of them believe that tests matter more than even the education and experience at times. 36% take in candidates who score well even if they don’t meet the other important requirements.

This different approach is opening doors to more talent. Skill tests can increase the number of actual qualified candidates to almost double. You get a wider mix of people, which means more diversity. It can be anyone from veterans, women, or Black students. Now, keep in mind these groups who are usually overlooked because of the traditional filters.

You will see many well-known companies implementing this change. Let’s take Google for example. They are using skill-based hiring to get along with the changing market. IBM went even further and decided to offer programs that help people build the right skills, and there is no degree needed for it.

The best part of this approach is obviously the use of live tests to choose candidates. There is no guessing, no confusion, and hiring managers can just easily use the work samples. There are tools for it as well, like Toggl Hire. This lets you check the skills through simple tests and tasks.

Companies can create their own tests to make things easier. Expert-approved questions can help find people who are capable and from different backgrounds. In the future, companies will have stronger teams

To make this work, companies should create their own tests using expert-approved questions. This helps find people who are both capable and from different backgrounds. It also builds stronger teams for the future.

If you want to apply this method, begin with a clear job analysis. List out what the role actually needs in terms of skills—not just degrees or past job titles. Use short pre-employment tests to screen candidates early. Then, add a mix of interviews and tasks that reflect real work. Skip background-based questions to avoid bias. Ask how candidates solve problems or handle challenges instead. A mix of structured interviews and skill checks gives a clear picture of both ability and fit.

Contract Workers

Since 2020, many companies have started relying on temporary, seasonal, and freelance workers. It was to keep up with the shifting demands, because this way companies can stay agile and ahead of the curve.

A new study revealed that almost all Fortune 500 companies have moved to online platforms for talent hunting. 30% of them use these platforms for project-based roles and the other 30% use them occasionally. The rest plan to use them in the future.

It’s highly possible that in the near future, 35%-40% of the global workforce might consist of contract workers. And this means the hiring teams will work a lot faster and manage multiple job postings easily. The classifications will be accurate and onboarding/offboarding processes will be much smoother.

So, to make this work, companies need to properly start outlining what the work actually is. Focus less on rigid job titles and more on the tasks that need to get done. Identify which roles are short-term, which are fast-moving, and which might stick around for the long haul.

In 2025, hiring should focus more on skills. Contractors should be aware of any insurance, certifications, or licenses they might need. Adopting a contractor-friendly hiring model can help speed things up. It helps open the door to a much wider talent pool.

Here are some tips for hiring contractors:

  • You need to understand their style. Each prefers different things. Some prefer flat rates per project, and others like hourly/daily rates better.
  • Get social with your search. Contractors hang out on LinkedIn and X a lot. And surprisingly, they work better than old-school job boards.
  • Make sure you respect their rate. It’s because independent workers pay their own taxes and have to cover their expenses. For this reason, they usually ask for higher pay. The best thing is to discuss work scope honestly.

AI in Hiring

Artificial intelligence has become essential for both recruiters and job seekers. Candidates often use AI tools to build resumes and write cover letters. In 2023, around 70% of college seniors relied on AI for these tasks, showing its growing influence.

While AI isn’t new in career assistance, professional resume writers and job coaches have been around for decades. Now, it’s more automated. HR managers are aware that AI may write the resumes they review. This prompts tools like Toggl Hire to eliminate resume screening.

If you’re looking to hire the best talent today, you have to change your recruiting methods. Instead of simply testing candidates on tasks that AI can handle easily, test their skills through practical assignments. Ask about their soft skills, and use modern tools like Toggl Hire. These can help with anti-cheating measures and fair evaluation.

Concerns regarding AI use are increasing day by day, but the hiring teams are finding ways to use it in a good way. Let’s look at a few examples. Mastercard is using AI games to check the skills of their employees, and T-Mobile is using AI to remove any biased language from their job descriptions.

In 2025, we can expect AI’s role to advance much further. This can help in writing job descriptions and when communicating with candidates.

New and modern algorithms are allowing HR technology to make a lot of tasks much simpler. This includes interview scheduling, ad placement, and even new hire onboarding. As for the AI chatbots, they help with candidate communication and smooth recruitment marketing.

With the use of AI, document processing is now a lot easier as well. Decision-making is much better and you can also analyze workforce trends. Diversity and inclusion automatically get better.

Hiring in 2025: Smarter Strategies for a Changing Workforce. Source: CodeQuotient

Recruiter’s Market 

Next year, hiring might get tougher. It’s turning into more of a recruiter’s market, but the fight for good talent isn’t going anywhere. In the U.S., the unemployment rate is expected to stay around 4%. In the EU, it’ll probably hold at 6%.

At the same time, a lot of people might quit their jobs, mostly because of low pay or not having a good work-life balance. The tech industry could also see more layoffs.

9 out of 10 companies are saying that they might reduce their staff in 2025. This means more layoffs and more candidates looking for jobs. This might be good for recruiters, and it is to some extent but it also means they will have more applications to review. Sorting through them is going to take a lot longer, and then setting individual interviews is a hectic task.

Now, if there is no clear hiring process, wrong choices can take place. And that is exactly why skills tests are important, as we already discussed above. You get good candidates, and there is no time wasted.

At times many applicants don’t have a balanced mix of technical and soft skills. At this point, proving what you can do should be most important. And this is true for both employers and job seekers.

If you use skills tests, you can filter quickly through a large pool of candidates. AI helps as well. It can keep up with tasks like background checks or the onboarding process.

Follow these tips to manage candidates better:

  • Job listings should be updated every now and then
  • If you have any non-negotiables, be absolute clear
  • Don’t rely on resumes only. Use quick logic tests or skill tests
  • Cultural focused interviews help as well

Skills Gaps 

Despite more candidates this year, skill shortages remain due to digital shifts, an aging workforce, and fewer STEM graduates, especially women.

Today’s jobs need digital skills like data analytics, business software proficiency, and low-code abilities beyond tech roles. Job skills have evolved since 2015, and experts anticipate more changes by 2027. CXOs see upskilling and workforce growth as the top challenges for next year.

To solve these, HR must assess gaps and understand technology’s role in jobs.

Tips for Closing Skills Gaps 

  • Analyze talent gaps to find needed skills for recruitment and training
  • Use coaching to engage and keep staff, guiding their training
  • Give a training budget so staff can choose development
  • Start apprenticeships to teach graduates key skills for workforce readiness

Multigenerational Workforce

Employers today manage a workforce spanning five generations: the Silent Generation, Baby Boomers, Gen X, Millennials, and Gen Z. This diversity poses a challenge. It is hard to maintain the company culture while meeting the needs of each generation.

To attract and keep top talent across different ages, companies should offer personalized benefits. They should provide flexible work, career growth opportunities, and a clear mission. This respects each generation’s values and preferences.

Finding this balance pays off. Companies that blend these generations can have diverse experiences, perspectives, and ideas, driving innovation.

Improving Employee Engagement

Employee engagement has remained a consistent issue. We have seen shifts in workforce dynamics throughout the years, from the Great Resignation to quiet exits and layoffs last year. In 2025, HR professionals plan on fixing this decline.

There are a lot of factors that have reduced workforce optimism. Some of them are higher living costs, stagnant salaries, and mandated office returns. Then there are rising recruitment trends like AI and temporary talents that have made things more complex.

Organizations must handle challenges such as skill shortages, evolving job market dynamics, and the imperative to enhance employee engagement. The key lies in proactive planning. 

In preparing for the challenges and opportunities ahead in 2025, embrace proactive strategies to enhance your recruitment efforts and workforce engagement. Stay informed, adapt to new technologies, and prioritize employee development to stay competitive. Are you ready to optimize your recruitment strategy for success? Start planning today! 

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FAQs

  1. What jobs will we see becoming popular in 2025?

Mostly jobs in data analysis, cybersecurity and software development. We already know that AI will be in high demand. Project managers are also getting attraction.

  1. Will resumes still matter in 2025?

Not really, no. Companies are moving more toward skill tests, work samples and practice test, etc.

  1. How can small businesses keep up with hiring trends in 2025? 

They can do a lot of things, but let’s start with more flexibility. They can use low-cost tools to test skills and maintain a strong online presence. This will help them attract good candidates.