The job market is always changing, bringing new recruitment trends each year. It can be tough to keep up, but knowing what’s happening is key to improving your hiring plans.

Each year, recruitment faces many challenges: budget cuts, economic stress, changing interest rates, and job market shifts. These factors affect recruitment agencies everywhere. How will leaders in recruitment handle the uncertainties of 2025? What new opportunities might emerge?

We’ll look back at recent trends in hiring, such as talent acquisition changes and preferences for remote or hybrid work. Then, we’ll explore what’s expected in 2025.

Key Changes in the Recruitment Market in 2025

The job market saw many ups and downs last year. After reaching record-high job openings in mid-2024, the market quickly reversed its recovery trend.

Due to lower-than-expected economic growth, many companies began large-scale layoffs. The tech industry alone lost over 240,000 jobs in 2023, which is 50% more than in 2022.

Overall, fewer companies were hiring and fewer people were applying for jobs in 2024 compared to the previous year. LinkedIn’s State of the Labor Market report showed a continued global decline in hiring.

Despite more tech talent becoming available, employers still faced a shortage of skills. Worldwide, 70% of tech leaders reported a high demand for skills like “cybersecurity expertise,” “big data analytics,” and “software architecture.”

In fact, 62% of CIOs believe they will never have enough tech talent to meet the modern market’s needs for speed, innovation, and cost efficiency.

Candidates with strong soft skills are also scarce. As technology takes over routine tasks, skills like problem-solving, cognitive reasoning, and creative thinking are highly valued. However, many companies lack these skills in their talent pools.

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 2025, a third of US employees quit due to value misalignment with their employers. A third of UK employees resigned due to poor management.

For companies rolling back remote work policies, higher turnover is expected. In 2023, hybrid work became the norm, with most Fortune 500 companies in the US offering flexible work arrangements. They typically required only two to three days in the office.

However, 9 in 10 companies planned to bring employees back to the office in 2024, at least partially. If employers push this, they risk losing more talent, as 72% of employees would accept a lower salary for a flexible work-from-home schedule.

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

Skill Hiring

As hiring costs and time increase, every new employee becomes important. Companies need to make their recruitment processes better. Hiring managers will now focus more on skills-based hiring and thoroughly check candidates on a larger scale.

Skills assessments are very important for 79% of HR professionals, sometimes even more important than traditional criteria. Additionally, 36% will move candidates with high test scores forward, even if they don’t have the required experience. A skills-based approach greatly expands the talent pool, making it 2.3 times larger. This method also brings in more diverse candidates. It includes 3 times more veterans and 3.5 times more women and Black students.

A big benefit of skills-based hiring is using data instead of intuition to make decisions. This approach lets managers pick candidates with the needed skills. Tools like Toggl Hire help confirm skills through various tests and assignments.

To do well with skills-based hiring, design custom assessments with expert-made questions. This will help you build a more skilled and diverse workforce in 2025.

For practical tips, start with a job task analysis to understand the needed skills. Focus on skills and qualifications rather than degrees or experience. Use pre-employment tests to quickly check skills, and combine different interview methods and assignments to find the right match. Avoid questions about candidates’ backgrounds to reduce bias. Ask behavioral and problem-solving questions to understand how candidates think and act. Combining structured interviews with tests will give you a complete view of a candidate’s skills and fit for the team.

Contract Workers

Since 2020, businesses have relied more on temporary, seasonal, and consultant workers to fill skill gaps, adapt to market changes, and stay competitive.

A study found that almost all Fortune 500 companies now use digital platforms to hire talent. About 30% heavily use these platforms for project-based hiring, another 30% moderately, and 50% plan to increase their use in the future.

By 2025, contingent labor could make up 35% to 40% of the global workforce. This means more work for recruiting teams, managing faster hiring, worker classification, and quick onboarding and offboarding.

To manage external workers well, outline the roles that contractors will fill. Plan which roles have temporary or changing demand, which are immediate, and which are long-term. Instead of job descriptions, focus on the tasks contractors will do.

For hiring in 2025, focus on getting the skills you need. Tell them about needs like insurance or licenses. Changing your hiring to fit contractors could mean faster hiring and easier access to skills.

Tips for Hiring Contractors 

  • Know how they work: Some want set projects, while others want hourly or daily pay. Make sure your payment system can do what they need
  • Use social media for hiring: Contractors like social sites more than job boards. Use LinkedIn and Twitter to meet independent workers
  • Offer good pay: Contractors pay their own taxes, so they might ask for more. Don’t pay less than needed; talk about work scope instead

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.

To hire the best talent today, adapt your recruiting methods. Instead of testing candidates on tasks AI can handle, evaluate their skills through practical assignments or soft skills assessments. Modern tools like Toggl Hire offer anti-cheating measures to ensure fair assessments.

Despite concerns about AI usage, hiring teams are finding ways to use it beneficially. Companies like Mastercard use AI games to assess skills. T-Mobile uses AI to remove biased language from job descriptions.

In 2025, AI’s role will likely expand further. This will aid in drafting job descriptions and  communicating with candidates. 

Advanced algorithms power new HR technology, simplifying many tasks. This includes interview scheduling, ad placement across job boards, and new hire onboarding. AI-driven chatbots enhance candidate communication and streamline recruitment marketing.

AI also speeds up document processing and enhances decision-making with predictive analytics. It helps analyze workforce trends. It improves diversity and inclusion efforts by identifying potential candidates.

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

Recruiter’s Market 

A shift towards a recruiter’s market is expected in the coming year, with competition for talent remaining high. In the US, the unemployment rate is projected to hold steady at around 4% in 2025. Similarly, in the EU, unemployment rates are forecast to remain stable at 6%.

Globally, nearly one-third of employees are likely to leave their jobs in the next year due to low pay and poor work-life balance. Significant layoffs are anticipated, especially in the tech sector. 

Nine out of ten employers anticipate reducing their workforce in 2025. This means a larger pool of potential candidates for recruiters but also increased workloads. Recruiters will spend more time sorting through numerous applications, screening for necessary skills, and scheduling interviews.

Without a strong talent acquisition strategy, there’s a risk of making poor hiring decisions. Skills assessments can help quickly identify the most suitable candidates among the initial influx of applicants.

Many job seekers lack essential hard and soft skills required for their desired positions. Demonstrating competence will be crucial in attracting top talent.

Implementing skill assessments can efficiently filter applicants. AI can automate secondary hiring processes like background checks and onboarding. It will reduce time-to-hire and boost efficiency.

Tips for Managing Your Candidate Pipeline 

  • Update job descriptions to reflect current skill requirements for vacant positions
  • Clearly outline non-negotiable criteria, such as remote work limitations or location-specific requirements
  • Utilize various pre-screening methods. Include resume checks, competency assessments, cognitive tests, and aptitude evaluations 
  • Conduct cultural fit interviews and job simulations to ensure candidates not only have the necessary skills but also fit well within your team

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 is a pressing issue, as we’ve seen shifts in workforce dynamics from the Great Resignation to quieter exits and layoffs. In 2025, HR professionals will prioritize evaluating and addressing this decline.

Factors like higher living costs, stagnant salaries, and mandated office returns have dampened workforce optimism. Emerging recruitment trends, such as relying more on temporary talent and AI, add to job security concerns.

To boost engagement:

  • Collect feedback at all levels
  • Survey managers on happiness, motivation, recognition, and team morale
  • Gather anonymous input from lower-level employees on managerial support, feedback timeliness, and opportunities for innovation
  • Compare feedback to pinpoint gaps and overlaps, guiding targeted improvements

Practical Tips 

  • Develop managerial skills. Train managers to lead effectively, reduce micro-management, and enhance empowerment and recognition
  • Support employee ideas. Establish a clear process for gathering and evaluating. Act on employee suggestions to demonstrate responsiveness
  • Prioritize internal hiring. Advertise roles internally and use skill assessments to identify suitable candidates, promoting career growth

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 are the most in-demand roles in 2025? 

In 2025, roles in data analysis, cybersecurity, software development, and AI will be in high demand. Project managers and digital marketers also remain essential.

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

Small businesses can focus on flexible hiring, use affordable skills testing tools, and build strong employer branding through social media.

  1. Will traditional resumes still be useful in 2025? 

Resumes are becoming less important. Many companies are now focusing on skills assessments, portfolios, and job simulations instead.

  1. What tools should recruiters use to manage large applicant volumes? 

Recruiters should use applicant tracking systems (ATS), AI-based screening tools, and automated scheduling software to handle high volumes efficiently.

  1. How can companies maintain a strong employer brand in 2025? 

Being transparent, offering flexible work, investing in employee development, and highlighting a positive culture on digital platforms help build a trusted brand.