2025 Labor Market Predictions – A Recruiter’s Perspective
As recruiters, we have the privilege of talking with hundreds of business leaders and thousands of job seekers each year. Leveraging what I've learned from conversations over the past several weeks, economic reports, trending topics on social media, and patterns in labor market data, I've developed three predictions and three strategies for employers heading into 2025.
Three 2025 Labor Market Predictions
The labor market is going to heat up again. Hiring was a little more favorable this year for employers, although it was very much a job seekers market. In 2021, the Department of Labor reported two open jobs for every one unemployed American looking for work. The most recent update from October showed that there were .9 unemployed job seekers for every one open job. Based on how the winds are blowing, 2025 looks to be a strong year for job creation and another year of low unemployment. The hiring game will likely be more competitive next year than it is right now.
Employers will be creative. 2021-2022 was a season of learning. Many businesses overpaid for underqualified workers. Some also added lucrative but unaffordable benefits. When the economy leveled off, they struggled with profitability due to overpaid, overstaffed, and underperforming departments. Employers will be a little more measured in their hiring approach this time. They will be cautious about what they commit to and who they hire while looking for ways to outshine other employers by becoming a preferred workplace. They may opt for slower growth with better-qualified employees than rapid growth with "warm bodies."
Developing existing employees will be a top priority. If the first assertion is correct and hiring will get very competitive again, developing talent from within will become an increasingly high priority. Whether it's training for technical skills or communication abilities, businesses will become schools. The winning schools will be the ones whose supervisors are excellent teachers able to take new students and advance them quickly through the curriculum.
3 Strategies for Successful Hiring
If these predictions are correct, what can be done?
Hire now. January is often a busy month for hiring. If you can start the search for new teammates now, don't wait. December tends to see fewer job ads than January, meaning you will have less competition from other employers. If you need to wait until January, prep everything in December to get a fast start on January 2. If you are a Team Builder client, now's a great time to talk to your recruiter about starting a search or prepping your ads for next year.
Strategize. Be able to answer this question: Why would someone want to work for me? Competitive wages and benefits are essential to win in the hiring game. No matter how good your company culture is, you won't get an employee with a $35/hour skillset to join your team at $25/hour. But maybe if you offer some creative options like four 10-hour days with Fridays off or hybrid remote options like 3 days in the office and 2 days from home or valuable on-the-job skills training that is clearly defined and tied to raises, you could have a fighting chance even if you don't have top tier pay and benefits.
Invest in your front-line leaders. Your team leads, foremen, supervisors, managers, and those with the potential to step into those roles should be fed a steady diet of good books, coaching, leadership seminars, skills training, etc. If you want strong leaders, invest in their professional development. You will need high-performing leaders to build high-performing teams.
We love talking with business leaders and helping you strategize about how to build your team. If you want to brainstorm about your plans for next year, send me an email at kristen@teambuilderrecruiting.com or give me a call at 717-455-3822. We are pre-writing job ads for positions scheduled to open in 2025. Working ahead is ideal for employers who are prepping for Q1 hiring and want to reserve a start date for their search.