Hiring trends for 2025: Challenges and opportunities for employers

Last year, we called some of the top hiring trends in 2024, including replacing resumes with skills-based hiring, focusing on internal mobility, and embracing virtual hiring. 

So, what does next year hold for hiring teams and employers? 

Discover our 7 predictions for 2025 and expert tips for staying ahead and standing out as an employer.

1. Embracing the continuing rise of AI (with caution)

AI was the word on everyone’s lips in 2024, and it looks to continue in 2025, especially regarding hiring. According to a recent IBM survey involving thousands of global IT workers, 19% of organizations that use AI already use it for HR and talent acquisition purposes. 

In 2025, we expect to see this rise sharply. With the potential to streamline hiring processes – especially in the context of increased job applications – incorporating AI can help free up your hiring team’s time to focus on the more human aspects of the process. 

However, the prevalence of AI and machine learning technologies in the workplace raises concerns. It has the potential to reinforce and worsen hiring bias. Some candidates are also reluctant to engage in AI-driven hiring processes, especially ones where AI is involved in decision-making. 

In a Pew Research Center survey involving 11,004 respondents, 71% oppose AI’s use in final hiring decisions, while 66% wouldn’t apply to work for an employer that used AI to help make hiring decisions. 

Expert tips for hiring teams

So, what’s the best way to approach AI in recruitment? Our advice: Use it strategically. 

For example, due to the risk of bias and errors, you should avoid using AI in interviews, and final hiring decisions should always be left to humans. 

Instead, consider other ways to use AI to enhance the recruitment experience for your hiring team and candidates. You might use it to:

• Communicate with candidates and keep them updated throughout the process. 

• Collate and analyze data for people or talent analytics that offer insights into the effectiveness of your hiring process. 

• Analyze and match skills. 

Regardless of how you use AI, ensure it complements a hiring process that prioritizes people. You should:

• Provide your HR team with training on using AI properly, including how to spot bias. 

• Align it with your broader hiring strategy and organizational goals. 

• Be transparent with candidates about how you use AI in the hiring process, so they can decide whether to proceed. As Lucas Botzen, founder of global HR platform Rivermate, says, “The more AI will be integrated into HR processes, the more transparency and ethical considerations should be woven in, especially regarding data privacy and bias mitigation.”

2. Passive candidates becoming a source of talent

With some candidate pools narrowing (more on this below), hirers will need to think out of the box when sourcing candidates in 2025. However, a challenge facing hiring teams is that many employees are happy where they are. One survey of 30,000 workers in 23 countries found that 73% of them intended to stay in their current roles. 

Enter passive candidates. 

Passive candidates are workers inside or outside your organization who aren’t actively seeking a new role but may be open to the right offer. These candidates represent a potentially huge talent pool. For its 2024 Job Seeker Nation report, Employ found that 52% of workers aren’t actively seeking another job, and 54% of those would consider applying for a new job if a recruiter asks. 

Expert tips for hiring teams

Recruiting passive candidates involves a proactive approach, as they’re not actively applying for jobs. The advantage is that it’s a focused process, targeting individuals with the right skills and experience.

To support internal passive candidates, offer your workforce the learning and development opportunities they need. Start by conducting a skills gap analysis, which identifies gaps between the skills your workforce has and the skills your organization needs. Or, ask employees about their training needs through learning and development questions in pulse surveys.

Existing employees can use the training opportunities you identify to acquire new skills that make them ideal candidates for future roles within the company. 

Additionally, employee referrals are a powerful tool for identifying external passive talent. If your organization doesn’t have a formal employee referral program, now’s a good time to consider one. 

Employer branding is another important puzzle piece when sourcing passive candidates. After you contact these individuals, the first thing they’ll do is research your organization, including asking others about their experiences there. 

Ways to build your employer brand include:

• Developing a strong company culture around your organization’s values. 

• Reviewing your employee value proposition (EVP) and identifying any areas for improvement. 

• Ensuring you have effective DEI strategies in place to support a diverse and inclusive workplace. 

• Being authentic and transparent in your communications with candidates and employees.

3. Hiring for talent over titles

With many employers adopting a skills-based approach to hiring in 2024, the trend is set to continue in 2025. 

Skills-first hiring strategies prioritize candidates’ capabilities over their formal qualifications or previous job titles. By focusing on applicants’ ability to do the job, employers can quickly identify top candidates and minimize the risk of bias entering the decision-making process. 

We asked Sean Smith, founder and CEO of Alpas Wellness, about the benefits of skills-based hiring for employers. According to Sean, one of the main benefits is that it “will grant you access to diverse talent pools with non-traditional educational backgrounds.”

Many employers have already started to embrace these benefits. For our 2024 State of Skills-Based Hiring report, we surveyed 1,019 employers and 1,100 employees. We found that 81% of employers are using some form of skills-based hiring, continuing an upward trend from 2022 (56%) and 2023 (73%). 

Our research also revealed that 95% of employers said skills-based hiring is the dominant recruitment method of the future, suggesting that the popularity of this approach will continue to grow in 2025.

What skills should you look for in 2025? 

According to Korn Ferry, employers will prioritize leadership, technical, communication, and problem-solving skills next year. 

There will also be a strong emphasis on soft skills. Our research highlights that 89% of employers see soft skills as increasingly important compared to five years ago. 

Additionally, in 2025, there will likely be a strong focus on hiring employees with the right technical skills to help organizations adapt to the rise of AI. Our research supports this, finding that 52% of employers are already hiring for AI-related skills. 

Expert tips for hiring teams

There’s no one right way to adopt a skills-based approach to hiring. Our research shows employers use different methods, including cognitive ability tests, role-specific tests, and work sample assignments. 

Multi-measure assessment tools are the best way to take a skills-first approach to hiring. These tools use a combination of cognitive, job-specific skills, personality, and culture add tests to give you a full picture of a candidate’s suitability for a role. They’re more effective screening tools than resumes because they offer deep insights into candidates – while reducing the risk of bias entering the decision-making process. 

Another good starting point is thinking about whether a job requires a degree and removing educational criteria from its job description if not. 

4. A new hiring checklist for candidates: Salary, flexible work, and professional development 

The Great Resignation may be over, but organizations must stay on top of candidate priorities to be competitive employers. 

For its 2024 Global Workplace Study, Morgan McKinley asked more than 3,400 employees what they value most when looking for a new role. Salary and benefits were a clear winner according to 42.42% of respondents. The second and third priorities were the option for fully remote or hybrid work (15.50%) and career growth and development opportunities (13.89%). 

Employees’ emphasis on salary and benefits means hiring teams must put forward competitive salary packages via pay-transparent job advertisements. 

Both employers and candidates benefit from pay transparency. In a Society for Human Resource Management (SHRM) survey of 1,386 HR professionals in the US:

• 70% of employers said pay transparency on job ads resulted in more applicants, with 66% saying it attracts higher-quality candidates. 

• 82% of workers are more likely to consider applying for a job with a salary range. 

You need to adopt this approach in 2025 to avoid losing top candidates to competitors.

Expert tips for hiring teams

Many employers – such as those in New York, California, and Minnesota – are legally required to include a salary range in job ads. Given the importance of salary to candidates, all employers should seriously consider doing the same, regardless of whether they’re legally required. 

In addition, address flexible work arrangements and professional development opportunities in your job descriptions to entice the best-skilled candidates to apply. 

5. Leading with purpose to attract and retain younger talent

Salary, flexible work, and professional development appeal broadly to candidates, but you must also consider your company culture when hiring younger workers. 

Deloitte’s 2024 Gen Z and Millennial Survey found that 86% of Gen Zs and 89% of Millennials say a sense of purpose at work is very or somewhat important to their job satisfaction and well-being. 

Additionally, 44% of Gen Zs and 40% of Millennials have turned down an employer who doesn’t align with their values. Authenticity, clearly defined values, and an emphasis on transparency are hugely important to these individuals. And when it comes to diversity, equity, and inclusion (DEI), they want to see meaningful action rather than diversity washing. 

As Sean Smith says, “Organizations that are forthcoming in communicating their social impact, sustainability or community engagement stand out from the noise and attract talent that fall within these aligned values.”

Expert tips for hiring teams

Ensure your company has a clearly defined mission and goals communicated to candidates during the hiring process. Many companies link to a webpage from their job advertisements that sets out the company's values, DEI strategies, and practical examples of their commitments to social responsibility or sustainability initiatives. 

6. Mastering the balancing act of hybrid work

During the pandemic, many people became used to working entirely from home. This year, however, more and more employers – including giants like Amazon – are asking employees to return to the office full-time. 

Many employees have railed against these return-to-office mandates – for good reason. Writing for MIT Sloan Management Review, Brian Elliott says, “Mandates don’t improve financial performance. Instead, they damage employee engagement and increase attrition, especially among high-performing employees and particularly those with caregiving responsibilities.”

Based on this, we expect 2025 to bring a compromise: Hybrid work, allowing employees to work both in the office and from home. 

We’ve already seen the start of this shift in 2024. In a recent Owl Labs survey of 2,000 US workers, 27% of employees work in a hybrid format, with three office days per week and two at home being the most popular split. 

Employers who fail to include some flexibility (where it makes sense)  in work arrangements will miss out on talented candidates. According to Owl Labs, 38% of employees said they would turn down a job offer if it required them to work from the office full-time.

Expert tips for hiring teams

If your company adopts a hybrid work policy, certain steps can help ensure it supports business outcomes. A McKinsey study of top-performing fully remote technology organizations highlights six strategies:

1. Set clear expectations and guidelines around work practices, including meetings and communication. 

2. Apply consistent employee performance across on-site, remote, and hybrid workers.

3. Ensure complete transparency with a single source of truth for the organization, such as an employee handbook. 

4. Encourage intentional decisions about where employees work, considering when in-person working is better suited than remote work and vice-versa. 

5. Build an inclusive culture based on trust and support.

6. Track hybrid work outcomes and adjust policies as needed. 

In addition, assess how remote-work-friendly your existing hiring practices are. Are they designed to attract candidates interested in hybrid working arrangements? For example, consider offering candidates the option of digital interviews rather than requiring them to do it in person.

7. Preparing for change

In light of the US election, 2025 will likely require employers to adapt to significant changes – generally and specifically – regarding hiring. 

Firstly, President Trump flagged various changes to employment law during his campaign, such as no tax on tips. It will be crucial to stay on top of these developments so you can give candidates the correct information in job ads and throughout the hiring process. 

Secondly, while we won’t know the exact details of any policies until next year, President Trump’s team has foreshadowed changes to work visas that may restrict talent pools. 

Jorge Lopez, chair of Littler Mendelson’s immigration and global mobility practice, told HR Dive, “We do expect that… there will be basically a closing of the border almost immediately [which is] likely to affect industries like construction, hospitality, and manufacturing.” 

The federal government may also become a source of candidates for the private sector. With a promised revision of government spending and subsequent cuts, we may see more federal government employees with many transferable skills moving to the private sector. 

The new administration has also signaled the end of DEI in federal government agencies. These sentiments could impact private sector employers and their policies, for example, if the Equal Employment Opportunity Commission (EEOC) changes its priorities or applies its policies more narrowly. 

Whether this leads to a broader cultural shift in the private sector remains to be seen. At TestGorilla, we believe employers should stay actively committed to DEI principles, including intentional inclusion. 

Expert tips for hiring teams

Consider alternative candidate sources if your business relies heavily on foreign workers. Also, ensure compliance is a priority and that someone (internal or external to your organization) keeps an eye on developments and advises your hiring team as they arise. 

Future-proofing your business

2025 may challenge employers with a changing employment landscape and talent pools, but it may present big opportunities, too. 

Consider how you can incorporate AI in hiring processes, engage passive candidates, and adopt a skills-based approach to hiring. These strategies work best with a strong foundation: pay transparency, flexible work arrangements, professional development opportunities, and a culture of inclusion and purpose. 

Together, they can help you access larger pools of candidates with the skills you need to future-proof your business in 2025 – and beyond.