The 2025 Hiring Reality Check: Data-Driven Answers to TA Leaders’ Top Questions

By Lee Flanagan

26th Aug. 2025 Last updated: 27th Aug. 2025

Leadership

Why is hiring still hard in 2025?

Takeaway: Even with a cooling economy, hiring remains challenging due to persistent skill shortages. Globally, 76% of employers report difficulty filling roles in 2025, only a slight improvement from a record 80% last year [ManpowerGroup, 2025]. In other words, three out of four companies are struggling to find the skills they need – a near-record talent gap. The fact that this figure dropped for the first time in a decade is notable, but the change is marginal, indicating the skills mismatch is far from solved.

Why so hard? Skills mismatch is the core issue. The rapid evolution of job requirements (especially in tech and digital roles) means available workers often don’t match what roles demand. A World Economic Forum study confirms that 63% of employers cite the skills gap as their top barrier to transformation. Demographic shifts (aging workforces in many regions) and fewer working-age candidates post-pandemic add pressure. In Europe, for example, the job vacancy rate remains elevated at 2.2% (EU-wide in Q1 2025), down from 2.6% a year prior. That slight dip suggests a bit of easing, but unfilled jobs are still well above pre-pandemic norms in many countries. The bottom line: the world is not short on jobs – it’s short on qualified people for those jobs.

Companies also feel the pinch in specialized areas. ManpowerGroup’s survey notes the “peak” of the skills gap may be passing, but it’s still near historic highs. Certain sectors (e.g. tech, healthcare, engineering) face acute shortages of experienced talent. Employers have reacted by investing in upskilling and widening candidate pools (hiring for potential and training on the job), but these are longer-term plays. In the meantime, the talent shortage keeps hiring hard in 2025 – even if demand cools slightly, there’s still fierce competition for people with in-demand skills.

What should you do? Double down on strategies to bridge the gap: boost upskilling programs, consider candidates with adjacent skills, and build talent pipelines proactively. Embrace a “hire for aptitude, train for skill” mentality. Leverage market data to identify new talent pools. The slight easing in the shortage is a chance to get ahead – not a reason to relax.

Is hiring activity slowing down in 2025?

Takeaway: Hiring has slowed from last year’s pace but hasn’t collapsed – we see a gentle deceleration in 2025. In the U.S., employers added roughly 575,000 jobs in the first four months of 2025, which is about 30,000 fewer jobs per month compared to early 2024 [Glynn, 2025]. The unemployment rate in the U.S. nudged up to 4.2% (April 2025) from the mid-3% range of 2022, reflecting a bit more slack in the labor market. Europe shows a similar trend: the EU unemployment rate was 5.7% in Q1 2025, up from 5.6% in late 2024. Job vacancy postings in the euro area have ticked down as well (2.4% of jobs were vacant in Q1, vs. 2.9% a year prior).

In plainer terms, the hiring frenzy of the past two years is cooling. High inflation and aggressive interest rate hikes in 2023/24 have tempered economic growth, and companies have become more cautious in their workforce planning. Notably, U.S. GDP even dipped slightly (-0.3% in Q1 2025), the first decline in a few years, and consumer confidence hit its lowest point since 2020 – signals that a period of more modest hiring is here. Many businesses are pausing on backfilling non-essential roles or adding new headcount until there’s more certainty.

However, “slower” hiring is still happening. Unemployment remains historically low in many regions (4–6% range in the U.S. and Europe) and certain industries are outright talent-starved (e.g. healthcare in the U.S. added 51,000 jobs in April alone). Wage growth, which soared in 2022’s tight labor market, is normalizing but still positive – U.S. wages were up 3.8% year-on-year in April (the slowest growth since 2021, now closer to inflation). This suggests employers are no longer in a bidding war for every hire, but they’re still offering raises to attract and retain the right people.

For TA leaders, the takeaway is to stay agile. It’s not the hiring freeze of a recession, but you may have fewer reqs than last year or longer time to fill certain roles. Use this breather to refine processes: improve candidate experience, build those talent communities, and partner with finance on workforce plans. If a mild “hiring recession” is on the horizon (as some analysts warn), strategic clarity on which roles truly drive value will be crucial.

What’s changed in recruiter sentiment this year?

Takeaway: Talent Acquisition teams are feeling a bit less stressed than a year ago – and cautiously optimistic – but burnout is still a concern. Recent data shows a slight improvement in recruiter sentiment. Just over half of recruiters (54%) said their job became more stressful in 2024 compared to the year prior, down from 65% who reported rising stress in 2022 [Employ Inc., 2024]. In other words, the all-out frenzy of 2021–2022 (when hiring went into overdrive) has eased. Recruiters aren’t juggling quite as impossibly high a requisition load as then, and their top challenges (like massive req volumes and frantic hiring manager demands) have stabilized for many. In fact, 51% of TA professionals expect hiring will be challenging in the next 12 months – still half the industry, but this is a decrease of 10 percentage points from two years ago, indicating some pressure release.

Crucially, morale and outlook have improved. A whopping 92% of TA decision-makers say they’re optimistic about the future of recruiting [Employ Inc., 2024]. That optimism stems from having survived a tumultuous few years and gained confidence in new strategies (like virtual recruiting, new technology, and flexible work policies) that can make hiring more efficient. Recruiters have proven their resilience and are looking ahead with a sense that they can handle what’s coming.

That said, the job is far from easy. Over half of recruiters still saw increased stress last year, which means many are dealing with burnout symptoms. Top stressors include having to do more with leaner teams (some TA functions faced budget cuts in late 2023), grappling with ever-shifting hiring targets, and adapting to new tools (hello, AI) on the fly. There’s also a mental whiplash in some organizations – one minute a hiring freeze, next minute a hiring surge – which keeps recruiters on their toes.

What should you do? As a TA leader, it’s vital to keep an eye on your team’s bandwidth and well-being. The slight reduction in stress means you may have an opening to invest in training and development for your recruiters (to sharpen skills in sourcing, marketing, diversity recruiting – perhaps using resources like a Recruiter Library for upskilling). Ensure goals are realistic and celebrate wins to maintain that optimism. Recruiter turnover is costly; keeping your team motivated and supported is a strategic win for 2025.

How are companies using AI to hire in 2025?

Takeaway: AI has become nearly ubiquitous in recruitment, but it’s augmenting rather than replacing recruiters. In a late-2024 survey of hiring managers, an astonishing 99% reported using AI in some part of the hiring process [Insight Global, 2025]. Put simply, almost everyone in TA is now experimenting with AI tools – from resume screening algorithms to AI-powered chatbots that answer candidate FAQs. And it’s not just experimentation: 98% of those using AI said it significantly improved hiring efficiency (e.g. automating interview scheduling, faster resume review). These efficiency gains matter when TA teams are stretched; automating rote tasks frees up recruiters for high-touch work.

Globally, the trend is the same. A BCG study of CHROs found that if a company is trying out AI, 70% of the time it’s happening in HR – with talent acquisition as the top use case [BCG, 2025]. In fact, 92% of organizations report they’re already seeing benefits from AI in HR, and over 10% have realized massive productivity gains (30%+ improvements) [BCG, 2025]. These are big numbers, reflecting things like AI “sourcers” scanning profiles to build candidate pipelines, or generative AI crafting job descriptions and outreach emails in seconds.

But AI isn’t a magic hiring robot – humans remain critical. Notably, 93% of hiring managers in that survey emphasized the importance of human judgment in the hiring process despite widespread AI use [Insight Global, 2025]. Recruiters are using AI as a copilot: it crunches data and handles repetitive tasks, while humans build relationships and make the nuanced decisions. There’s also a growing awareness of AI’s limits. For instance, 66% of hiring managers believe AI can help remove bias from interviewing, yet many are cautious – 54% said they would be concerned if a candidate’s resume was obviously written by AI. We’re navigating a bit of a double standard: hiring teams want the productivity boost from AI, but worry about candidates using it to “cheat.” This underscores that AI adoption is in a maturing phase, where norms and ethics are catching up with tech capabilities.

In practice, 2025’s AI in hiring is about smarter, faster processes: automated interview scheduling, AI assessments or coding tests, video interview analytics (so-called “interview intelligence”), and AI-driven sourcing that finds passive talent. It’s also about enhanced decision support – think predictive models that flag which applicants might be a fit based on past hiring data. Companies that embraced these tools early are now refining how to blend AI with the human touch. Those late to the game are racing to implement at least baseline automation to stay competitive.

What should you do? If you haven’t already, identify parts of your hiring workflow that drag (reviewing hundreds of resumes, coordinating interviews) and pilot an AI tool there. But do so thoughtfully: involve your recruiters in selecting and testing the tools – their buy-in is key. Ensure transparency (know what the AI is evaluating to avoid hidden biases). And crucially, invest in upskilling your team to work alongside AI. For example, train recruiters on crafting effective AI prompts for candidate outreach or leverage an Interview Intelligence platform to coach interviewers with AI-driven feedback. The goal is a “human + AI” synergy: let the machines do the heavy lifting on data and admin, while your people focus on engaging candidates and closing offers. Those who get this balance right will see the biggest gains in 2025.

Are TA teams investing in new tech in 2025?

Takeaway: Despite economic clouds, many TA leaders are securing budget to upgrade their tech stack – with a focus on analytics and automation. According to one recruiter survey, 64% of organizations expect to increase their recruiting budgets in the next 6–12 months [Employ Inc., 2024]. Importantly, within that group, 64% plan to invest specifically in new recruiting technology (such as applicant tracking systems, CRM tools, or AI-driven platforms). In short, about two-thirds of TA leaders who are getting more budget are channeling it toward tech enhancements. The driver here is clear: pressures to do more with less. If hiring volumes are a bit down but complexity remains, technology is seen as the force multiplier to maintain productivity.

Key areas of investment include advanced analytics and talent intelligence. A striking 84% of TA teams say they’re now leveraging analytics to understand their hiring funnel and workforce needs. However – tellingly – 87% also admit they still export data to spreadsheets for tracking, meaning there’s room to adopt more modern, integrated analytics tools. Executive dashboards for recruiting KPIs, AI tools that predict hiring bottlenecks, and labor market intelligence platforms are on many wish lists. Another hot area is interview technology: for instance, platforms that record and transcribe interviews, then analyze content to help assess candidates (or to coach interviewers).

Automation is the other big theme. From candidate rediscovery tools that automatically surface past applicants, to CRM systems that nurture leads with personalized campaigns, TA teams want to automate repetitive tasks. There’s also sustained investment in candidate experience tech – think chatbot assistants, self-scheduling tools, and text-based engagement – to keep applicants engaged without heavy manual effort. Notably, many companies that hired rapidly in 2021-2022 are now streamlining their bloated tech stacks. Rather than sheer quantity of tools, 2025 is about integration and optimization: making sure ATS, assessment platforms, background check systems, etc., all talk to each other and provide a seamless experience.

Budget-wise, outside data backs up this continued investment trend. A recent WorldatWork report noted that salary increase budgets for 2025 are holding steady (around 3.8% in the U.S.), but spending on HR tech and talent acquisition is viewed as essential rather than discretionary. Many CFOs have given the green light to TA tech projects even while trimming other expenses, on the promise of efficiency gains and better data security/compliance in hiring.

What should you do? If you have budget to spend, prioritize tech that solves your biggest pain points. For example, if diversity hiring is stalled, an investment in unbiased screening or talent network expansion tools might be worthwhile. If recruiters are drowning in admin, look at workflow automation. Build a strong business case: quantify how a given technology will reduce time-to-fill or improve quality-of-hire. And ensure any new tool integrates with your current systems – a fancy point solution that sits siloed can create more work. Lastly, don’t forget user adoption: provide training (perhaps via an Interviewer Library for hiring managers or a training module for recruiters) so that your team actually uses the tools to their full potential.

Is DEI progress stalling in 2025?

Takeaway: There’s a noticeable pullback on corporate DEI initiatives in 2025, although many organizations are holding firm or even increasing their efforts. The landscape is mixed. On one hand, a recent survey of 1,000 companies found 1 in 8 companies are scaling back or eliminating DEI programs this year [Resume.org, 2025]. Specifically, 5% have scrapped their DEI department or programs entirely, and another 8% have slashed DEI budgets. These rollbacks aren’t just headline anecdotes – they’re happening across multiple industries. High-profile examples in early 2025 include companies like Target (ceasing diversity metric tracking) and Disney (phasing out certain DEI initiatives), often under political or shareholder pressure.

Why the retreat? The survey above indicates the top reason is shifting political climate, cited by 49% of companies curtailing DEI [Resume.org, 2025]. In some regions, there’s been political pushback against diversity programs, making companies skittish. Other reasons include economic pressure (37% said budget constraints are forcing tough choices) and lack of clear ROI (36% felt DEI efforts weren’t yielding measurable impact). Moreover, over half of managers in those firms believed their past DEI efforts were mainly for “PR purposes” – a cynical view that has grown more vocal. In short, some executives are questioning if DEI is a “nice-to-have” that can be trimmed when times get tough.

On the other hand, it’s not all backtracking. The majority – 65% – of companies surveyed are holding their DEI budgets steady into 2025, and 22% are actually increasing funding for DEI [Resume.org, 2025]. Many organizations remain deeply committed, recognizing that diverse teams drive innovation and that inclusive cultures aid retention. Notably, global firms like Apple and JPMorgan publicly reaffirmed their diversity goals in 2025, pushing back on pressure to dilute their commitments. So we see a widening gap: some companies doubling down on DEI as a long-term strategy, and others hitting pause or reverse.

What about outcomes and employee sentiment? Here, too, we see some stagnation. In the US, about 52% of workers now say focusing on DEI at work is a good thing – down from 56% last year [Minkin, 2024]. That drop, reported in a late 2024 Pew survey, suggests growing ambivalence or fatigue around workplace diversity efforts. The share of workers who view DEI efforts negatively ticked up as well (21%, up from 16%). This shift was most pronounced among certain groups – for instance, more male and Republican-affiliated workers have grown skeptical of DEI, per the study. While a solid majority still supports DEI in principle, the slight decline in support underscores that enthusiasm has cooled from the post-2020 peak. We’re likely seeing the impact of politicization of DEI and perhaps disappointment in lack of tangible change.

What should you do? In this climate, TA leaders should stay the course on DEI as a business imperative, while being prepared to show impact. If your company is committed, double down on what works: e.g. continue diversity recruiting programs, but tie them to clear outcomes (like improved retention or customer insights from diverse teams). If facing budget scrutiny, fold DEI into overall talent strategy rather than a standalone line item – emphasize that inclusive hiring improves quality-of-hire and employer brand, rather than treating it as a “charity” effort. Also, focus on education and communication: ensure employees understand the why of DEI. This might involve training interviewers to mitigate bias (consider offering an Interviewer Library of bite-sized training content to all hiring managers) and creating forums for employees to share how inclusion (or lack thereof) affects performance. In short, meaningful progress might be slower in 2025, but maintaining momentum on DEI is critical to long-term talent success and risk management.

What are candidates’ compensation expectations in 2025?

Takeaway: Employees and job seekers in 2025 expect higher pay – albeit their expectations are a bit more modest than last year – and many will jump ship to get it. Several surveys highlight that compensation is the #1 driver of job moves right now. In one January poll of professional workers, 71% said they plan to look for a new job in 2025, and 76% of those cite the quest for higher pay as a primary motive [Bartech/WorldatWork, 2025]. Another survey by Monster echoed this trend, with 93% of workers open to new opportunities and nearly half (48%) expecting a salary increase to counter inflation [Monster, 2025]. Simply put, people believe they deserve (and can get) more money, given the cost of living and still-tight labor market in many fields.

That said, there are signs candidates know the red-hot wage growth of 2022 has cooled. The Monster survey noted those expectation metrics (48% due to inflation, etc.) are actually a bit lower than the prior year, suggesting workers realize employers are holding firmer on salaries now. In 2024, inflation was running high and many workers saw 5%+ raises; by 2025 inflation has eased and companies are budgeting roughly 3.5–4% for raises on average. So while employees want more, they aren’t entirely unrealistic – but they will still negotiate hard or switch jobs to get the best deal.

And indeed, switching jobs has paid off. Recent data shows that in late 2024, 73% of workers who left their job for a new one ended up with higher pay in the new role [Toner, 2025]. Employers, in turn, are using counteroffers and bonuses to try to retain talent: about 31% of people who resigned got a counteroffer from their old employer to entice them to stay, and 43% of new hires received a sign-on bonus in Q4 2024 – a huge jump from the 12% who got sign-on bonuses earlier in the year [Toner, 2025]. These figures underline that many companies are willing to boost compensation selectively for key hires and high performers, even if across-the-board raises are modest. Workers have noticed this and may factor it into their expectations (for example, expecting a sign-on bonus or extra perks when they change jobs).

Another facet of “compensation expectations” in 2025 is pay transparency. Candidates increasingly expect salary info upfront. By one analysis, over 40% of US job postings now include salary ranges, more than double the share that did in 2020 [Indeed Hiring Lab, 2023]. With new pay transparency laws in places like California, New York, and parts of Europe, candidates can often see the compensation on offer before they even apply – and they are using that knowledge to demand fair market rates. This transparency trend means lowball offers are more likely to be dismissed, and companies with below-market pay will struggle to attract applicants. It’s a positive development for trust: employees feel more confident asking for what they know others are getting.

What should you do? First, embrace transparency and openness about pay. Ensure your salary ranges are up to date and grounded in market data (candidates will know if you’re behind). Train your recruiters to have frank, data-backed comp conversations. Second, get creative beyond base salary: consider sign-on bonuses, retention bonuses, and clearly communicated paths to promotions/raises – these can help meet candidate expectations without breaking fixed salary structures. Third, manage internal equity carefully as you negotiate with new hires; nothing demoralizes staff faster than discovering a newcomer makes much more. Finally, partner with finance to monitor inflation and local market trends quarterly – if costs of living spike again, be ready to adjust pay bands. In 2025, compensation strategy must be dynamic: it’s about meeting employees’ fair expectations to attract/keep talent while balancing the budget. Those who get it right will see higher engagement and lower attrition in their teams.

Checklist: Talent Acquisition Actions for 2025

Ready to turn these insights into action? Here’s a quick checklist for TA leaders to drive strategic clarity and real results in 2025:

Bolster your talent pipeline now: Proactively build pools of candidates for critical roles before you need to hire. Engage silver-medalist candidates and look at internal talent for reskilling. This mitigates the skills mismatch and shortens time-to-fill.
Double down on upskilling: Invest in developing your recruiters and hiring managers. Leverage resources like SocialTalent’s Recruiter Library for ongoing recruiter training and an Interviewer Library to coach managers in inclusive, effective interviewing. An educated team will handle hiring challenges with more ease.
Leverage AI – but keep the human touch: Identify one or two hiring steps to automate (screening, interview scheduling, etc.) with AI or bots to free up recruiter time. At the same time, assign human “owners” for candidate experience. Use AI as a helper (e.g. sourcing or providing interview insights via an Interview Intelligence tool) while humans make the final calls.
Refine your EVP and compensation plans: Make sure your Employee Value Proposition speaks to 2025 realities – emphasize career growth, stability, and fair pay. Review compensation ranges mid-year against market data. If you can’t hit every number, highlight other rewards (flexibility, remote work options, bonuses, meaningful work) to close the gap.
Stay committed to DEI basics: Even if grand DEI programs are scaled back, continue core inclusive hiring practices. Diverse interview panels, structured interviews, outreach to underrepresented groups – these should remain standard. Demonstrate to leadership how inclusive hiring improves quality-of-hire and innovation, keeping DEI as a “must-have” in your strategy.
Monitor team workload and wellness: Avoid recruiter burnout by balancing requisitions and hiring support (could you bring in contract sourcers for peak times?). Encourage use of PTO, and create forums for recruiters to share challenges and tips. A supported TA team will be more productive and give candidates a better experience.
Measure and share success metrics: In a year of uncertainty, data wins arguments. Track key metrics (time-to-fill, cost-per-hire, quality-of-hire, diversity of slates, etc.) and report them upwards. Show how the TA function is meeting the moment – e.g. “we’ve maintained time-to-fill at 45 days, 5 days faster than industry benchmark” or “our new AI sourcing tool cut screening time by 30%.” Use these wins to justify continued investment.

By checking off these actions, TA leaders can navigate 2025’s challenges with agility and purpose. The labor market will keep evolving – but with strategic focus and the right tools (and team), you’ll turn these headwinds into opportunities to hire even better. Here’s to smart hiring and sustainable talent growth in 2025!

References (Q1–Q2 2025 Data & Reports):

[ManpowerGroup, 2025] ManpowerGroup (2025). 2025 Talent Shortage Survey – 76% of employers report talent shortages, down from 80% in 2024.
[Glynn, 2025] Patrick Glynn (2025). April 2025 Jobs Report: Hiring Holds Steady with Strong Report, Insight Global News – U.S. added 177k jobs in April; unemployment 4.2%; 575k jobs added Jan–Apr 2025.
[Eurostat, 2025] Eurostat (June 2025). Job Vacancy Statistics, Q1 2025 – EU job vacancy rate 2.2% in Q1 2025 vs 2.6% in Q1 2024 (euro area 2.4% vs 2.9%).
[Employ Inc., 2024] Employ Inc. (Jan 2025). 2024 Recruiter Nation Report – 54% of recruiters found 2024 more stressful (down from 65% in 2022); 51% expect hiring to be challenging (down 10% vs 2022); 92% are optimistic about recruiting’s future.
[Insight Global, 2025] Insight Global (2025). AI in Hiring Survey Report – 99% of U.S. hiring managers use AI in hiring; 98% saw efficiency gains; 93% emphasize human importance alongside AI.
[BCG, 2025] Boston Consulting Group (2025). How AI Is Changing Recruitment – 70% of companies experimenting with GenAI do so in HR (talent acquisition #1 use case); 92% of firms see benefits from AI in HR, with 10% reporting 30%+ productivity boosts.
[Resume.org, 2025] Resume.org (2025). DEI in 2025 Survey – “1 in 8” companies cutting back DEI in 2025 (5% eliminated programs, 8% cut budgets; 65% unchanged, 22% increased). Top reason: 49% cite political climate; also economic pressure (37%).
[Minkin, 2024] Rachel Minkin (Nov 2024). Pew Research: Views of DEI Become More Negative – 52% of U.S. workers say DEI efforts are good (down from 56% in 2023); 21% say bad (was 16%).
[Toner, 2025] Mark Toner (Mar 2025). “Workers Seeking Greener Pastures” – WorldatWork/Workspan Daily – 71% of surveyed workers plan to job hunt in 2025; 76% seek higher pay. 48% expect higher salary due to inflation, down from 2024. 73% of Q4 2024 job switchers got higher pay; 43% received sign-on bonuses (up 3.5x QoQ).
[Indeed Hiring Lab, 2023] Indeed Hiring Lab (Dec 2023). Pay Transparency Trends – Over 40% of US job postings included employer-provided pay ranges, more than double the share in 2020.