While multiple economic factors can affect hiring in 2025, hiring managers do have some indications about where possible wins and challenges will be. A cooled labor market may make good talent easier to find and retain, but a still-aging labor pool increasingly ready to retire — combined with reductions in immigration — may signal speed bumps ahead, experts told HR Dive.
The labor race has cooled off
The search for talent isn’t over, but it’s not as difficult as it was in 2022, said Allison Shrivastava, economist at Indeed. As of November 2024, the Indeed Job Posting Index was down 10% over the year, though still 10% above pre-pandemic levels. That’s good news for hiring managers.
“If you’re hiring, it’s probably good news for you because you have more candidates to choose from than you did in 2022. If you’re looking for a job, it may take longer,” she said.
But that may not be the case across all business sectors. According to the Federal Reserve, nearly 75% of all jobs added in 2024 were in healthcare and social assistance, government and leisure and hospitality. This could become a problem for job seeker and hirer balance if growth is hampered in these areas, as Indeed has found some indications of happening, Shrivastava said.
There’s also a potential mismatch between workers who want to be remote and companies willing to allow it. The number of remote position postings has declined. “I don’t think it’s going to go back to where it was in 2020,” Shrivastava said, despite how strongly flexibility and remote work is valued by workers.
The workforce continues to age and retire
The labor force’s accelerating aging will also be a factor in hiring. From 2024 to 2029 is considered “peak 65” — the years where the largest number of Americans are turning 65 — which is “exactly the point where people tend to age out of the workforce,” said Julia Pollak, chief economist at ZipRecruiter.
Not everyone is retiring, though. According to the U.S. Bureau of Labor Statistics’ job openings and labor turnover survey, “other separations,” which includes retirements, have been “strangely low,” Pollak said. That could be because people are working longer due to inflation and high interest rates.
It’s also possible that the worst of the pandemic prompted early retirements, so they’re not showing up now. If someone “was in a job for 30 years and they were going to stay in it for 35 and they got laid off, do you really want to start over? You may as well just retire early,” she said.
But this group of workers should not be counted out. While other surveys have showed that ageism may be rife in the hiring process, older workers can be prime sources of knowledge as organizations continue to grow.
“Many companies are saying they need a way to get the most out of our older workers and keep them on,” said Pollak. Hiring managers can consider what might want to make older workers stay — things like remote work, part-time arrangements or even offering grandparent leave.
Changes in immigration paint a muddy picture
While what exactly will happen with immigration in 2025 is unknown, the number of immigrants coming to the U.S. is likely to fall.
The Congressional Budget Office projected that net immigration will fall from an estimated 3.3 million in 2024 to 1.1 million by 2027, which is a return to pre-pandemic trends. The new administration’s promises of mass deportation and closure of the southern border will also likely lead to fewer people coming to the U.S.
The consequences of this are likely to hit U.S. workers, too, Pollak said. While immigrant workers increase labor supply and can reduce the cost of labor, they also allow for “increased job growth and economic expansion,” she said. This creates jobs for all workers.
But deportations and reduced immigration do not guarantee a boon for U.S.-born workers. Instead, they can lead to contraction of particular industries and lead to job loss for all workers.
H-1B visas, which are foreign worker visas heavily used in the tech industry, may also be impacted given promises to cut immigration, experts said.
That’s not a certainty though. “You have a Republican party that is split on the issue,” said Pollak, pointing to fights over high-skilled immigration. “How that fight plays out in Republican party matters,” she said, adding that “it’ll also depend heavily on interactions between foreign leaders. We just don’t know.”
Possible changes to temporary visas like H-1Bs also may drive potential workers to other countries instead, Pollak added; just the threat will be enough to have those skilled workers making other countries a priority.