The employment landscape is evolving at an unprecedented pace. To thrive in 2025 and beyond, businesses must proactively adapt to emerging hiring trends. This dynamic environment presents both challenges and unique opportunities for forward-thinking organisations.
As technology advances and employee expectations evolve, the ability to anticipate and respond to these shifts will be crucial for competitive success. By understanding the key hiring trends, challenges, and opportunities on the horizon, businesses can make informed decisions that will shape their future.
Here are the key trends and factors influencing the hiring outlook in 2025:
1. The Impact of Economic Trends on Hiring
The job vacancy landscape has experienced notable changes. In the three months to November 2024, there were approximately 818,000 job vacancies in the UK, the fewest since May 2021. This is a significant decline from the peak of 1.3 million job vacancies in the three months to May 2022. As businesses continue to adapt to shifting economic conditions, the focus is now on optimising hiring strategies to remain competitive in a tightening labour market.
However, while vacancies are lower than in recent years, the workforce still faces skills shortages, particularly in tech and IT sectors, where demand for skilled workers remains high. Employers are expected to continue competing for top talent by offering more competitive salaries and benefits packages.
2. The Role of Automation and AI
As AI and automation continue to shape the future of work, businesses are increasingly turning to these technologies to streamline hiring and improve productivity. Nearly three-quarters (72%) of UK employers plan to encourage employees to use generative AI tools in 2025, helping to automate routine tasks and increase efficiency.
Workers in tech and IT are particularly optimistic about the impact of AI on their careers, with 67% believing it will improve their skills and job prospects. Businesses that embrace automation will likely see an improvement in productivity, but they must also invest in reskilling their workforce to keep pace with technological advancements.
3. Salary Trends and the Growing Demand for Skilled Workers
While salary increases remain higher than historical norms, the 2024 average of 4.3% is projected to decline to 3.9% in 2025. This follows several years of elevated increases in response to the pandemic and the “Great Resignation.”
Despite these budget constraints, the demand for skilled workers remains high. 82% of organisations reported higher payroll expenses in 2024, reflecting the continued need to attract and retain talent in a competitive market. This is particularly challenging for organisations facing cost pressures, such as increased employer national insurance contributions.
4. Generational Expectations and Pay Discrepancies
As generational shifts influence the workforce, salary expectations are also evolving. Gen Z and Millennials are driving this change, with 67% of employers reporting that Gen Z has higher salary expectations than in previous years. Similarly, 64% of employers say the same about Millennials. These shifts indicate how the cost-of-living crisis is impacting younger generations, with their increased demand for higher pay and better benefits.
In contrast, Baby Boomers and Gen X workers have less aggressive salary expectations, suggesting that the workplace priorities for older generations may differ significantly from those of their younger counterparts.
5. The Importance of Flexible Benefits
In addition to salary, flexible benefits are becoming an essential tool for employers to attract and retain top talent. Nearly half of employers (43%) currently offer flexible benefits, and another 29% plan to introduce them in 2025. Workers also want to see this perk implemented, with 39% indicating interest in flexible benefits in future roles.
Employee well-being is a significant driver of this trend. Beyond salary increases, employees are seeking benefits that ease living costs, such as financial support for remote work (50%), a 13-month salary (48%), and allowances for fuel, meals, and public transport. These benefits are particularly important in the context of the ongoing cost-of-living crisis, which continues to impact many workers.
6. The Debate Around Hybrid Working
Hybrid working remains a contentious issue between employers and employees. Despite its widespread adoption, 62% of firms have repeatedly changed their workplace policies in the past four years, indicating ongoing struggles to find the right balance. The Office for National Statistics (ONS) has highlighted how hybrid work has deepened social divisions, with certain sectors and job types more likely to support remote work, leaving others behind.
For businesses, striking the right balance between flexibility and in-office presence will be key. As the hybrid working model continues to evolve, finding ways to support both business goals and employee preferences will be critical for maintaining workforce satisfaction and productivity.
7. Training and Reskilling for the Future
With the rapid pace of technological change, reskilling and upskilling employees is crucial for maintaining a competitive workforce. Currently, 65% of employers offer in-house training programs, and 52% have implemented training initiatives to boost productivity. However, as the skills gap continues to widen, businesses must invest more in training and development to ensure their workforce is equipped for the future.
Workers are also taking responsibility for their own development, with 43% pursuing external learning opportunities, often supported by their employers. These initiatives will play a significant role in ensuring that businesses remain agile in the face of evolving technology and market demands.
Why Partner with Four Talent?
At Four Talent, we understand that the future of business success requires not just quality products, but a keen awareness of the changing dynamics of the workforce. Whether you’re focusing on attracting top talent with competitive compensation packages or adapting to new technologies in your operations, staying ahead of hiring trends will help your business remain resilient in the face of ongoing change.
Partnering with a recruitment agency like Four Talent offers tangible advantages:
- Optimised Jobsite Budgets
- Access to Broader Talent Pools
- Reduced Time-to-Hire
- Cost-Effective Recruitment Solutions
Let’s talk about how we can help you get ahead of the game in 2025 and build a workforce that will drive your business forward.