2025 is poised to redefine the talent and workforce landscape. Advanced AI-powered technologies, shifting workforce demands, and skills-first hiring are shaping a future where adaptability, innovation, and inclusivity are key.
In this fast-paced environment, organizations that leverage these trends will be best positioned to thrive. While adapting to changing environments — including dynamic economic landscape and change in governance — can be challenging, the outlook for the coming year looks positive. For instance, a recent report by Staffing Industry Analysts (SIA) predicts 5% industry growth in 2025, reaching a market size of $198.3 billion.
With unemployment rising from 3.8% to 4.1% and labor force participation showing only minimal change (62.7% to 62.6%), the skills gap is more evident than ever. In this landscape, adaptability and strategic decision-making will be crucial for organizations. Here’s what to expect in 2025—and how businesses can take advantage of these key trends.
Artificial intelligence stands at the number one position in PwC’s list of the Essential Eight emerging technologies. Infact AI is more than just emerging — it is now viewed as a standard in the staffing industry, enhancing efficiency in candidate sourcing, screening, and placement. iHire’s 2024 State of Online Recruiting Report suggests that 14.7% of employers now use AI in recruitment, up from 4.9% in 2023, indicating a 3X increase in users.
Moreover, Gartner projects global IT spending to increase by 9.3% in 2025, driven partly by artificial intelligence (AI). AI is not just restructuring existing job roles but creating new ones. According to the 2024 IT Staffing & Solutions Benchmarking Survey Report, machine learning emerged as one of the most desired skills sets this year, and the trend is only gaining speed for 2025.
While organizations explore ways to bridge AI and ML talent gaps and invest in AI tools, they must also consider the ethical concerns surrounding AI. Since increasing focus on legal and ethical standards has made “the responsible use of AI” critical, organizations must ensure transparency, fairness, and accountability in their AI-driven processes, especially as AI-based hiring practices face greater scrutiny. They are expected to ensure that their AI systems operate transparently, with human review applied to critical decisions where necessary.
Talent acquisition costs are on the rise, prompting organizations to reassess their strategies for expense management. Additionally, the shifting focus toward flexibility, outcome-based solutions, and high-quality talent is fueling the demand for innovative hiring methods like Statement of Work (SOW).
SIA research shows that 63% of large staffing firms now manage some level of SOW within their contingent workforce programs, a 21% increase from 2011. Additionally, 31% of programs plan to integrate SOW spend in the next two years. SOW enables organizations to concentrate on core services while outsourcing specific tasks to expert vendors. This approach reduces the overhead costs of maintaining in-house teams while ensuring top-quality results. Moreover, it broadens the talent pool, allowing organizations to tap into specialized expertise across various locations without geographical constraints.
According to a Korn Ferry report, over 85 million jobs could go unfilled by 2030 due to a lack of skilled workers. The case for skills-based hiring is undeniable. Earlier this year, the Governor of Massachusetts issued an executive order removing degree requirements from most state government job listings and directing hiring managers to use a “skills-based” approach, igniting conversations around skills-first hiring in the industry.
65% of hiring managers now prioritize candidates’ skills over traditional education or work experience. This shift stems from the growing recognition that the respective approach reduces mis-hires and helps retain top talent. A recent Deloitte Insights report reveals that organizations using a skills-first approach are 107% more likely to place talent effectively. Additionally, 79% of hiring managers report fewer mis-hires while 62% agree it has fostered more diverse and inclusive teams.
Skills-first hiring allows organizations to access a broader talent pool, including internally developed talent and individuals with diverse backgrounds and experiences, such as veterans, underrepresented groups, and skilled workers without college degrees. These candidates make up a significant portion of the global workforce – over 70 million workers in the U.S. Alone.
Futureproofing your workforce is essential to navigate the challenges in the upcoming year. This means investing in training and upskilling programs to empower teams with essential skills and fostering a culture of continuous learning and innovation.
The World Economic Forum predicts that by 2025, 73% of employees will need upskilling, while 50% will require reskilling. As organizations embrace skills-first hiring and increasingly invest in AI-powered technologies, the need for workforce development is more pressing than ever.
In a transitioning landscape, skill-building initiatives like upskilling and reskilling provide your organization a competitive advantage. Such initiatives are cost-effective, lowering the expenses of hiring new employees, boosting morale, and preparing organizations to tackle future challenges effectively.
A shrinking workforce does mean shrinking opportunities — it is a call to adapt. With mounting supply chain concerns, consumer demands, and total cost of goods, organizations are turning to strategic solutions like nearshoring to stay competitive.
According to a Kearney study a remarkable 92% of U.S. manufacturing executives have considered nearshoring. Further supporting this trend, a Deloitte survey reveals that 62% have begun shifting their production capacities to nearshore. Latin America, particularly Mexico, has established itself as a strategic hub for nearshore outsourcing, offering a skilled workforce, cultural alignment with the U.S., and favorable time zones, all of which enhancing business efficiency.
Nearshoring can help U.S. organizations strengthen their supply and value chains, setting Latin American countries for substantial economic growth. For instance, Nearshoring is expected to bring in $46 billion in new investments over the next five years, potentially raising Mexico’s GDP growth to about 3% by 2025 to 2027. This shift marks a new paradigm, where organizations prioritize cost efficiency, operational agility, and procurement productivity.
As we approach 2025, the recruitment landscape looks promising for those willing to embrace change.
Organizations must be proactive to succeed in this evolving landscape. Embracing AI, building flexible workforce models, and prioritizing skills-first hiring are now essential. By investing in talent development and adopting agile strategies, organizations not only navigate upcoming challenges but also position themselves for long-term success.
If you are looking for a collaboration to navigate these challenges, Pyramid Consulting is here to help. Our holistic approach combines transformational Talent, Technology, and Training solutions to help your organization gain a competitive edge. Contact us today to supercharge your future.
A streamlined, flexible solution to optimize product development and save costs.
Learn More
The popularity of DevOps is driven by the ability to enable leaner and agile processes with high-quality releases and faster time-to-market.
Learn More
Capitalize on brand equity for enhanced contingent workforce hiring
Learn More
