The U.S. labor market continues to exhibit strength, even as employers contend with economic headwinds and lingering uncertainty. Bureau of Labor Statistics (BLS) data shows the U.S. economy added 177,000 jobs in April, which was higher than expected. Industries like healthcare, transportation and warehousing, and leisure and hospitality saw some of the most significant gains. The unemployment rate also held steady at 4.2%.Meanwhile, separate data from the BLS suggests the overall pace of hiring may be slowing. In its latest Job Openings and Labor Turnover Summary (JOLTS), the BLS reported that job openings decreased to 7.2 million in March. Many companies also face recruiting challenges. For example, research from the National Federation of Independent Business (NFIB) found that 40% of small business owners had job openings they could not staff in March. And among the 53% of owners hiring or trying to hire, 87% said there were few or no qualified applicants for the roles they were trying to staff.
More employers embracing skills-based hiring to surface promising candidates
The National Association of Colleges and Employers (NACE) reports that nearly 90% of employers plan to increase or maintain hiring levels for the Class of 2025. This suggests many companies are prepared to invest in emerging talent to help bridge skills gaps and meet staffing goals.NACE’s research found that nearly two-thirds of employers now favor skills-based hiring practices as a tool to help them identify high-potential candidates. The approach focuses on candidates’ transferable skills instead of traditional qualifications—like GPA, in the case of recent graduates. That means employers are relying more on practical assessments, project portfolios and industry-recognized certifications to gauge candidates’ competencies.Meanwhile, many organizations are investing in structured development programs—like mentoring and upskilling initiatives—to help their existing employees adapt to new technologies and evolving job requirements. These strategies not only enhance employee retention but also strengthen succession planning by helping employers cultivate a more agile and future-ready workforce.Learn more about the benefits of skills-based hiring.
Employer tip: Hire with intention—and hold fast to valued talent
Today’s labor market is full of contradictions. While some organizations are easing up on hiring, others are still scrambling to find talent, particularly for specialized or high-impact roles. The takeaway? As the rise of skills-based hiring suggests, strategic workforce planning in 2025 means looking more at what potential hires can do, and not just what’s on their resume. By focusing on capabilities rather than credentials, employers can fuel their talent pipeline and build stronger, more well-rounded teams.Of course, demand remains high for skilled professionals who can deliver immediate value in areas like finance, cybersecurity, compliance and operations. These roles are vital to risk mitigation and business continuity—and thus sit high on the hiring priority list for many employers. And with hiring timelines stretching and economic signals remaining mixed, it’s more important than ever for companies to channel resources into roles that drive measurable impact.Companies contemplating headcount reductions as a cost-cutting measure should consider the long-term repercussions of such a move, including the loss of valuable skills and institutional knowledge. Letting go of strong performers in a labor market that remains tight could also leave teams under-resourced when growth opportunities or urgent challenges emerge.A more sustainable approach to workforce management, especially in uncertain times, is to regularly reassess needs, support internal mobility and double down on development for high-potential talent. Prioritizing retention and agility now can help avoid costly talent gaps later. Embracing a flexible staffing model can also keep companies nimble, allowing them to scale resources up or down as needed without compromising momentum on critical projects.
Job seeker tip: focus on high-impact roles—and demonstrate value
Even as hiring slows in some sectors, many employers continue to actively recruit for essential roles. For candidates with specialized or in-demand skills, aligning the job search with these critical needs can increase the likelihood of landing interviews and offers.For example, a recent graduate with a background in computer science and an interest in cybersecurity might target a security analyst role. By highlighting relevant coursework, certifications and any experience with network monitoring tools or incident response, the candidate can better position themselves for jobs where the demand for talent is high and competition may be lower than for more generalist tech roles.Candidates should also be aware that the rise of skills-based hiring is shifting the spotlight from degrees and job titles to demonstrated capabilities and practical value. Highlighting specific achievements, measurable results and versatile competencies is essential to stand out. Tailored resumes and LinkedIn profiles that reflect a mix of technical aptitude, communication skills and adaptability will resonate more strongly in today’s hiring environment. A commitment to continuous learning can also provide candidates with an edge, as it signals initiative and resilience—traits many employers specifically seek.
How recruiters can help employers and candidates connect in any labor market
As evolving job requirements, talent shortages and shifting career expectations shape the labor market, skilled recruiters can bring efficiency and strategic insight to both sides of the hiring process.For candidates, recruiters can help clarify career goals, refine job application materials, and identify roles that align with individual strengths. Open communication about recent experiences, preferred work environments and long-term career aspirations allows recruiters to better advocate on a candidate’s behalf and present them for opportunities where they’re most likely to succeed.On the employer side, recruiters can bring deep market knowledge and access to a broad talent network, which is especially valuable when hiring for specialized or hard-to-staff roles. And as more organizations embrace skills-based hiring, recruiters can help surface candidates who may not check every traditional box but offer the capabilities, adaptability and potential to grow.Learn more about how to work with a recruiter to land the best job—or best talent.
Stay informed about the latest labor market trends—with Robert Half
View Labor Market OverviewWant more data and insights on how the U.S. hiring environment is evolving in 2025? Visit Robert Half’s Labor Market Overview page to get a snapshot view of current hiring trends and access our expanded coverage on industries hiring, remote work statistics and trends, and more.
