What is the Outlook for the Job Market in 2025?
Now that 2024 has drawn to a close, we’re left wondering what’s in store for the labor market in 2025? 2024 finished on the right track with jobless claims at an eight-month low. The labor market continues to remain resilient despite pressure from immigration and inflation. Additionally, despite widespread concern that the influx of AI would result in mass layoffs, MSN reports that the impact of AI on the job market has been nearly nonexistent. Furthermore, they report that it is likely to continue having a minimal impact on job growth heading into 2025.
While it remains uncertain about how much of an impact AI will have on actual job growth, it’s much more certain that AI will continue to dominate the application process in 2025. In a recent article, we discussed how 98.5% of Fortune 500 companies are using ATS (Applicant Tracking Software) to screen applicants. The use of AI-based application screening software will continue to be a major force in 2025. This means that learning to navigate this new dynamic should be a top priority for applicants.
Wage Growth & Inflation
To complement the relatively strong jobless numbers in 2024, wage growth is currently sitting at 4%. With inflation at 2.6%, this means that wage growth is finally starting to catch up with and outpace inflation for the first time since the pandemic. Going into 2025, the incoming President’s Administration will look to continue increasing wage growth while maintaining relatively low levels of inflation. Whether proposed tariffs will have a positive or a negative impact on both of these factors remains to be a concern of major economists.
Conversely, the incoming Administration’s proposed restrictions on immigration are likely to result in a tightening labor market reports Marketplace. If this holds to be true, it seems likely that wage growth may actually increase. Although these numbers are positive, there are still quite a few negative indicators for the outlook of the job market in 2025. Currently, confidence in the application process is at an all-time low. Even worse, candidates report longer job searches, greater frustration in the job search process, and increased stress levels with their employment options. These are all negative indicators that suggest there may be some unhealthy components undercutting the job market.
Job Searching in 2025
Finding a new job in 2025 will likely continue to remain challenging despite the relatively strong labor market. This is due to multiple factors, such as the increasing prevalence of ATS in application screening we mentioned earlier and the increased number of job applicants. Just because jobless claims have decreased over the prior eight months does not mean that the number of people applying for positions has decreased.
The number of LinkedIn users continues to increase every month, and with that increase comes additional job searches and applications. This is supported by recent application data which suggests a 20% increase in applications by women alone in 2024. The unfortunate negative impact of additional applicants means greater competition for available jobs. This is why many companies reported receiving upwards of 500 applications for a single position. With that data in mind, it’s clear that honing your resume, improving your skillset and possibly taking some new courses or certifications is a great way to prepare for the job market in 2025.
Interviewing in the Future Job Market
The transition to virtual interviewing is likely to speed up in the new year with more and more companies opting to host virtual interviews rather than in-person meetings. This increase in virtual interviewing means that applicants should consider brushing up on their skills with some of the major virtual meeting software, such as Zoom, Microsoft Teams, and Google Meet. It also means that applicants with poor internet connections in rural parts of the country will continue to be put at a disadvantage. However, there is some good news on that front, with the continued growth of Starlink and highspeed broadband access, rural applicants will start to be able to close the gap with applicants in urban centers.
The second major transition that is taking place in 2025 is a switch to behavior-focused interviewing. This is the practice of interviewing candidates to identify specific traits that employers believe will enable that candidate to be a good future employee. Typically, employers are seeking to determine whether someone is likely to be engaged, inquisitive, resilient, positive, and impactful. Employers have determined that these five indicators are the bedrock for a successful employee.
Job Searching Tools
With 2025 shaping up to be a major year in the labor market, it’s important to have a firm understanding of the job searching tools at your disposal. Services such as Indeed, LinkedIn, Glassdoor, and Pay Scale are great tools that you should familiarize yourself with. These are some of the most popular and most essential job searching tools in your arsenal in 2025. However, there are also some less-known resources you should consider, such as professional resume writing services, interview coaching, salary negotiators, and social media wizards. These are all great additional resources that can help you maximize your earning potential as we go into the new year.
