The job market has noticeably cooled over the past year. Hiring rates have pulled back from post-pandemic highs and companies are taking longer to fill open roles. But while the cooling of hiring is a concern, the labor market remains incredibly tight. In fact, a more sustainable trend could be emerging in 2025, as employers rebalance their workforces and re-emphasize long-term strategic recruiting goals over short-term gains.

The slowdown in employer demand has been more pronounced in specific industries. For example, the hires rate in construction and information (tech) has fallen below pre-pandemic levels. This could be a sign that broader industry trends, such as the steady increase in technology adoption and proliferation of GenAI, are beginning to shift worker skill requirements and demand in these industries.

On the flip side, a steady increase in new and returning entrants to the workforce has kept the overall labor force participation rate from falling. But these trends may be a sign that the labor pool is reaching its limit and that more entrants into the workforce will no longer be able to find jobs quickly.

A cooling job market presents significant challenges for both candidates and businesses. To be successful, candidates should focus on developing their technical skills and seeking meaningful opportunities in a changing work model. Business leaders should seek the most granular job market data to ensure they are making strategic hiring decisions. Having the most current data available for their region or industry can help them plan ahead and identify talent shortages before they become more pronounced.