13 Oct 2025 Hiring Challenges: What HR Leaders Need To Know Now
Hiring practices are in a constant state of flux, with economic forces, technological innovation and shifting talent expectations shaping the way HR teams manage their hiring processes. Recruiters and employers face a growing list of challenges that could significantly affect hiring performance, recruitment strategies and the ability of HR teams and recruiters to attract and acquire the required talent in 2025 and beyond. Let’s review some of the key trends impacting hiring practices, and what HR leaders can do to address them.
Growing demand for soft skills
According to the World Economic Forum’s ‘Future of Jobs Report 2025’, recent technological advances and shifts in working practices and conditions have led to an increase in demand for soft skills across the workforce. The pandemic accelerated the need for employees who could adapt to different conditions and work environments. Added to this, generative AI and its development is not only replacing some hard and technical skills in workplaces, it’s also rapidly shifting the very nature of our work. This means candidates who can showcase flexibility, resilience, adaptability, willingness to learn, problem-solving and analytical thinking are more valuable than ever.
AI impacting recruitment on both sides
AI is becoming more and more ubiquitous in all areas of life. The hiring process is no different. Job search specialists Jobseeker conducted a recent study on the use of AI in job search activities. According to Jobseeker’s study, both candidates and recruiters are becoming more open to AI as a tool to assist with the recruitment process.
Candidates relying more on AI to boost their applications
The research shows that 40% of US workers have used AI to improve their job applications, with more than 90% of those who’ve used it saying it was helpful. While using AI to enhance a job application was once considered taboo, candidates are now becoming more willing to embrace it.
HR integrating AI Into selection processes
On the other side of the recruitment process, attitudes of HR professionals towards candidates using AI in their job applications is softening. Only 13% of HR professionals stated they would automatically disqualify a candidate for using AI in their job application, and only a third stated AI-usage would lead to them more closely scrutinizing an application (34%). Added to this, HR teams are increasingly turning to AI and automated processes to streamline their recruitment practices.
Gen Z shaping the hiring climate
As Gen Z become more heavily represented in the workforce, attitudes towards work are shifting. Gen Z already represents around 27% of the global workforce, outstripping Baby Boomers and Gen X as a proportion of overall workers. By 2035, Gen Z is predicted to be the largest generation in the workforce, so the preferences and career journeys of Gen Z will have a profound effect on the nature of employment.
Job hopping placing a strain on recruitment teams
These changes are already starting to be felt, with the preference of Gen Z to change jobs more frequently placing greater strain on recruiters and HR teams. According to a 2024 study from EY, 38% of US employees were planning to switch jobs in the year ahead. This represented a 4% increase on the previous year and was largely driven by Gen Z workers. Statistics show employees from Gen Z stay in a job for, on average, just over two years. For workers from Gen X, this figure jumps to five years.
Expectations of candidates shifting
Alongside job hopping tendencies, Gen Z’s expectations are affecting workplace culture. This represents challenges for hiring teams and the working conditions they can offer candidates. A survey from The Times, quoted in People Management, indicates that only 1 in 10 Gen Z employees wants to work in an office full-time, with a quarter preferring a setup that’s mostly geared to remote working. As the influence of Gen Z grows, it may fall on HR teams to work with management to address any disconnect between the employer offer and candidate preferences.
Economic forces dictating hiring strategies
Economic forces will always play a role in dictating hiring strategies. In 2025, there are various economic factors that could play a role in shaping future hiring decisions. Some of these include:
- Greater economic uncertainty: The impact of fluctuations in global trade policy is being felt across the world. A study by McKinsey indicates that only one-third of executives are confident in their organisations’ ability to manage trade policy changes.
- Softening labour demand: The difficulty of predicting the future when it comes to trade policy may cause companies to become more cautious with planned hires and expansion. Instead, firms may look at contract hires, gig workers or project-based staffing over permanent hires.
- Skills mismatches: The growing skills gap could lead to employers focusing resources on training internally, rather than hiring externally. Global skills gaps include IT-related skills, such as AI, big data, cybersecurity and cloud computing, as well as environmental skills, including green energy and environmental engineering. This global shift in the skills required of the workforce can have a drastic impact on hiring and training strategies.
What can HR leaders do to address 2025’s biggest hiring challenges?
Although there are numerous challenges impacting hiring strategies for 2025 and beyond, HR leaders aren’t powerless against them. Here are a few key tips to help you overcome the greatest hiring challenges and prepare your organisation for the future of work:
Prioritise soft skills development
As soft skills become more central to requirements, it pays for HR teams to integrate soft skills assessments into recruitment and invest in soft skills training for the workforce. Soft skills assessments can help employers identify candidates with matching skills more accurately, while soft skills training can ensure the workforce remains up-to-speed with the most valuable skills for now and into the future.
Establish AI governance frameworks
With AI usage growing on both sides, it makes sense for HR teams to develop clear guidelines and transparent policies to protect the integrity of the recruitment process. This includes training HR teams and employees on responsible use of AI in their hiring practices, to ensure fair screening algorithms and efficient automated process.
Redesign talent strategies for Gen Z engagement
Attracting and retaining Gen Z candidates is a challenge that’s only going to grow in importance in the coming years. Developing hiring branding that emphasises purpose, flexibility and growth potential can help attract Gen Z candidates, while structured career pathways, personalised development plans and flexible working patterns can help retain them.
Invest in your workforce through training and internal mobility programs
The growing economic uncertainty requires an agile approach to talent management and retention. Launching internal mobility schemes and re-skilling programs for high-demand skills such as AI and data analytics can help your teams to remain engaged and relevant to the demands of a shifting economy.
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