New research suggests the 2025 hiring freeze is about to start thawing — and fast
New research suggests the 2025 hiring freeze is about to start thawing — and fast
By Bruce Crumley | Published: 2025-10-28 15:09:00 | Source: Inc.com
Ongoing economic uncertainty has put hiring plans at many U.S. employers on hold over the past several months, with most hiring limited to replacing departing workers only. New data Job posting platform ZipRecruiter suggests that those defensive corporate positions may soon be abandoned in favor of increasing headcount again.
While many indicators suggest that business leaders have been bracing for an economic downturn since May, ZipRecruiter’s 2025 Annual Employer Survey indicates that many now believe it is time to grow again. One reason for this apparent shift is the growing belief that many of the uncertainties created by a myriad of disruptions – including import tariffs, mass deportations that have shrunk the workforce, the impact of artificial intelligence on jobs, and ongoing government shutdowns – no longer seem likely to lead to a contraction in economic growth.
As a result, a ZipRecruiter survey of more than 1,500 recruiting professionals suggests that their months-long reluctance to increase headcount is now beginning to fade, with 63 percent of respondents saying they plan to hire within the next year. In good news for recent college graduates who find themselves out of the job market, more than 31 percent of participating HR executives said they would resume entry-level positions whose tasks many companies are automating with AI.
In other words, the employment stagnation and labor market tightening that began nearly half a year ago may soon be opened up by strong corporate hiring.
“Our research suggests that the ‘big freeze’ is giving way to the ‘great thaw,’ and the most prepared employers are already taking action,” Nicole Basho, a labor economist at ZipRecruiter, said in comments accompanying the survey results. “We see companies.” Intensifying entry-level hiringDropping degree requirements and incorporating skills assessments into their process. Organizations that adapt to new technologies, prioritize skills, and invest in their workforce will gain a competitive advantage in securing top talent as the market transforms.
In stark contrast to the Great Quit trend of 2021-2023 — when employers increased salary levels to retain or hire employees amid high rates of employee turnover — the “Big Pachoud Freeze” signals that companies are apparently allowed to offset the effects of that earlier period, consolidating internally.
For example, employee turnover rates, which reached a staggering 177% in 2023, fell to just 50% last year. Just over 30% of survey participants attributed this stability to external factors such as declining employment trends that made people think twice before giving up their jobs in search of something better.
As a likely result of worker caution, 57.3% of survey respondents said their companies had avoided raising base pay for new employees over the past year, while 45.8% said they had kept salaries flat even for existing employees.
But those benefits from very low employment rates amid uncertainty may be short-lived as companies shift from defense to offense. Because in addition to the nearly two-thirds of HR managers saying their companies will rehire at a higher level over the next year, 76 percent of respondents said retaining current employees will be a major priority.
But these hiring goals may again require employers to raise salaries to achieve them. Not only will new job candidates seek more money, but the resumption of hiring across sectors of the economy will allow current employees to similarly demand raises – or to work for the companies that offer them.
Moreover, there are signs this is already happening among the most valuable workers, even as the majority of employees desperately cling to their jobs until the labor market opens up again.
“There is a growing gap between what workers expect to earn and what employers are willing to pay, causing companies to lose out on the best candidates,” the ZipRecruiter report said. “A third of employers (33.6 percent) were prevented from hiring because candidates demanded higher wages than they could offer. Four in 10 employers (39.7 percent) say candidates rejected their offers because of low wages… As the market thaws and wage increases resume, transparency will be the key factor in attracting talent.
What other changes did Ziprecruiter identify in participant responses that are likely to similarly accelerate through 2026? For starters, 38% of respondents said their companies have already dropped requirements for applicants to have college degrees. Instead, their priorities are increasingly shifting toward people with specific job skills and experience.
Meanwhile, more than half of survey respondents said the use of AI in their companies has created jobs, rather than destroyed them, with the technology increasingly deployed to evaluate candidates for those jobs. In fact, 47% of hiring managers from small businesses report that they have adopted AI into their hiring procedures, outpacing larger companies that do the same by 12 percentage points.
“This difference is rooted in perception,” the report said. “Only 67.6 percent of businesses believe AI can simplify the hiring process, compared to nearly three in four (73.7 percent) of SMEs.”
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