In 2025, the hiring landscape is poised for significant changes. From the increasing use of AI to shifts in economic conditions, the Employment Rights Bill and workplace dynamics, it will be interesting to see what the year ahead brings.

The use of AI / Chat GBT will continue to be used by HR professionals and candidates

Throughout 2024, we have seen AI continue to weave it’s way into our everyday lives. From a recruitment perspective, we are seeing more signs of it being used by candidates to craft CVs and cover letters using relevant keyword for search purposes and HR professionals using it to support the writing of contracts, policies, job descriptions and adverts as well as automating processes such as onboarding. This will only increase.

While this tool has fantastic capabilities and can add so much value and time-saving, it doesn’t have your expertise and judgement! More than ever, the people element will become more important within the HR function.

Understanding employees, recognising areas where AI has potentially inflated skills, as well as understanding the value it has in speeding up processes within your business will be paramount.

A challenging economic outlook, in different ways than we have seen previously

Sadly, we have already seen the beginnings of a challenged economic market with the increases in National Insurance and the National Living Wage coming into force in April 2025. These increases are putting massive pressure on businesses and the cost is too high for many to bear, and we are seeing some businesses head into the new year with layoffs and redundancies.

We don’t anticipate significant pay increases across the board this year. The outlook is varied; some organisations are implementing pay and recruitment freezes, whilst others are exploring automation and machinery to cut costs by replacing human functions. Meanwhile, others are still full steam ahead and in a position to offer pay raises.

Whilst 2023 and the start of 2024 were job rich, the labour market will continue to be a challenge in 2025. We anticipate an increase in vacancy numbers as we settle into the year. Temporary and contract vacancies in particular will increase, again as a way for companies to navigate the increasing costs ahead whilst ensuring their businesses are able to grow.

Some sectors will remain fairly buoyant, including the legal and financial markets who will continue to thrive throughout the next 12 months. However ever-increasing skill shortages still remain high and accountancy, engineering and certain tech skills will continue to prove a challenge, particularly for this region.

Increased office presence

The post-pandemic remote and hybrid boom is showing signs of slowing down. We have seen fewer remote roles over the last year, and there is an increasing desire from business leaders for their workforce to return to the office. Hybrid still leads the way in terms of available roles, with many opting for a 50/50 split between home and office.

We expect in the next year we will see clearer boundaries in place with set office days for all team members, while still providing that all important flexibility.

However, we do still have an increase in mental health challenges and burnout following covid, and employers will need to work harder on this to ensure employees are supported throughout. Increased office presence can also prove challenging for neurodiverse employees so ensuring your office set up has quiet spaces and clear boundaries can be a way to ease this transition.

The future of work and positive change for apprenticeships

As university fees are set to rise again, causing barriers of entry for some, my hope is that we will see a surge in apprenticeships both across the region and nationally. It is a great way to get people into work and develop their skillset early.

The Government have recently announced some changes to ‘Get Britain Working’, so it will be interesting to see how this plays out in the year ahead.

Bring on 2025!

As we step into 2025, we’re greeted by a year brimming with fresh challenges and exciting opportunities for our businesses and our region. Resilience and courage are hallmarks of our community, and we’re confident that together, we’ll embrace change and thrive in the year ahead.

While 2025 brings new possibilities, it also bears similarities to 2024. Last year, we predicted the rise of AI-driven innovations and anticipated the shifts brought about by a change in Government. Now, as new policies and legislation take shape, businesses are adapting to a dynamic landscape.

We regularly track regional economic and hiring trends, if you would like to chat at any point, please get in touch via joanne@cathedralappointments.co.uk.