By: Leslie Shaw and Steve Waldron

As companies navigate a post-pandemic world, labor and talent acquisition have emerged as paramount concerns for employers, overshadowing broader economic conditions. With the job market becoming increasingly competitive and the talent pool evolving rapidly, businesses across industries face significant challenges in securing and retaining skilled workers. The shift in focus from economic uncertainties to workforce dynamics highlights new priorities and challenges for businesses in 2025.

How Talent Acquisition has Surpassed Economic Worries

Recent trends show employers increasingly focused on talent acquisition, even in uncertain economic conditions. A 2023 Talentful report notes that, despite economic challenges, organizations are strategically planning their workforce to scale up recruitment as conditions improve. Similarly, a 2024 Mercer study found that 61% of organizations met 80-100% of their hiring targets in 2022, reflecting a commitment to attracting talent. This shift is driven by a tight labor market, where skilled workers hold more leverage, creating a supply-demand imbalance that intensifies competition.

• Changing Workforce Expectations: Employees today demand more than just a paycheck. Flexibility, work-life balance, career growth, and a supportive workplace culture have become non-negotiables. Millennials and Gen Z, in particular, value personal fulfillment and mental well-being alongside professional achievements. Employers must adapt to meet these expectations to attract and retain top talent, necessitating changes in hiring and workplace practices.
• Rising Skills Gap: The skills required for many jobs have evolved, particularly with advancements in technology, automation, and artificial intelligence. Many companies struggle to keep pace, leading to a skills gap that hinders hiring efforts. Industries like technology, health care, and manufacturing face significant challenges as roles demand increased specialization and technical proficiency.
• Increased Turnover and Job Mobility: Employees are switching jobs more frequently than in the past, driven in part by the expansion of remote work, which has opened up more opportunities. The removal of geographical barriers adds complexity to retention strategies, prompting companies to focus heavily on keeping their best talent.
• Evolution of Diversity, Equity, and Inclusion: Legislative changes and societal expectations are reshaping diversity, equity, and inclusion (DEI) efforts. As lawmakers push for restrictions on DEI programs, particularly in education and the workplace, organizations must navigate a complex regulatory environment. Balancing legal compliance with the goal of maximizing opportunities for all will require innovative approaches. Public demand for greater access remains strong, and strategies for acquiring diverse talent will continue to evolve.

Strategies to Tackle Labor and Talent Acquisition Challenges

To address the pressing challenges of talent acquisition and retention, employers are implementing a range of proactive strategies that go beyond traditional hiring tactics. Below are key strategies businesses are leveraging to navigate the current labor landscape effectively:

• Upskilling and Reskilling Initiatives: Many companies invest in upskilling and reskilling to bridge the skills gap and retain employees. By equipping staff with new skills, businesses create an internal talent pipeline that reduces the need for external recruitment. A 2023 LinkedIn report found companies that promote upskilling see a 30% higher retention rate among participating employees.
• Employer Branding: Companies enhance branding through sustainable practices, employee well-being, and a strong social media presence to attract talent.
• Flexible and Remote Work Options: Flexible work is now essential, with remote and hybrid models giving employers a competitive edge.
• Strong Employee Experience: Positive experiences in onboarding, development, and feedback help retain high-performing staff and reduce turnover.
• Competitive Compensation and Benefits: Companies address inflation by raising salaries, expanding benefits, and offering resources like mental health support and wellness programs.

The Economic Landscape Still Matters, But…

While labor and talent acquisition are top of mind, economic conditions remain a factor in budgeting for recruitment, salaries, and benefits. However, unlike past downturns, where economic constraints led to hiring freezes and downsizing, today’s companies prioritize talent retention and skills development over short-term cuts.

This shift reflects an evolution in organizational priorities. Businesses are investing in employees to strengthen their workforce, acknowledging that talent scarcity is a long-term challenge that will worsen if ignored. As a result, employers are building resilient talent acquisition strategies to prepare for a future where a skilled, adaptable workforce is their most valuable asset.

The emphasis on labor and talent acquisition over economic concerns marks a significant shift in the business landscape. While economic conditions will always influence decisions, companies can no longer afford to delay investments in their workforce. Talent has taken center stage, and those who prioritize it will be better positioned to navigate future challenges.

Connect with CBIZ Talent and Compensation Solutions to learn more about how partnering with an Executive Search firm can help in identifying the talent your organization needs to succeed.