Workers' preferences should be the focus of employers' attention.
## Current Trends Reshaping the Employment Landscape
In 2025, the world of work is undergoing transformative changes, as demographic shifts, technological advancements, and sectoral changes redefine the way tasks are performed and jobs are filled.
### Demographic Realities and Labor Market Tightness
The labour market is experiencing record highs in terms of employment rates, with the OECD average employment rate reaching 72.1% in Q1 2025, an increase from previous years. However, employment growth is slowing, with a rise of just 0.12 percentage points year-over-year in early 2025, compared to 0.20 points the previous year. This trend is partly due to demographic factors, such as aging populations and shrinking working-age cohorts, that predate the COVID-19 crisis.
### Sectoral and Occupational Changes
Several sectors are experiencing growth, with health care and government leading the way, adding 51,000 and 103,000 jobs, respectively, since April 2024. Transportation and warehousing, social assistance, and financial activities have also seen positive growth. Conversely, federal government employment has declined.
### Technological Advancements and Remote Work
Despite the easing of the pandemic, remote work continues to persist, with a substantial share (21.6%) of the U.S. workforce telecommuting in April 2025. Although gender, age, education, and occupation play a role in access to flexible work arrangements, the trend towards hybrid work models is evident.
### Employer Sentiment and Employee Demands
Employers are becoming more cautious, with only 58% planning to expand their workforce in late 2025, down from 63% in late 2024. Geopolitical risks and potential tariff hikes are cited as reasons for subdued hiring plans, which could further dampen employment growth.
Workers, on the other hand, are seeking meaningful careers, flexible arrangements, and employers with strong values. In fact, one-third of workers would prefer unemployment over remaining in roles where they feel unwelcome or disconnected.
### Addressing the AI Training Gap and Skills-Based Hiring
In light of the growing importance of technology in the workplace, there is a significant gap between the interest in AI and the training received by workers. Employers are increasingly recognising the need to invest in skills, not just degrees, to close this gap and tap into AI's potential, all while preventing social displacement.
### The Rise of Older Workers
Older workers are rejoining or remaining in the labor market due to increased life expectancy, financial variability in retirement funds, and more accessible, flexible work options. This demographic shift is particularly evident in the segment of the labor force aged 55 to 75, which is the fastest-growing in terms of labor force participation.
### The Role of HR Services
HR services are playing an increasingly strategic role in workforce planning, talent sourcing, skill development, and transitions. Clients often start relationships with HR services for immediate operational needs, but these partnerships can expand to more strategic and international collaboration.
### The New Model of Flexibility with Intentionality
A new model of "flexibility with intentionality" is emerging, where flexibility is valued and expected, but structured to ensure high-stakes or collaborative tasks are completed. This model aims to enhance work-life balance by minimising commutes and allowing better management of personal responsibilities.
### Companies Adapting to the New Landscape
In response to these trends, companies are offering distinct career tracks, one focused on office presence with higher compensation, and another centred around flexibility with a lower pay scale. This approach allows businesses to cater to the diverse needs and preferences of their employees while maintaining productivity.
### Conclusion
The current employment landscape is characterised by a labour market at near-full capacity but facing headwinds from slowing growth, demographic aging, and employer caution amid global uncertainty. Technological change sustains hybrid work models, albeit with uneven access, while sectoral shifts highlight the resilience of health care, government, and select service industries. Employee sentiment and employer strategies are increasingly shaped by external risks, suggesting a future where adaptability and equitable access to opportunities will be critical for sustained labor market health.
- With the rise of remote work, an increasing number of financial activities are being performed in the cloud, blurring the boundaries between office and home, especially in the finance sector.
- The educational sector is capitalizing on the technological advancements reshaping the employment landscape, offering courses in areas like cloud computing and technology to prepare students for the jobs of the future.
- In this new landscape of flexibility, businesses in the education-and-self-development sector are seeing growth as more workers seek to upskill and adapt to the changing demands of the workforce.
