What has defined recruitment in 2025 so far

1. Skills-based hiring took the lead

This year marked a major shift toward skills-based hiring. More companies dropped degree requirements and started prioritising technical ability, adaptability, and potential. In tech especially, practical experience and demonstrable skills mattered far more than formal education. For recruiters, this meant looking beyond traditional CVs and finding candidates who could do the work, not just talk about it.

2. AI became an everyday recruitment tool

AI continued to transform recruitment: from sourcing and screening to interview scheduling. Recruiters increasingly use automation to save time and improve candidate matching. However, adoption also brought new challenges: balancing efficiency with a personal touch, maintaining fairness, and building trust with candidates wary of AI-driven decisions. The winners in 2025 were those who combined technology with a human-first approach.

3. Smarter, not faster hiring

Despite ongoing demand for talent, 2025 saw a more cautious approach to growth. Start-ups and scale-ups focused on sustainable hiring, tighter budgets, and long-term fit rather than headcount goals. Recruitment became more strategic: embedding data, process optimisation, and cost-efficiency into every hire. Companies didn’t stop hiring; they simply became more strategic about how they did it.

Challenges recruitment teams faced in 2025

Despite the exciting trends shaping recruitment this year, from skills-based hiring to AI-driven efficiency, recruiters and hiring teams faced their own set of challenges. Adapting to new technology, navigating tighter budgets, and competing for top talent all tested the industry’s agility. Here are the three main hurdles that stood out in 2025:

1. Balancing AI efficiency with the human touch

While AI tools helped automate sourcing and screening, many teams struggled to keep the human element in recruitment. Candidates still expect personal communication, transparency, and empathy — things algorithms can’t replicate. Recruiters spent much of 2025 learning how to use AI as a support tool, not a replacement, ensuring technology enhanced rather than replaced real connection.

2. Hiring with tighter budgets and smaller teams

Economic uncertainty meant leaner internal talent teams and reduced recruitment budgets across many start-ups and scale-ups. The focus shifted from speed to cost-effective, high-impact hiring. This pushed more companies toward RPO and embedded recruitment models that offered flexibility, scalability, and better long-term value —a shift we’ve seen first-hand at Global M.

3. Attracting top talent in a competitive market

Despite hiring slowdowns in some sectors, the fight for skilled tech talent remained intense. Roles in AI, data, and cybersecurity were especially hard to fill. Candidates had higher expectations for flexibility, growth, and alignment with company values. To compete, employers had to strengthen their marca de empleador and deliver a standout candidate experience from first contact to onboarding.

Big industry news & shifts in 2025

As the recruitment landscape continues to evolve, several key developments have shaped the industry this year:

1. AI-powered recruitment gains momentum

Artificial intelligence has become a cornerstone of modern recruitment strategies. Companies like Capita are leading the way by implementing AI-driven systems to streamline hiring processes. Capita’s collaboration with Salesforce to launch an AI-powered recruitment system aims to significantly reduce hiring times by automating over 200 tasks, allowing recruiters to focus more on strategic aspects of hiring.

2. Economic uncertainty impacts hiring

The global job market is experiencing its longest downturn since 2000, with companies exhibiting caution in their hiring practices. Recruitment firms like Hays have reported significant declines in profits due to reduced demand for both temporary and permanent hires. This economic uncertainty has led to a more cautious approach to hiring, with businesses focusing on retaining existing talent and being selective in new hires.

3. Strategic shifts in recruitment practices

In response to these challenges, recruitment firms are evolving from traditional hiring methods to more strategic partnerships with clients. Companies are increasingly seeking recruitment services that offer consulting, project management, and executive search capabilities. This shift reflects a broader trend of recruiters positioning themselves as strategic partners, providing insights and tailored solutions to meet the specific needs of their clients.

So far, 2025 has been a year of transformation in recruitment. Skills-based hiring and AI-driven processes are reshaping how companies find and assess talent, while economic uncertainty has made hiring more strategic and measured. Recruiters have faced challenges balancing technology with the human touch, managing tighter budgets, and competing for top talent. At the same time, the industry is evolving into a strategic partner for businesses, helping organisations not just fill roles, but build resilient, future-ready teams.