Table of Contents

1.Foreword

2.The State of the Workforce

3.Immigration, Policy, and the Politics of Talent

4.The Paradox of Modern Job Advertising

5.Conclusion

Foreword

As we enter the second half of 2025, the labor market continues to evolve in unexpected ways. While applications are surging and ad costs per applicant are falling, talent acquisition leaders are facing a new and increasingly alarming paradox: more doesn’t mean better. Amid a flood of job seekers and a wave of AI-enabled applications, finding qualified candidates is becoming more expensive and time-consuming than ever before. This whitepaper explores the forces behind these shifts – from labor supply and policy impacts to the widening gap between volume and quality in recruitment advertising – and offers strategies to help talent teams stay competitive.

The State of the Workforce

At a high level, employment numbers paint a picture of a labor market that has largely returned to pre-COVID norms.

  1. The unemployment rate held steady at 4.1% in June 2025, representing around 7 million unemployed individuals. This rate has remained within a narrow range – between 4.0% and 4.2% – since May 2024, indicating consistent labor market conditions.
  2. According to the US Bureau of Labor Statistics (BLS), nonfarm payroll employment increased by 147,000 jobs in June 2025, following a gain of 139,000 in May. Job creation continues but has slowed, with growth concentrated in sectors like Healthcare (+39,000 jobs) and Leisure and hospitality (+48,000 jobs).

Pay, Productivity, and Participation

Beneath the surface of steady employment rates, deeper workforce dynamics reveal a more complex story. From declining labor force participation to rising wage pressure and a lasting shift toward remote/hybrid work, the composition – and expectations – of the American workforce are changing.

Labor shortages

Labor force participation edged down slightly to 62.3% in June from 62.4% in May – its lowest point since December 2022. This drop suggests fewer Americans are actively working or seeking jobs, signaling long-term concerns about workforce engagement.

Persistence of remote work

Remote work has become a permanent fixture of the labor landscape:

  • 22.8% of US employees work remotely at least part-time
  • 45.2% of workers with advanced degrees work remotely vs. 9.6% of high school graduates

While fully-remote job postings now account for only 6% of new listings, they attract a disproportionate 60% of all applications. This signals a continued and powerful preference for flexibility among job seekers.

Wages and inflationary pressures

Average hourly earnings rose by 0.2% in June, reaching $36.30 – the largest monthly increase since January. Year-over-year wage growth hit 3.7%, outpacing the 2.7% inflation rate. This real wage growth (approx. +1.5 percentage points) means workers are gaining purchasing power.

However, wage growth is uneven:

  • Sectors facing acute talent shortages are driving up compensation
  • Unit labor costs rose 6.6% in Q1 2025, reflecting both rising wages and lower productivity

Sector Spotlight: Where Demand Outpaces Supply

Healthcare

Ongoing demand for nurses, physicians, and mental health professionals continues to outstrip supply. 

  • The aging U.S. population is increasing demand for elder care and chronic disease management
  • Post-pandemic emphasis on public and mental health has expanded service delivery needs

Labor market pressure points:

  • The US will need over 203,000 new RNs annually through 2031 to meet demand
  • Employment of nurse practitioners is projected to grow 45.7% 
  • Mental health counselor roles are projected to grow 18.4%

Challenges limiting supply:

  • Clinical burnout and retirements are reducing available talent
  • Pipeline issues persist due to long training timelines and limited school capacity

Technology and AI-related jobs

The tech sector remains red hot, with especially strong demand in:

  • Cybersecurity
  • Artificial intelligence (AI)
  • Data analytics

BLS projections (2023–2033), compared with average of 4.0% across all occupations:

  • Software developer employment: +17.9%
  • Database administrator employment: +8.2%
  • Database architect employment: +10.8%,

AI will reshape tech roles – not by replacing them, but by augmenting them:

  • Developers may use AI to streamline code creation and testing
  • Data roles will grow in complexity and volume as AI systems rely on structured infrastructure

Manufacturing and skilled trades

Amid reshoring initiatives and supply chain realignment, demand for skilled trades and manufacturing roles is rising.

  • Policy efforts to boost domestic production (e.g., CHIPS Act, infrastructure investments)
  • US manufacturing sector added nearly 200,000 jobs from June 2022 to June 2023

Roles in highest demand:

  • Electricians: +6.9%
  • Industrial machinery mechanics: +13.9%
  • CNC machine tool programmers: +28.0%

Barriers to filling the gap:

  • Rising median age of skilled trades, signaling an urgent need for generational transfer
  • Vocational training enrollment has not kept pace with demand

Immigration, Policy, and the Politics of Talent

Donald Trump’s second-term policies are driving major shifts in the labor market – especially in immigration and trade. For the first time in 50 years, the US may see more immigrants leaving than arriving, a reversal that’s already reshaping the composition of the workforce.

Combined with aggressive tariff policies, these changes have created a complex economic picture: while some sectors see temporary gains (e.g., manufacturing), others are hit by acute labor shortages.

Immigration and Talent Flow

Since March 2025, immigration enforcement has had measurable effects:

  • A decline in the foreign-born workforce is visible in Labor Department data
  • Many immigrants are avoiding federal surveys, obscuring labor market tracking
  • In May alone, employment dropped by 696,000 – the largest monthly fall since the early pandemic in 2020

Economists warn that continued enforcement crackdowns and deportations will lead to:

  • Labor shocks in construction, agriculture, and hospitality
  • Overall worsened labor outcomes even for US-born workers, contrary to political narratives

Impact on Talent Supply

The tech sector is especially vulnerable:

  • Projected shortfall of 1.2 million tech workers by 2026
  • BLS expects a yearly gap of 170,000 computer science professionals through 2031
  • Only 279,000 graduates are completing related degrees annually – far short of the 449,000 needed

H-1B visa restrictions are compounding this crisis. For example, Indian nationals – who make up over 70% of approved H-1B applications – are a vital pipeline for tech talent that’s now under threat.

The Paradox of Modern Job Advertising

Something strange is happening in job recruiting: it’s cheaper to generate applications – but harder and more expensive to find qualified candidates.

  • CPA has dropped 52% since 2022
  • Cost per qualified applicant (CPQA), on the other hand, continues to rise

Why This Is Happening

Several forces are driving this paradox:

  • Layoffs in tech and finance are flooding the market with job seekers
  • Many are applying outside their core skill set – into delivery, hospitality, retail
  • Economic pressure is pushing people to seek multiple jobs
  • One-click applications and AI tools make it easier than ever to apply broadly

The numbers show it:

  • Clicks per job: 3.76 → 10.17 (2022 to 2024)
  • Applications per job: 0.30 → 2.18

More applications, but no corresponding increase in quality.

Chart 1: Applies per Job (Q2 2022 – Q2 2024)

Chart 2: Clicks per Job (Q2 2022 – Q2 2024)

Three Major Challenges This Creates

Higher competition for visibility 

  • In-demand sectors like healthcare and skilled trades are seeing CPCs soar, with the average CPC rising from $0.64 to $1.36

Overwhelmed screening systems

  • The flood of low-quality applications puts pressure on filtering systems and human recruiters.

Extended hiring cycles

  • Companies are more selective in uncertain times – leading to longer time-to-fill and higher opportunity costs.

Chart 3: Cost per Click (Q2 2022 – Q2 2024)

Recruitment Marketing in the Age of AI

Programmatic platforms and AI tools are excellent at generating traffic. But most are optimized for clicks, not qualification.

  • CPA dropped from $12.40 to $7.35
  • Cost to convert a qualified lead has gone up
  • Most AI tools optimize for behavior, not outcomes

This disconnect creates a costly inefficiency for recruiters.

From Clicks to Quality: How Top Employers Are Adapting

Smart organizations are shifting strategy – not by reducing volume, but by managing it better.

  1. Better upfront filtering
  • Use AI pre-screening tools
  • Write job ads that attract the right candidates (and deter the wrong ones)
  • Focus on CPQA over CPA
  1. Smarter candidate sorting
  • Combine predictive scoring with conversion-optimized workflows
  • Surface high-fit candidates early in the process

Companies that balance scale with selectivity through intelligent automation and integrated data will lead the pack as competition intensifies.

Conclusion

The labor market isn’t just about open roles – it’s about navigating an evolving, unpredictable ecosystem of economic shifts, policy change, and changing candidate expectations.

Recruiters who adapt their strategies, embrace intelligent tools, and align with today’s labor realities will be the ones who succeed.

As we move deeper into this new era of work, one thing is clear: data-driven, AI-augmented recruitment isn’t a luxury – it’s a competitive necessity.