ZipRecruiter Sees Labor Market Thaw After 'Great Freeze'

ZipRecruiter reports a thaw in the labor market after the "Great Freeze", as uncertainty over inflation, tariffs, and recession has caused employees and employers to hold off on major changes. Workers are keeping their current jobs, rather than seeking new opportunities.

The labor market, which had been in a state of uncertainty due to factors such as inflation, tariffs, and recession fears, is showing signs of recovery. According to ZipRecruiter's Third Annual Employer Survey, the labor market's "Great Freeze" is thawing, indicating a shift from employee turnover to retention as businesses and workers alike seek stability.

Employee turnover, which had been high in 2023, dropped sharply to 50% in 2025, marking a historic slowdown in movement. This trend is likely due to economic shifts that have driven job hugging behaviors, with 30% of employers reporting lower employee turnover due to external economic factors in 2025 ZipRecruiter Research Finds ‘The Great Freeze’ Thawing as U.S. Employers Prepare to Ramp Up Hiring^[1].

The survey also reveals that 76% of employers plan to focus on employee retention in the year ahead, signaling a potential thaw in the labor market. Moreover, 32% of employers intend to hire more entry-level workers, suggesting that the job market may be opening up for these positions ZipRecruiter Research Finds ‘The Great Freeze’ Thawing as U.S. Employers Prepare to Ramp Up Hiring^[1].

The evolving nature of pay, benefits, and skills is another key insight from the survey. While 57% of employers kept base pay unchanged in 2025, 61% plan to raise salaries next year. Additionally, 38% of companies are shifting their focus to evaluate skills earlier in the hiring process through the use of candidate assessments. This trend indicates a move away from degree requirements and a greater emphasis on skills-based hiring ZipRecruiter Research Finds ‘The Great Freeze’ Thawing as U.S. Employers Prepare to Ramp Up Hiring^[1].

The role of AI in the hiring landscape is also noteworthy. Though 72% of employers see AI as a way to streamline recruitment, only 43% have used it in their hiring processes over the past year. However, 52% report that AI is generating new roles within their organizations, indicating that AI is driving job creation ZipRecruiter Research Finds ‘The Great Freeze’ Thawing as U.S. Employers Prepare to Ramp Up Hiring^[1].

Small and medium-sized businesses (SMBs) are leading the charge in AI usage, with 47% reporting having used AI in their hiring efforts in 2025, compared to 35% of enterprise employers ZipRecruiter Research Finds ‘The Great Freeze’ Thawing as U.S. Employers Prepare to Ramp Up Hiring^[1].

In conclusion, ZipRecruiter's survey provides a snapshot of the evolving labor market, indicating a thaw after the "Great Freeze." The survey underscores the importance of retention, skills-based hiring, and the role of AI in shaping the future of the job market.