ZipRecruiter Study Finds U.S. Employers Have Renewed Optimism for Labor Market

Rhea-AI Summary

ZipRecruiter's Second Annual Employer Survey reveals strong optimism for 2025, with 76% of employers planning to expand headcount. The survey of 2,000 businesses shows significant improvements in employee retention, with average turnover rates falling 37% year-over-year.

Key findings include a shift toward hybrid work models, with 40% of employers supporting mixed arrangements while fully remote work declined to 7% from 21% in 2023. Companies requiring in-office presence at least three days weekly increased to 53% from 37%.

Regarding compensation, 41% of employers increased base salaries for new hires in 2024, and 79% plan raises for 2025, with 55% planning 1-4% increases and 24% anticipating 5% or more. The positive outlook is supported by easing inflation and stabilizing interest rates, with 64% of employers believing macroeconomic conditions will support hiring in 2025.

Second Annual Employer Survey reveals insights into The Great Stay, hybrid work, the state of pay, and the year ahead

SANTA MONICA, Calif.--(BUSINESS WIRE)-- ZipRecruiter®, a leading online employment marketplace, today released the results from its Second Annual Employer Survey, providing an in-depth look into the challenges, motivations, and latest hiring practices of employers across the U.S. According to the new report, employers are optimistic about 2025. 76% of surveyed employers say they plan to expand headcount in the coming year, with 53% anticipating modest increases and 23% expecting more significant growth. Meanwhile, 21% expect hiring to remain steady, and fewer than 4% predict workforce reductions.

“Over 80% of employers across tech, financial services, and healthcare plan to expand hiring in 2025, signaling renewed labor market optimism after two years of declines,” said Julia Pollak, ZipRecruiter's Chief Economist. “Easing inflation and stabilizing interest rates are fueling employer confidence. 64% say macroeconomic conditions will support hiring in 2025.”

ZipRecruiter surveyed individuals responsible for hiring decisions at 2,000 businesses of varying sizes and industries throughout the U.S. The report provides insights into three key categories, including employee retention, remote work, and pay. Key insights include:

From Attrition to Stability: How Employers Perceive “The Great Stay”

• Employers see internal efforts leading to retention success. The average turnover rates reported by surveyed employers fell 37% year-over-year. Many employers credit their own efforts for declines in attrition rates citing enhanced job security and stability (47%), better work-life balance (46%), and improvements in benefits and pay, career development, and employee engagement (42%).
• Churn falling in sectors with both strong and weak labor markets. Declines in turnover rates year-over-year were uneven across industries. Business Support & Logistics saw the largest drop, with turnover falling 73%. In contrast, Manufacturing (-18%) and Entertainment & Leisure (-4%) recorded only modest declines.
• Not all employers shared in the gains. Nearly 4 in 10 respondents said they thought turnover had risen due to inadequate compensation or benefits (43%), limited career growth opportunities (41%), and poor work-life balance (40%).

Remote Work in 2024: Companies Shift Toward Hybrid Models and Stricter Oversight

• Companies have solidified hybrid work as the dominant model. 40% of employers surveyed support a mix of in-office and remote work in 2024, whereas fully remote work sharply declined to only 7% compared to 21% in 2023.
• Employers emphasize consistency and predictability. Companies mandating employees to work in-office at least three days per week rose from 37% in 2023 to 53% in 2024, while five day office attendance increased from 16% to 20%.
• Pay differentials are being adopted for remote work. The share of organizations actively recruiting remote workers rose to 22%, up from 16% the year prior, and 12% of companies widened or introduced geographic pay differentials in the past year, while only 8% narrowed or removed them.

The State of Pay: Pay Set to Climb in 2025

• Employers are reshaping compensation: Nearly half (41%) of employers reported increasing base salaries for new hires in 2024, while a third (32%) introduced new pay scales or job tiers, and 30% increased the share of compensation tied to performance.
• The majority of businesses are planning raises. 55% of employers are planning modest pay increases of 1-4%, and 24% anticipate raises of 5% or more, marking a sharp turnaround from 2023 when nearly half of employers (48%) reported resetting pay downward amid recession fears.
• Larger companies are much more likely to give major pay increases. 30% of organizations with 5,000 or more employees are planning pay increases of 5% or more, compared with just 13% of organizations with 10-49 employees.

To view the full report, please visit: ziprecruiter-research.org/annual-employer-survey.

Methodology

ZipRecruiter conducted a national online survey between September 24 and October 16, 2024, to explore employer attitudes toward recent hiring trends and their experiences of current U.S. labor market conditions. The survey was administered to a Qualtrics panel of 2,000+ verified talent acquisition professionals and hiring managers, each with considerable responsibility for hiring processes and decisions. They were drawn from businesses of various sizes across a wide range of industries. In addition to standard screening and demographic questions, respondents were asked about their recruiting, hiring, employment, and retention practices, as well as their expectations, desires, and requirements for future talent acquisition activities.

About ZipRecruiter

ZipRecruiter® (NYSE:ZIP) is a leading online employment marketplace that actively connects people to their next great opportunity. ZipRecruiter’s powerful matching technology improves the job search experience for job seekers and helps businesses of all sizes—including enterprise businesses—find and hire the right candidates quickly. ZipRecruiter has been the #1 rated job search app on iOS & Android for the past seven years¹ and is rated the #1 employment job site by G2.² For more information, visit www.ziprecruiter.com

¹ Based on job seeker app ratings, during the period of January 2017 to January 2024 from AppFollow for ZipRecruiter, CareerBuilder, Glassdoor, Indeed, LinkedIn, and Monster
² Based on G2 satisfaction ratings as of December 18, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241211269162/en/

Media Contacts

ZipRecruiter

Claire Walsh, Press Relations

press@ziprecruiter.com

Source: ZipRecruiter, Inc.

FAQ

What percentage of companies plan to increase hiring in 2025 according to ZIP's survey?

76% of surveyed employers plan to expand headcount in 2025, with 53% anticipating modest increases and 23% expecting more significant growth.

How much did employee turnover rates decrease in ZIP's 2024 survey?

Average turnover rates reported by surveyed employers fell 37% year-over-year.

What percentage of companies are offering hybrid work models in 2024?

40% of employers support a mix of in-office and remote work in 2024, while fully remote work declined to 7% from 21% in 2023.

What salary increases are companies planning for 2025 according to ZIP's survey?

55% of employers are planning modest pay increases of 1-4%, and 24% anticipate raises of 5% or more.

How many companies require employees to work in-office at least 3 days per week in 2024?

53% of companies mandate employees to work in-office at least three days per week in 2024, up from 37% in 2023.

Which industry saw the largest drop in turnover rates according to ZIP's survey?

Business Support & Logistics saw the largest drop in turnover, falling 73%.