The 2025 recruitment report: hiring in a high stakes economy

If you’re leading a business right now, you don’t need to be told that hiring is tough. 

You know first-hand that finding the right people is hard, keeping them is harder and doing it all while keeping costs down? That’s the real trifecta weighing on every leader’s mind right now.

We’re hearing the same story everywhere. From founders, HR managers and exec teams alike. Team members are stretched thin. Hiring feels harder, slower and more expensive than it should be. And when the pressure’s on to grow or simply stay afloat, clunky recruitment processes quickly become a much bigger problem.

That’s why we surveyed over 1,000 business leaders from around Australia to understand what’s really going on. We asked them questions about the challenges in their business, external factors at play, how they’re managing recruitment and retention, plus so much more. 

Inside, you’ll find the trends shaping recruitment right now, the hidden costs catching businesses off guard, and the strategies high-performing teams are using to succeed. Think of it as your roadmap to building a faster, smarter and more resilient hiring function.

What’s in the 2025 recruitment report?

Recruitment in 2025 looks a little different to years gone by. Our latest report dives into the challenges Australian businesses are facing right now and the opportunities to hire smarter. In the report, you’ll find:

• A spotlight on the current state of recruitment: How Australian businesses are adapting to cautious market conditions and putting survival strategies first.
• Hiring under pressure: Rising costs, economic uncertainty and outdated processes are making recruitment harder than ever.
• The barriers to better hiring: From candidate drop offs to inefficiencies, we unpack the key barriers standing in the way.
• A retention reality check: Turnover is climbing, teams are stretched and holding on to top talent is a growing challenge.
• A smarter way forward: Explore practical strategies to build faster repeatable recruitment processes.

Download the report now.

Key findings from the 2025 recruitment report

The 2025 recruitment report reveals the pressures shaping Australian workplaces right now. From tighter budgets to rising turnover, here’s what business leaders told us about the state of hiring and retention.

• Survival is front of mind with 43% of business leaders worried their organisation won’t make it through the year.
• Tighter budgets are biting as 59% of businesses feel the pressure to cut operational costs while still delivering results.
• Attracting and keeping talent is critical with 49% of employers naming it a top priority.
• Hiring processes need work, with only 6% of businesses rating theirs as excellent.
• Turnover is on the rise with 53% of employers reporting an increase over the past 12 months.
• Teams are stretched thin as 64% of businesses rely on overtime to cover the gaps.

Current hiring challenges

Across Australia, business leaders are operating in one of the toughest climates in years. Costs are climbing, budgets are tight and every hiring decision feels like it carries more weight than ever. Add in economic uncertainty and tighter margins, and it’s forcing leaders to focus on efficiency and being deliberate with every dollar.

Conversations that once centred around growth now start with caution. Many are asking not just how to expand, but how to keep business steady. For some, simply keeping the doors open is becoming a strategy in itself.

It’s no surprise that 78% of businesses say hiring has become tougher as a result of economic uncertainty. With unpredictability front and centre, rising costs and the feeling of lagging behind, it’s clear that the old ways of recruiting just aren’t keeping up.

And when it comes to hiring, most businesses are battling barriers that make it harder to find and secure the right people. The biggest challenge? The talent pool itself. 41% of respondents said poor quality applicants are a top challenge, closely followed by the 40% who simply can’t find enough qualified candidates to begin with. 

Kate Jolly, Head of Global Talent Acquisition at Employment Hero weighs in on recruitment in 2025

“Showing up where your ideal candidates spend their time is crucial. If you’re relying solely on traditional job boards, you’re missing out on a huge pool of talent who might be browsing social media, niche job platforms or industry-specific communities.

Speed matters just as much. Top candidates move fast and a slow hiring process means you risk losing them to competitors. By meeting candidates where they are and having the right tools to make confident hiring decisions quickly, employers can capture attention, build engagement and secure the right people. Keep in mind that a fast hiring process can still be thorough – focus on reducing the time between stages.”

Kate Jolly, Head of Global Talent Acquisition at Employment Hero

Industry benchmarks

If you want to know how your recruitment efforts stack up, setting and comparing against hiring benchmarks is the best place to start. Tracking metrics like time-to-fill, cost-per-hire, staff turnover rates and offer acceptance rates can help give you a clear picture of how efficient your process is, where bottlenecks are and how competitive you are in the market. 

Once you’ve calculated your own recruitment metrics, see how they compare to the industry benchmarks in our report. From here, you can put strategies and tools in place to make changes.

Technology’s role in hiring

One of the biggest frustrations we’ve gathered from our research is the flood of irrelevant applications. In fact, our research shows that 41% of businesses cite poor-quality applicants as a top challenge, while 40% struggle to find qualified candidates at all. 

Unsurprisingly, it’s become increasingly common for a single role to attract hundreds of applicants, many of whom simply aren’t the right fit. This creates long screening times, wasted resources, and the risk of missing out on top talent.

To avoid falling into an admin-heavy recruitment trap, businesses need to build a recruitment system that’s fast, repeatable and scalable. One that empowers hiring managers to own the process without getting bogged down in irrelevant applications and hiring admin. 

This is where recruitment technology comes in. 

The businesses winning talent right now are moving quickly, showing up in the right places, and making the process feel natural, seamless and engaging from the very first day. And they’re tapping into powerful technology and AI to help them do it. 

With new tools on the market like SmartMatch, which uses AI to create instant shortlists of qualified candidates, costly mis-hires become a thing of the past. It cuts through the admin, helps you meet candidates where they are, and embraces technology to create a personalised and efficient experience that makes great people want to join your business. 

Here’s how Employment Hero is helping businesses improve the recruitment process:

Start with instant matched shortlists: Need to hire someone fast? Now you can start your search with an instant matched shortlist of relevant candidates. 

One-click posting across multiple channels: Forget logging in and out of different job boards. If you didn’t find your match from your SmartMatch shortlist, Employment Hero helps you post your role across major platforms in one click.

Smarter screening and shortlisting: Every manager knows the admin involved in screening hundreds of applications. Let our AI-powered tool SmartMatch do the heavy lifting. SmartMatch uses advanced candidate matching to flag the most relevant candidates, helping you skip straight to the top prospects. 

Interview scheduling without the back-and-forth: Employment Hero integrates with your existing calendar tools to automate interview scheduling, so you can empower candidates to pick a slot that works for them. 

A personalised candidate experience at scale: From branded email templates to status updates, our powerful software keeps candidates informed and engaged at every stage, without the need to write each message from scratch.

Built in reference checks: With automated reference checking, you’ll always have confidence you’re hiring the right person for the job.

From offer to onboarding, all in one platform: Generate digital offer letters, collect e-signatures, and trigger onboarding tasks automatically. No paperwork, no delays, and reduced risk of candidate drop-off.

A spotlight on the economic pressures of hiring

Cost of living and inflation are hitting hard, with one-third (33%) of Australian businesses naming it as their biggest economic challenge impacting their business in 2025. 

Rising expenses are squeezing budgets, lifting wage expectations and making it harder to stretch every dollar. For many, it means holding off on investments, rethinking hiring plans and finding ways to run lean without stalling progress.

Hire fast and retain your top performers with Employment Hero

If you’re ready to simplify how you hire, manage and pay your team, our Employment Operating System delivers everything you need in one powerful platform. It brings everything HR, recruitment and payroll into one simple, user-friendly system, all while supercharging your hiring capabilities. Put recruitment on auto-pilot with access to 1.5 million ready-to-work candidates, track applications, onboard in just a few clicks, pay your team with ease, simplify leave management and so much more.

And if you’re keen to lean into AI-powered recruitment, take a closer look at what SmartMatch can do for your business in our quick demo. It can help you find the right candidates faster by automatically matching applicants based on skills, experience and role fit. No more hours lost to resume-sifting or second-guessing who to shortlist. Think of it like having an extra set of hands in your hiring process, giving you the confidence to make smarter hiring decisions. 

Ready to see for yourself? Book a demo or start hiring for free today.

Disclaimer: The information in this checklist is current as at 30 August 2025, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this checklist are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this checklist. You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this checklist.