Roundtable: 2025 Labor Market Predictions

As we step into 2025, the business landscape continues to evolve at a breakneck pace, with new challenges, technological advancements, and workforce trends reshaping how organizations operate. Four Lightcast thought leaders are here to help navigate this complex terrain, offering distinct perspectives on the year ahead. From the rise of people analytics in the C-suite to the growing influence of artificial intelligence, the resilience of remote work, and the ripple effects of economic shifts, these predictions provide a roadmap for organizations looking to thrive despite disruption.

These four forecasts shed light on critical themes like labor shortages, ethical considerations of AI, shifting work paradigms, and emerging economic trends. Together, they form a compelling narrative about what lies ahead—and how businesses can prepare to meet the future head-on.

Ron Hetrick: The Artificial Intelligence Reckoning

2025 will be the year of the AI reckoning. The initial excitement must translate into application. I think we will have clearer insight into the potential disruption of AI. If certain jobs are in jeopardy, then that should start revealing itself as the year progresses. The issue will remain though: will there be any innovation into the areas that are most vulnerable to the labor shortages we are facing and will increasingly experience? There are also legal and ethical considerations forcing companies to rethink their excitement about using AI without more careful consideration, especially in terms of hiring. I believe that by the end of 2025, we will have enough evidence to see if AI will truly address our labor needs, or if it will just disrupt spaces not experiencing labor problems.    

Rachel Sederberg: The Rise of Remote Work Continues

80% of CEOs predict remote work will vanish within three years; I respectfully disagree. Despite media focus on return-to-office mandates, remote work will persist beyond 2025. Its benefits—such as cost savings and access to diverse talent—ensure its longevity. Hybrid and flexible options are increasingly crucial as workers priorities vary, often along the lines of generational preference differences. While some value in-person interactions, others strongly value the flexibility of remote work. With shrinking talent pools due to an aging population giving workers more leverage, rigid return-to-office policies risk alienating top talent. Meeting employees where they are will be key for employers.

Cole Napper: Robustly Changing Market Forces Signal Meaningful Shifts Needed in Talent Intelligence and People Analytics

Most predictions for a new year are a reframed synopsis and diagnosis of the present year. I will try not to do that. Here are a few things I see coming in 2025 that are net-new for the new year: a pent up demand of tech exits will lead to many tech IPOs, the crypto re-boom will continue, interest rates should continue to decrease slowly, swift deregulation will lead the broader economy to grow in 2026, but will actually hurt the economy in 2025, and the Gen AI boom will not turn to bust, but the cost of "consumption" of AI will begin to be passed to consumer, which will lead to Gen AI applications needing to produce value for the first time to justify the increased cost. 

What does this mean for talent intelligence and people analytics? In 2025, while AI was predicted to threaten blue-collar jobs, it's actually the white-collar workforce that faces some displacement due to automation. The crypto market and slew of IPOs will lead to there being a "haves" and "have nots" version of the tech industry, where traditional large tech firms will continue their "efficiency" mandate, while a boom in hiring will start for the newly minted cash-rich tech growth companies. The government's efficiency work could lead to the job market being flooded white collar resumes, and it will take a while for the private sector to accommodate this influx of labor, putting pressure on wages and forcing job mobility. Talent intelligence for blue collar workers will continue to increase in demand and wages should continue to grow there. People analytics and workforce planning for most firms, though, will focus on efficiencies, productivity, and AI use cases that actually produce value above the cost of consumption. As many of the past few years have been years of odd contrasts (e.g., COVID boom and busts, etc.), that trend of contrasts will continue into 2025.

Elizabeth Crofoot: People Analytics Enters the C-Suite

2025 is the year people analytics enters the C-suite. We have a massive labor shortage on the horizon: an estimated deficit of 6 million people in the labor force in under 10 years. Business leaders can’t plan for this future without knowing what skills are available to them, both within their company and in the labor market. In 2024, we saw many companies hiring for AI and data science roles, but they’re overlooking the importance of soft skills. In 2025, we’ll see people analytics leaders lead the charge in helping companies make sense of what their data means for hiring and business growth – and the rest of the C-suite better listen.