As economic headwinds force business leaders to rethink strategy, talent acquisition has not escaped unscathed. HR professionals confirmed as much in the 2025 Identity of HR survey.

In the survey, 37% of HR professionals named budgetary constraints as a key challenge in 2024; similarly, 36% of HR professionals also named hiring as one of the biggest challenges faced in 2024.

Budgetary restraints included salary cuts, headcount reduction, hiring freezes and overall fewer resources. Hiring challenges encompassed issues like I-9 documentation, onboarding and recruiting.

Both metrics increased year over year.

In last year’s report, only 21% of HR professionals reported budgetary challenges as a top concern the year before. Likewise, only 22% of respondents reported hiring as a key challenge from the previous year.

The state of the economy seems to be an undeniable factor in the shift in this Identity of HR findings, experts told HR Dive.

“Over the past year, macro-economic volatility has led companies to scrutinize their spending, and that includes what they’re spending on headcount,” Liv Anderman, vice president of marketing and research at AI hiring platform Findem, said via email. “Many organizations that ramped up hiring post-pandemic are now looking hard at efficiency, which means tighter budgets and more cautious growth plans.”

Business owners need to be “smart and savvy and resourceful” during such times, Audrey Gorman, director of business development and marketing at International Staff Augmentation, said.

“People, especially business owners at smaller companies, are always going to be more aware of what they’re spending on anything in times of economic uncertainty,” Gorman said.

The ‘white-collar recession’

Economic challenges may affect knowledge workers differently than other kinds of workforces: 82% of respondents recently surveyed by Employ Inc. said they anticipate a “white-collar recession.”

While the demand for white-collar workers seems to be slowing, demand for blue-collar workers remains, the report found.

“We’re seeing two very different job markets emerge — one overwhelmed with applications, and another starved for talent,” Employ CHRO Stephanie Manzelli said in a statement.

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