Turnover is also down due to “external economic factors,” the report said, putting retention in the spotlight.

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Across the U.S. labor market, “The Great Freeze” appears to be thawing, with 63% of businesses preparing to increase hiring in the year ahead, according to an Oct. 21 report from ZipRecruiter.

The increase in hiring could have significant impacts, especially since employee turnover dropped from 177% in 2023 to 50% in 2025, marking a “historic slowdown,” the report said.

“Our research suggests ‘The Great Freeze’ is giving way to ‘The Great Thaw,’ and the most prepared employers are already taking action,” Nicole Bachaud, a labor economist at ZipRecruiter, said in a statement.

“We’re seeing businesses ramp up entry-level hiring, drop degree requirements and incorporate skills assessments into their process,” Bachaud said. “The organizations that adapt to new technologies, prioritize skills and invest in their workforce will gain a competitive edge in securing top talent as the market shifts.”

Amid labor market uncertainty, job seekers are bracing for a new reality in the job search process, according to a report from Express Employment Professionals-Harris Poll. In response, job seekers are turning to flexibility; 83% of those surveyed said they’re willing to accept a different role than initially planned.

In the ZipRecruiter survey of 1,500 talent acquisition pros and hiring managers, 30% of employers reported lower employee turnover due to “external economic factors,” up from 24% in 2024. These economic shifts increased job hugging behaviors among workers, the report found.

As hiring freezes begin to thaw, 76% of employers said employee retention will be a key focus for the year ahead.

Entry-level workers, in particular, could see more opportunities in 2026, with a third of employers saying they plan to hire more entry-level workers over other roles.

As part of the hiring process, businesses are embracing skills-based hiring and dropping degree requirements, ZipRecruiter said. In fact, 38% of companies said they plan to evaluate skills earlier in the hiring process through candidate assessments.

People-centered skills are becoming more important, with the top three in-demand skills including collaboration, customer service and communication.

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