Biggest Hiring Challenges in 2025 and How IaaS Can Help

It’s the year 2025, and the world of hiring has undergone a massive change in the last few years. The origin of this change can be linked to the COVID-19 pandemic, where a significant chunk of the population underwent a massive change, with terms like work from home, Zoom, and Teams becoming common across the world. The world of hiring has also been affected, with the year 2025 presenting new challenges.

These challenges are due to various reasons, such as changes in workplace dynamics, rise in technology, and changes in expectations from both the employer and the employee. 

However, companies have an ace up their sleeve now. The rise of  Interview as a Service (IaaS)platforms has massively helped companies overcome some of the biggest hiring challenges in 2025. Before we delve into IaaS, we must first recognize the challenges the recruitment industry faces in the current year.

Biggest Hiring Challenges in 2025

Talent Shortages

One of the biggest challenges the hiring industry is facing in 2025 is talent shortages. Even though there has been a rise in unemployment, companies are struggling to find candidates with the necessary skills for the required job. One of the main reasons is that due to rapid technological advancements, a gap has emerged between the education offered and the industry’s demands. And this gap is only getting larger every year.

In addition, post-COVID-19, there was a massive wave of resignations that impacted the industry. This has led to a shortage of talent, as recruiters are finding it hard to attract the right talent with the budget that they are given to hire such talent.

Also Read: What is Caring Culture and why it is necessary in the workplace?

AI & Automation Impact on Hiring

In just a handful of years, Artificial Intelligence(AI) has gone from the future of technology to the present of technology. The AI revolution has been so swift that many industries are still adjusting to its effects. In many fields, though, it has massively improved efficiency, reducing costs. However, there have also been several disadvantages with the overreliance on these technologies, which has led to several incidents of bias.

Another problem is that several products and services introduced with Artificial Intelligence have limited human intervention. This can be hugely detrimental if the technology is trained on biased data. This creates an algorithm where keywords may be prioritized over real-life talent. Moreover, some roles require candidates to be judged on emotional intelligence, something that the AI cannot do.

Also Read: What are pros and cons of Emotional Intelligence in hiring?

Remote & Hybrid Work 

The COVID-19 pandemic transformed the workplace industry entirely. At one point, at least 30 percent of the total workforce was working from home. While it took time, employees and employers both adjusted to the new reality and adopted the remote work situation. However, when the pandemic ended, companies faced a new problem. Employees were reluctant to return to the office, which involved relocating and commuting daily to the office.

Now, a trend has emerged where employees are preferring work-from-home opportunities even if they pay less. According to a survey, 70 percent of employees prefer work-from-home or hybrid working roles. However, companies fear that a full-time remote team is not able to form a level of trust and connection that is possible in an office setting.

Also Read: What is Salary History and why do companies ask for it?

Rising Cost of Hiring

Another reason why companies are struggling to find the right talent in 2025  is the rising cost of hiring. According to a report by the Society for Human Resource Management (SHRM), a bad hire costs six to nine months of the candidate’s annual salary. However, these costs can further swell owing to other factors.

This is why companies cannot afford an inefficient recruitment process, which will only increase the cost of hiring. Moreover, inflation has also been on the rise, which means workers now expect more salary to keep up with the rising costs. This presents a challenge to mid- and small-sized industries that do not have the financial resources to offer the candidate their expected package.

Also Read: 5 Best Ai interview copilot Software You Must Know About In 2025

Diversity, Equity, and Inclusion (DEI)

There have been several researches over the years that have proved that diversifying a company’s workforce helps it grow. One such research was conducted by McKinsey’s in 2024 which found that ethnically diverse executive teams can help a company where 36 per cent more likely to generate above average profitability.

However, companies are now finding it difficult to fill these vacancies as insufficient talent is available. This is where companies are now starting to cut back on these vacancies.

Also Read: Recruitment agency vs RPO: What is better for hiring?

Soft Skills Challenges

One of the changes that has occurred in the workplace in recent years is the increased value that companies now place on soft skills. Earlier companies used to focus on technical skills but started to realize that teamwork, communication, adaptability, and Emotional Quotient were also necessary to create a positive environment at the workplace. 

However, recruiters are finding it challenging to assess soft skills, as they are harder to quantify than technical skills. This can also lead to bias in the hiring process, as recruiters start to rely on gut feelings while judging an employee.

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How to overcome hiring challenges in 2025 

Addressing Talent Shortage

Companies should start focusing on hiring talent that can stick with the company. Often, companies spend their time hiring experienced candidates rather than focusing on candidates who may have the potential to become an integral part of the workforce in the future.

Recruiters should also focus on hiring employees that have skills that can be easily transferred. Moreover, the COVID-19 pandemic [proved to the world that a lot of jobs could be performed effectively without being in the office. This meant that companies could hire talent globally, saving companies massive costs.

Also Read: Why Enterprise Companies are Shifting to IaaS for hiring top talent

Using AI ethically  

While one has to accept that it is the age of Artificial Intelligence, there have to be certain guidelines under which it should operate. Let’s look at it from a recruitment process angle. So, AI can be used to create a structured interview plan that will reduce bias in the hiring process. However, during the Interview, there has to be human oversight. We must understand that AI should be used to collect data and execute monotonous tasks, but the decision-making should be in the hands of humans.

Also Read: Interview Simulation: How Practice Can Improve Your Job Success

Encouraging remote work

Since the COVID-19 pandemic, companies and employees have been fighting over whether the latter should return to work on a permanent basis. However, this has been met with massive resistance from the employees. The solution is hybrid working, where employees attend the office for specific days in a week. 

In cases where employees are working remotely, the company should also offer them similar growth opportunities by providing them with facilities such as home office stipends and online team-building activities.

Also Read: LinkedIn Candidate Sourcing: Best Strategies for Hiring Success

Evaluating Soft Skills  Accurately 

It has been mentioned earlier that evaluating soft skills is hard. However, the benefits of accurately assessing soft skills are so high that companies have made it an integral part of their recruitment strategy. One of the ways to assess soft skills is to use simulated examples of real-life scenarios to check for traits such as leadership, teamwork, and problem-solving. Companies can also use specific tools such as Pymetrics to assess soft skills 

The year 2025 has brought several challenges to the hiring landscape. However, the recent revolution in Artificial Intelligence has also brought several end-to-end hiring solutions software as a service (SaaS) tools. These tools have now helped recruiters make hiring more efficient.

Also Read: Interview Outsourcing: How to Maximize ROI and Hire Smarter with Tech

One such tool is BarRaiser. With our intelligent hiring platforms, recruiters can now make clear, concise, and efficient interview plans. The key to this is our AI Interview Copilot helps recruiters create structured interviews with the relevant questions. To create a questionnaire, a recruiter has to simply put in a prompt on the role, the number of years required for the role, the duration of the Interview, and the parts in which the interviewer should be divided. So, the process that used to take hours earlier can now be done in just seconds.

During the Interview, our bot records and transcribes the entire conversation, which helps in post-interview grading. The bot is also programmed to detect discriminatory language if it is used. The use of a structured interview format also helps ensure all the candidates are judged on the same metric, thereby avoiding bias.

After the interview, the bot asks the recruiters to create a detailed report on the candidate. The bot also creates another report on the interviewer’s conduct, which is shared with the hiring manager and other stakeholders of the recruitment process.

For companies who do not have the manpower to operate the tool, we provide Interview as a Service where we will take over the entire interview process. We have a pool of over 1500 expert interviewers rigorously trained on our tool that enhances interviews across the world. We have a conversion rate of over 70 per cent within two weeks from application to hire. We have amassed a rating of over 4.5 by more than 40,000 candidates. So, what are you waiting for? Use BarRaiser and watch your hiring game go to the next level.