What 2024 Taught Us About Hiring and Retention for 2025

2024 presented many hiring and retention challenges across industries including a low unemployment rate, rising labor costs, and a competitive job market left many organizations grappling with how to attract and retain the talent they need to grow.

To gain a clearer picture of how organizations faced these challenges, we turned to Team Engine’s partners, who shared their perspectives on the unique obstacles their clients faced—and the innovative solutions they implemented to overcome them.

The Ongoing Talent Shortage: Fewer Candidates and High Turnover

The tight labor market created a recurring challenge in 2024: fewer candidates available to fill open positions. "The unemployment rate remains low, so there are generally fewer candidates available for a given role," shared Pete Morelli of Holden Advisors. On top of that, employee attrition remained high as inflation pushed workers to seek employers that aligned with their financial and experiential needs.

To combat this, companies got creative. Referral programs and hiring bonuses became essential tools for drawing in new talent. "We’ve seen clients use referral perks and bonuses to engage existing employees in the hiring process," said Kathey Palmer, Chief Growth Officer at Inova Payroll. Additionally, organizations revamped their benefits to stand out. Flexible work arrangements, telehealth services, and holistic wellness programs helped differentiate employers in a crowded job market.

Skilled Labor Shortages in the Trades and Construction

The skilled trades and construction industries were hit hard by ongoing labor shortages, particularly for roles requiring technical expertise. "The challenge wasn’t just finding candidates—it was finding people with both technical skills and the soft skills needed to succeed," said Tonya Schulte of The Profit Constructors.

To address these challenges, companies invested in training and development to build their own talent pipelines. Apprenticeship programs became a cornerstone strategy, enabling businesses to train employees from the ground up while addressing the skilled labor shortage. At the same time, efforts to rebrand the trades as rewarding and respected career paths helped attract younger talent.

"We’ve seen a promising societal trend toward embracing the trades as a viable and respected career choice," said Kelly Rowlett Presgrave, CEO of Work With Your Handz. However, she cautioned that demand still outpaces supply, creating continued pressure to increase wages and benefits.

Mid-Management and Leadership Talent Gaps

While hiring entry-level employees improved in some areas, filling mid-management and leadership roles became an increasingly urgent priority. "Most of my clients were looking for people to fill open mid-management positions to handle their current workload or to prepare for future growth," shared Judson Griggs, Head Harvester at The Harvest Group.

Organizations that succeeded in hiring for these roles did so by clearly defining expectations and aligning them with competitive compensation packages. Alison Hoffman, also from The Harvest Group, highlighted the importance of preparation. “Clients who were forward-thinking—launching searches with well-defined job descriptions and comp plans—were able to attract top-level sales and leadership talent.”

Others turned inward to "build" leadership talent rather than “buying” it externally. Leadership development programs and career ladders that clarified the skills and competencies needed for advancement were key. As Katie Magoon, President of People Solutions Center, put it, “Organizations leveraging these plans were able to develop internal talent pipelines, reducing the need for external hiring."

Retention Through Workplace Culture and Employee Well-Being

Retention remained a significant challenge across industries, particularly for businesses unable to compete solely on wages. To overcome this, many organizations turned their focus to building positive workplace cultures. "Clients who emphasized creating environments where employees feel valued and connected were more successful at keeping their teams intact," said Ed Laflamme, Head Harvester at The Harvest Group.

Workplace culture initiatives included fostering a sense of belonging, offering recognition for employee achievements, and providing clear career progression paths. In industries like construction, companies rooted their retention strategies in core values, creating workplaces where employees felt aligned with the organization's mission. "Clients who emphasized mission, vision, and values not only attracted better candidates but also retained them by fostering a sense of belonging and purpose," said Tonya Schulte.

Companies also revamped their benefits to address employees’ evolving needs. "We saw many clients overhaul their benefits plans to include non-traditional offerings like flexible work arrangements and financial wellness programs," shared Kathey Palmer. Additionally, training and development emerged as effective tools to keep employees engaged while equipping them with the skills to advance in their roles.

Industry-Specific Strategies in Landscaping

In the landscaping industry, staffing challenges and rising labor costs were top concerns. A survey conducted on behalf of Aspire Software* found that 51% of respondents cited staffing as an ongoing challenge and a significant risk for 2025. Robin Mefford, Senior Manager of Product Marketing at Aspire Software, noted that to combat these issues, more than half of landscaping businesses plan to implement wage increases in 2025.

Wage increases varied by company, with 31% planning to raise wages by 2-3%, 14% targeting 4-5%, and 10% budgeting for increases of 6-9%. "Between recruitment challenges and rising labor costs, crew management has become an operational pressure for many landscaping businesses," said Mefford.

_{*Conducted by Thrive Analytics, an independent third-party research provider and a leading digital marketing research firm}

2024 was a year of challenges and adaptations for businesses across industries. The labor market required organizations to rethink how they attract, develop, and retain employees. From creating apprenticeship programs to fostering positive workplace cultures and revamping benefits, businesses found ways to stand out and meet their talent needs.

As we look to 2025, it’s clear that hiring and retention will remain critical focus areas. The businesses that succeed will be those that continue balancing employee needs with business goals, investing in both their people and their processes to stay competitive in an ever-evolving market.