Indeed: In today’s labor market ‘people need to upskill and reskill more rapidly than ever before’

The labor market has seen a great amount of turbulence over the past few months, with instances such as the US trade tariff announcements causing a lot of uncertainty. 

These layered on top of domestic headwinds — particularly policy changes, wage regulations, and ongoing uncertainty around employment rights — have made it difficult for employers to plan with confidence. 

To understand what this means for HR, UNLEASH spoke exclusively to Jack Kennedy Senior Economist at Indeed Hiring Lab.

Retaining staff in today’s labor market

A few years ago, there was a lot of noise around how difficult it was to find staff.

But Kennedy insists that this has eased, explaining there hasn’t been a recent rise in job losses, unemployment remains low, and layoffs remain modest.

“Recruitment conditions have eased, but it’s not necessarily easy to find workers,” he adds. One manifestation of this is that we still have quite robust wage growth in the UK. 

“It’s still running close to 6% year-on-year but it’s been gradually coming down from peaks. Employers have responded to wage pressures and rising living costs, which have meant workers have been able to bargain for higher pay – though that’s now gradually cooling.”

With this being said, Kennedy says that it’s important for HR leaders to understand how they can continue to retain top employees, and what they can do to attract new talent.

For Kennedy, the number one factor is around salary transparency, explaining that it’s important employers are “upfront” about it.

“Being transparent about pay is a key part of employer branding,” he notes. “Current employees value that transparency – they want to know what they could be earning as they progress in their careers. 

Aligning pay expectations from the outset is valuable for saving time and improving efficiency. It ensures relevancy, helping the best candidates feel encouraged to apply and filtering out those with mismatched expectations.”

Kennedy highlights that this reflects the rising trend of pay transparency. In fact, the UK compares favorably to other European countries – around 70% of job postings include pay data, whereas most European countries are at 50% or below.

“There are cultural differences, but EU-wide pay transparency laws will come into force in the next couple of years,” he adds. “That’s likely to raise transparency levels across Europe and in the UK, especially with multinationals adopting consistent policies.” 

Additionally, flexibility is seen as a key benefit.

One way flexibility has shown up is in remote working, which Indeed tracks regularly. Kennedy says: “Each month, we measure the share of job postings that offer remote work, and that remains close to peak levels. We haven’t seen a major reversal.

“Companies are continuing to offer remote work, which is interesting because it goes against the return-to-office narrative. Even in sectors like banking, finance, and other professional categories outside tech, it hasn’t declined much in our data. 

 

There’s more contribution from hybrid models as opposed to fully remote, but flexibility remains a powerful tool for employers.”

These benefits are a crucial to hiring success, with Kennedy advising employers to clearly advertise them in job postings. 

“There’s been rising interest in benefit preferences in recent years, though we’ve seen a slight decline recently,” he highlights. “It’s an interesting trend to watch in this cooling market as cost pressures build for employers.”

How skills and AI is reshaping the world of work

Another key factor to consider when recruiting new talent is for HR leaders to be aware of and understand the skill mismatches present in the labor market.

Kennedy highlights that some industries traditionally find it harder than others to recruit the skills they need – creating skills gaps.

“There’s been less ability to access foreign talent to plug these [skills] gaps, especially post-Brexit and with tighter immigration rules,” Kennedy says.

“These skill gaps already existed, and now we’re seeing AI accelerate the pace of change. The nature of many jobs is evolving. People will need to upskill and reskill more rapidly than ever before.”

To rectify this, he recommends that the government needs to “lean in” to support closing gaps from a policy perspective. 

Employers should also assess the need to offer opportunities to their current workforce and train new recruits to meet their needs. This, Kennedy believes, is key to addressing both existing skill challenges and the rapid changes AI will bring.

To understand this in greater depth, Indeed analyzed 2,800 skills mentioned in job postings and mapped those to AI’s potential to perform related tasks. 

Indeed then asked Gen AI models to rate capabilities in dimensions like theoretical, practical, and logic-based tasks – scoring from one to five – and used that to calculate exposure ratings across occupational groups.

The main takeaway was that Gen AI enhances rather than replaces human skills – at least with current technology. 

Humans remain central,” Kennedy affirms. “That could change as technologies evolve, but for now, the focus is on upskilling workers and equipping employers to harness AI effectively.

“On the job creation side, we’ve seen new roles emerge – jobs involving generative AI tools, whether building, maintaining, or using them. 

“We’ve seen explosive growth from nearly zero since the launch of ChatGPT. It’s still a small share – about 0.4% of UK job postings – but growing rapidly. These jobs span a range of occupations, not just tech: scientific, research, marketing – you name it. It’s already visible in the data.”

AI is also “reshaping” hiring in a number of ways, from improving candidate matching to streamlining admin tasks, such as scheduling interviews. 

Being able to automate certain time-consuming tasks means hiring managers have more time to spend on the interactions with candidates that really matter. 

Kennedy adds: “On the candidate side, AI tools are being used to optimize CVs and tailor job applications.

“AI is already influencing hiring and we’ve also seen new roles created to integrate AI into business processes. 

“Roles like AI consultant and prompt engineer have emerged – jobs that barely existed until relatively recently. So, hiring practices and the talent landscape are changing rapidly due to AI.”

Learning how to navigate the HR environment may be challenging for many HR leaders, which is why UNLEASH asked Kennedy to share his concluding thoughts and advice for other professionals.

He shares: “Be open to widening the net in terms of the skills and experience you’re seeking. 

“Be very clear in job descriptions about what you’re offering – include pay transparency, clearly advertised benefits, and strong employer branding. Make sure that messaging is on point.”