Dr John Sullivan Talent Management Thought Leadership
It’s better to be prepared than to be surprised.
So, begin thinking about how tariffs will disrupt recruiting during 2025.
Unfortunately, few in the corporate world of talent management have enough free time. To contemplate the drastic corporate cost-cutting and the hiring volatility that will be created by the new administration’s import tariffs. Fortunately, in my view, there is still time for smart recruiting leaders to supplement their projections for 2025 recruiting trends to include the following emerging “tariff-driven trends” in talent acquisition.
The Top Tariffs-Driven Trends In Recruiting
The emerging tariff-related trends that you need to be aware of are listed below. The most impactful trends appear early on the list.
The impact of tariffs will make “work location” a critical talent capability – for the first time in decades. “Where the work is done” may now be the most important factor in workforce planning (surpassing work quality, labor costs, speed, and transportation costs). Smart talent management leaders must proactively build the work location expertise of their team.
Corporate cost-cutting pressures will result in little across-the-board hiring – talent leaders need to expect significant disruption in their current long-term hiring plans. Because if your corporation imports its own manufactured products, raw materials, or foreign-made products for resale from a country under high US tariffs (like China, Mexico, or Canada). Your corporate cost of doing business is about to skyrocket. So, in order to remain profitable (because, in most cases, the costs of high tariffs can’t be passed along to customers), corporate costs will need to be cut across the board. On the talent side, those cuts mean that the function must be prepared for limited across-the-board hiring, with two notable hiring exceptions. The first one will be an ongoing search for tariff experts. And the second will be a continued focus on hiring AI and Quantum computing talent.
The hiring that will be allowed will be mostly in low-tariff countries – as the year goes on, some corporations will be able to avoid paying large tariffs by shifting back to the US. The manufacturing, assembly, growing, and raw material importing operations are currently located in high-tariff countries (i.e., China, Mexico, and Canada). And that relocation to the US will, of course, boost large-scale hiring in the US. However, in some cases, US-based corporations will choose instead to shift their overseas operations to another country that has both low labor costs and low tariffs (i.e., Vietnam, Australia). In these “shifting the work cases,” the recruiting function will need to be able to ramp up its international hiring in the chosen low-tariff countries.
Even with an approved hiring plan, TA must be ready for frequent hiring pauses – uncertainty and volatility are the primary killers of large-scale hiring plans, even when significant hiring has been approved. If the application of tariffs remains as unpredictable as it is now under the current administration, you will need to be prepared for frequent hiring pauses and freezes. This volatility will often require major revisions in your established hiring plans. This same volatility will also mean it won’t be unusual when some already approved hiring requisitions are later withdrawn.
Because of corporate cost-cutting, the recruiting function will have reduced capabilities – obviously, the added costs from paying new tariffs will require massive corporate budget cuts. Additionally, now you can also expect the same emphasis on severe cost-cutting championed by the DOGE team to spill over into the corporate world. That means even corporations that are not greatly impacted by tariffs and trade wars will be making deep “efficiency cuts” to all administrative functions, including recruiting. So recruiting leaders need to prepare once again to “do more with less.” With reduced TA budgets, added pressure to reduce cost per hire and significantly lower recruiter headcounts (with a larger percentage of them being contractors).
Expect a significant increase in applicant volume that will strain your screening process – during the next year, widespread corporate cost-cutting as a result of these new tariffs and an emphasis on efficiency. This will, unfortunately, lead to widespread corporate layoffs. These layoffs, coupled with higher unemployment rates, will drive a dramatic increase in your applicant volume that will strain your ATS and resume screeners. In addition, a large number of quality applicants will also come from the nearly 1 million federal, state, and NGO employees who will be actively looking for work as a result of the DOGE cutbacks.
The extraordinarily high applicant numbers will further reduce your dependence on sourcing – the above-mentioned abundance of jobseekers that will literally find you without much outreach. This will lower the importance of the sourcing function. That, coupled with the availability of more powerful AI-driven sourcing tools, will keep sourcing from ever again being a happy place.
The candidate experience will receive less funding – because finding a good job will become much more difficult throughout this next year. The power in the recruiting relationship will shift away from the applicant and back to the corporate recruiter. That, coupled with the severe cost-cutting in TA, will unfortunately lower the TA resources that can be devoted to providing a great candidate experience.
Your time to fill will become much longer – Overworked hiring managers with only a relatively small number of open requisitions will want to “get it right” each time. And their extended deliberations will increase your time to fill. And that will cause your corporation to lose many top candidates who have already jumped at their first offer.
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Action Steps
With tariffs as high as 25% on imported goods, for the first time in decades, “where the product is produced or assembled” is now becoming one of the highest cost factors throughout your production and supply chain. So, in my view, smart talent leaders need to seize this opportunity to increase their strategic business impact immediately by becoming experts in what I call “the total cost of labor” (which also includes tariff costs) so that a talent function can provide the company with a strategic competitive advantage in this increasingly critical area.
Note for the reader
This is the latest article from Dr. Sullivan, who was labeled “the Michael Jordan of Hiring” by Fast Company.
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