Clarity is back. Productivity is up. And economic signals are improving.
January is the first month in a while that we’ve been given a relatively clear look at the job market, but there’s still a lot that remains to be seen. Equity markets are near all-time highs, jobless claims are below key thresholds and while rate cuts aren’t imminent, the possibility of them later this year is still being discussed. Taken together, the data is starting to matter again, and it points toward a labor market that’s heating up as we head into Q2.
In December, private hiring turned around with ADP national employment data showing private-sector employers added 41,000 jobs. The Bureau of Labor Statistics (BLS) report closely matched those figures with 50,000 total job added and unemployment falling back to 4.4%. Additionally, year-over-year pay growth held at 4.4% in ADP’s data, while pay growth for job changers continued to accelerate to approximately 6.6%. Together, these trends reinforce the message we’ve been sharing for the past six months: hiring hasn’t stopped, it’s just moving off-market and that shift is driving productivity higher across organizations.
Off-Market Hiring Is Driving Higher Productivity
Q3 2025 saw labor productivity rise nearly 5%, indicating that many companies are generating greater economic value with the same or even fewer employees, not by asking people to work longer hours, but by operating more efficiently through better tools, tighter processes and strong performance. With U.S. labor productivity typically growing at about 1–2% per year, this stands out as one of the most important signals for 2026 hiring that most headlines seem to have overlooked.
Productivity is one of the clearest indicators of how companies are actually operating, so when it rises sharply, it tells us businesses are learning how to produce more value without adding headcount and it changes the math of hiring. AI is getting most of the credit because it makes for an easy headline, but the reality is that productivity didn’t rise because companies magically transformed themselves overnight with AI. The truth is, in most companies, AI has not yet delivered any measurable gains, with the key word being yet.
That doesn’t mean AI won’t play a meaningful role in productivity in the near future. It will. But it does mean AI is not the primary reason behind the productivity gains we are seeing now.
What’s far more likely, and what we’ve been seeing firsthand, is that companies have been changing who they hire and how. Over the past year, hiring volume slowed, but hiring standards went up. Employers are increasingly becoming more selective. Instead of adding headcount through public postings, many employers have been concentrating their efforts on replacing or upgrading roles behind the scenes, through private channels: referrals, direct outreach, recruiters, and targeted networks.
That shift matters because off-market hiring naturally concentrates demand around a smaller, higher-quality talent pool with the hidden job market. When fewer roles are posted publicly and more searches happen quietly, the visible market looks soft even as competition intensifies behind the scenes. The strongest candidates, already employed and productive, are the ones being approached, and they tend to move only for a meaningful step up.
That dynamic is why we are seeing job-changer wage growth accelerating. When companies compete for the same limited pool of proven performers, salary expectations for that group rise even if overall hiring seems paused.
Productivity gains are the natural outcome of that strategy. Leaner teams staffed with stronger talent generate more output per employee. This is what most business models are designed to optimize for. Yet in practice, many companies are still relying on broad searches that result in a average hires. The companies driving the productivity gains are hiring the way the market rewards now. They stay selective. Pay premiums. And they hire the strongest talent off market.
Industry Insights: January 2025 Hiring Trends
What’s happening in hiring across the industries we work in every day.
Administrative & Office Support
Hiring is up for administrative roles, consistent with typical January patterns, but unlike previous years, demand is concentrated at the top end of the market. Executive Assistants, Senior Office Managers, and Operational Coordinators are the hardest roles to fill, with longer searches required to find cross-functional, tech savvy professionals capable of supporting multiple leaders across departments. As a result, compensation for high-level admins is on the rise, with offers up about 5-7% year-over-year as of January 2026.
Accounting & Finance
Talent shortages that began in late 2025 are making it harder than usual to fill accounting and finance roles this January–March, the industry’s busiest hiring period. Nearly half of firms report staffing and retention challenges, with the most competition for public accountants, auditors, tax specialists, and financial analysts. Strong candidates are scarce, hiring cycles are stretching, and wages for top performers are up roughly 3.7% year-over-year which means firms must act decisively to secure the talent they need or risk falling behind.
Construction
Construction job openings rose by roughly 90,000 in November, bringing total open roles to about 292,000, the highest year-over-year increase since mid‑2025. This represents the highest year-over-year increase since mid-2025. While construction teams were not aggressively onboarding at year-end, we saw a notable increase in pre-hire activity in December, with a high volume of client outreach focused on building talent pipelines early. Clients are positioning themselves ahead of what is expected to be a high-growth, aggressive spring hiring season, with project managers and superintendents attracting the most interest. With the labor shortage expected to peak between February and June, firms that wait until spring to get hires in motion will put themselves behind competitors already planning now.
Industrial & Manufacturing
December marked another month of job losses in manufacturing, with employment down by approximately 8,000 jobs and the sector trending downwards since fall 2025. Hiring for skilled trades, automation technicians, and equipment maintenance roles remains active, but most teams are not expanding headcount. Hiring is largely limited to backfilling existing roles, as firms remain cautious amid ongoing tariff and cost uncertainty.
Sales
Hiring is active but highly selective, with strong competition for experienced reps who can produce revenue in leaner, more strategic sales orgs. Employers are no longer scaling teams for growth — they’re targeting quota-carrying professionals with consultative skills, business acumen, and the ability to work across complex buyer journeys. While applicant volume is high, few meet the new bar. Demand is centered on hybrid sellers who are tech-literate, AI-aware, and able to drive value that can’t be automated. It may look like an employer’s market, but for top talent, companies are moving fast and competing aggressively.
Legal
U.S. legal employment hit a record high of over 1.2 million in December 2025, with unemployment below 1%, meaning nearly every attorney is already employed. Firms are actively competing for mid-to-senior level talent in AI law, data privacy, sanctions, and digital assets, with compensation rising as much as 14% for top-performing associates. At the same time, profits per lawyer at Am Law 100 firms are up nearly 54% since 2019, giving them the financial edge to outspend, outpace, and outclose their competitors. Smaller and growing firms are at a distinct disadvantage and will struggle to secure top legal talent unless they adopt a faster, more competitive, and better-supported hiring strategy.
Technology
High-volume tech hiring has slowed, and layoffs at major firms have put specialized engineers and product talent back in circulation, presenting a rare opportunity for non-tech companies pursuing digital transformation or AI integration, particularly in healthcare, fintech, energy and consumer industries to attract and hire talent that would have been out of reach two years ago. Approximately 38% of tech workers say they plan to look for new roles in early 2026, which includes highly specialized talent in AI, cybersecurity, data engineering, etc.
Wealth Management
About 73% of wealth management firms plan to add headcount this year, with nearly all reporting difficulty finding strong candidates. The hardest roles to fill remain client-facing advisors, portfolio managers, financial planners, and compliance specialists. As technology takes on more transactional work, the value of advisors’ human skills — relationship management, strategic guidance, and problem-solving — has grown, making these qualities the most sought-after in top hires. Firms that move quickly, define roles clearly, and present opportunities aligned with what these professionals value are the ones successfully attracting and retaining high-caliber talent as the year progresses.
What This Means for Employers
If you want to optimize your team for stronger efficiency and greater productivity, you need to hire for it. Today’s market calls for selective, strategic, and intentional hiring, with a clear understanding that the strongest talent is no longer moving through the active candidate pool. Big job boards rarely surface talent at the level where hiring actually matters. The top-tier professionals who execute at a high level and deliver immediate ROI are found through direct outreach and proactive headhunting.
Winning in this market requires access, precision, and partners who know how to compete for high-impact performers. That’s the work we focus on every day.
We help companies build leaner, stronger, more productive teams by connecting them with top talent that’s difficult to reach through traditional channels.
We’re ready to put the strongest talent in front of you, and change the way you hire for good.
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