By Sarah Fulton
Earlier this week, a new jobs report came out that turned some heads: U.S. weekly jobless claims rose more than expected. Headlines pointed to a softening labor market — something we haven’t seen much of in recent years.
So why, in the very same week, are so many local business owners still struggling to find good people?
It’s a question I hear almost daily — and it deserves a deeper conversation.
For years now, hiring has felt like an uphill climb. Job openings outpaced candidates. Wages surged. Employees left for greener pastures, often without much notice. And just as employers started finding ways to adapt to these shifting patterns, we’re facing another turn: economic uncertainty, workforce reshuffling, and a job market that’s sending mixed signals.
This week’s headlines confirmed what many of us have been feeling under the surface: labor costs continue to rise — even as business activity in some parts of the country is beginning to contract. According to a new report from Reuters, labor expenses increased in the first quarter of 2025, suggesting companies are still spending more per employee just to stay competitive. At the same time, regional indicators like Chicago’s manufacturing index are trending downward, pointing to slower growth ahead.
So what happens when the cost of hiring goes up, but confidence in the economy goes down?
It raises critical questions:
- Are we paying more for talent while preparing for less demand?
- How long can companies absorb rising costs without becoming more selective — or strategic — about who they hire and how?
- And if efficiency becomes the priority, what does that mean for the way we recruit and retain our teams?
These aren’t just questions for the C-suite — they matter on the front lines, too.
Because even with the economic uncertainty, one truth remains: the cost of getting a hire wrong is higher than ever. Every missed hire, every revolving-door role, every extra week a position stays open chips away at productivity, team morale and ultimately profit. When labor costs climb, the pressure to get it right the first time only intensifies.
That’s why so many companies are beginning to rethink their hiring — not just to fill seats, but to build staying power. And that takes intention.
If you’re in a hiring seat, consider asking yourself:
- Are we attracting candidates who align with our values — or just anyone who applies?
- Is our hiring process fast enough to keep great people engaged?
- Are our wages competitive — or just what we’ve always offered?
- Are we adjusting to today’s candidate expectations, or hoping yesterday’s model still works?
There’s no single right answer, but reflecting on these questions is the first step toward hiring more strategically — and more sustainably.
We’re entering a season of recalibration in the workforce — not panic, but pause. A moment to reassess not just how many people we hire, but why, how fast and at what cost. Businesses that take this opportunity to ask sharper questions and invest more intentionally in their teams will be the ones positioned to thrive, even if the road ahead isn’t as smooth as we’d hoped.
If this month’s job report left you wondering what’s really going on with the workforce, you’re not alone.
The better news? You don’t have to figure it out alone, either.
Sarah Fulton is president of staffing operations at The Lee Group, a leading staffing and workforce solutions firm serving Hampton Roads and Richmond. With 16 years of experience helping businesses hire better and grow stronger, Sarah is passionate about solving workforce challenges with practical, people-first strategies. She writes to share insights from the front lines of hiring — and to help local employers navigate what’s next. Reach her at sarah.fulton@theleegroup.com or visit www.theleegroup.com to learn more.
