6 engineering hiring trends to look out for in 2025

Estimated reading time: 12 minutes

As the calendar turns over into 2025 and we reflect on the work we have done, thoughts can often turn to career changes.

However, recent years have been like no other in recent memory, as the job market for developers remains highly unpredictable.

Here are some key trends for engineering managers to know, that should make things easier to navigate a choppy 2025 recruitment landscape.

A hiring plateau

While there are signs of life for software engineers looking for a new role in 2025, barring a miraculous turnaround, things aren’t going back to the way they were.

While there is strong appetite for hiring across the technology sector, there are also signs that things have plateaued, according to ManpowerGroup. Similarly, Indeed’s general overview of US hiring trends predicts a soft landing in 2025, but warns of labor shortages in the years ahead. Analysts point to declining job openings, job gains, hires, and quits, as well as a slowly rising unemployment rate as signals of a cooling economy. 

In the UK, recruiter Robert Half paints a rosier picture, with almost half of tech hiring managers saying they intend to increase the number of full time employees in 2025, while a quarter will take on more contractors.

Robert Half market director Duncan Smorfitt says that with this economic backdrop, hiring budgets are likely to be unlocked and new projects kickstarted. However, hiring managers will likely be selective over how they use that budget, focusing on quality hiring over quantity.

Stagnating salaries

This soft landing likely won’t translate into an immediate pay bonanza for engineers, as salaries stagnate in line with inflation. “We’re not predicting any massive changes in salary,” Smorfitt said, with the market still experiencing a hangover from the post-pandemic hiring binge.

The hiring market for developers has shifted towards more of a hiring market than a candidate one, with less scope for high salary or stock option demands. The engineers most likely to succeed in this more benign market are those who can show how they can collaborate with the business as a whole.

Quiet hiring and a changing skills landscape

Robert Half found that almost half of US firms are willing to increase starting pay for hard to find skills, with AI, machine learning, and cybersecurity top of the list. 

US companies, for example, as well as looking for AI and automation experience, are directing pay hikes to the “most highly skilled candidates who can meet core business needs” Robert Half’s research showed. The firm cited examples such as AI-powered chatbots and predictive maintenance systems as focus areas.

While the rise of generative AI has inevitably changed the hiring landscape, “people aren’t just diving in and suddenly phoning us up and saying, we need AI engineers,” says Smorfitt, probably because no one knows what an AI engineer is at this point.

Rather, he says, “That skill set in terms of prompt engineering, being able to utilize AI, being able to leverage AI and understand its use cases and its impact from a commercial perspective, that is very valuable.”

This tightening hiring market has also led to some companies turning to “quiet hiring”, where existing engineers are reassigned or “stretched” to expand their scope. While doing more with less was the trend of 2024, a mix of hiring for specific capability gaps and increased upskilling efforts are likely to be preferred by engineering managers in 2025.

Another unpleasant corporate trend to look out for is the return of the personal improvement plan, or PIP. The proportion of US employees subjected to PIPs and other measures has risen dramatically since 2020, from 33 per 1000 employees to 44 per 1000 in 2023, according to research by HRAcuity. Engineering managers will have a tricky challenge on their hands if they are asked to put more team members on a PIP in  2025.

More painful hiring processes

Skills aside, the rise of AI is having a corrosive effect on the hiring process as a whole. Hiring managers are flooded with resumes that can beat traditional screening processes thanks to tweaks made by ChatGPT and other generative AI tools. To counteract this, employers are adding exercises and interview stages to filter out unqualified candidates.

Unfortunately, just under two thirds of devs believe two interview stages is optimal, according to WeAreDevelopers. Less than a fifth “see value in three stages”. And while almost half prefer an in person interview, just 6% prefer coding challenges.

Smorfitt said that such tortuous, overly cautious hiring processes could hurt companies. As companies tried to minimize risk by staging multiple interviews, the reality was they chased away talent.

This will crystallize as vacancies increase and competition for engineers intensifies. Companies who are swifter and more decisive will be more likely to snap up the best candidates. 

“They’ll be willing to take on a little bit of risk in doing so in order to make sure they get that talent,” Smorfitt predicted. Even if, for now, they’re unwilling to risk actually paying more.

On top of that, workers are being burned by straight out fraud, with tempting job offers over LinkedIn being followed by demands for advance fees, for training or visas, for example or simple rifling of personal information. Knowbe4, amongst others, has predicted that AI will only help criminals to refine their social engineering efforts. Even more ominously, threat actors are targeting job seekers with crypto scams or delivering malware payloads. North Korea seems to be making this a speciality.

These trends have certainly impacted candidate confidence levels, as the quit rate in the United States plummeted after the Great Resignation of 2021-2022. In September, it hit 1.9%, its lowest rate since July 2015, before rising slightly to 2.1% in October, according to Indeed.

Add to this the rise of “ghost jobs” – where genuine companies list non-existent jobs to build up a pool of talent – and candidates and hiring managers will have to work harder than ever to secure roles in 2025..

The great flattening and conscious unbossing

One trend to look out for this year is the great flattening, or hollowing out of middle management as organizations ask more engineers to get hands on again. Shopify made moves in this direction in 2024 and now Amazon CEO Andy Jessy is the flagbearer for this approach, with predictions of 14,000 managers being cut at the organization.

Engineering managers should also look out for signs of younger developers “consciously unbossing”, or shunning traditional, hierarchical career paths. According to research by Robert Walters, almost three quarters of Gen Z professionals see the route to success as accumulating skills rather than responsibilities. 

The staffing firm suggests the future is increasingly “team-based”. Though it also predicts that mid-level roles remain vital, and employers will need to “innovate” to make these roles attractive. Including offering “clear upskilling opportunities.”

RTO is inevitable

If younger engineers are shunning traditional career paths, there’s one path they can’t avoid – the hike back to the office. Companies are demanding staffers return to the office, for at least a few days a week.

“It is something that our clients are asking for explicitly,” says Smorfitt. “And they’re not flexing on it.”

The one bright spot, perhaps, is that employers are prepared to flex on pay for in-office work. Robert Half found that over half of US firms were prepared to pay 20% more for workers willing to come in four days or more.

Well-being and work life balance are high on developers’ wish lists, a survey by WeAreDevelopers found – in part because of the corrosive effect of layoffs over the last years. Even if Gen Z may feel differently.

The German tech recruiter found that while they were at least aware of the importance of work-life balance, employers “place higher value on wellness initiatives and automated workload management” than flexible work arrangements and better remote support.