The global labor market has been on a rollercoaster for the past three years. We went from mass layoffs during lockdowns to the frenzied hiring of the “Great Resignation,” followed by a sharp slowdown in the tech sector.
Now, as we look at employment data from late 2025 heading into 2026, a new pattern is emerging. The swings are slowing down, and economists are calling this phase “The Great Rebalancing.”
Recent figures from the U.S. Bureau of Labor Statistics, Eurostat, and major hiring platforms show a market that isn’t collapsing—it’s reshaping itself. Here’s what the data tells us about the global workforce and what it means for both employers and talent.
If 2022 was all about quitting jobs for better opportunities, the current market is about staying put.
Voluntary quit rates have returned to pre-pandemic levels across major economies. In the US and UK, employee churn has stabilized, and those big pay bump offers from competitors are becoming rare.
Job security has become the top priority for many workers. While this is good news for retention, it also brings a new challenge: disengagement. Companies now have to find ways to keep employees motivated even when they aren’t actively looking elsewhere.
The global labor market is showing a K-shaped recovery—some sectors are cooling while others are still struggling.
Technology, Finance, and Consulting have slowed down, with hiring freezes becoming common. Meanwhile, Healthcare, Construction, Manufacturing, and Hospitality are still experiencing severe labor shortages.
This shift means leverage is moving back to employers in office-based roles but remains with candidates in care and trade positions. If you’re hiring in high-demand areas, don’t expect the market to soften anytime soon.
The US and Eurozone are telling two different stories.
In the US, GDP is growing even as the labor market cools—a so-called “soft landing.” In Europe, unemployment is at record lows despite stagnant economic growth.
This is partly due to labor hoarding in Europe. Companies, wary of past talent shortages, are keeping staff even during slowdowns. While this protects jobs, it can drag on productivity. For international companies, this means workforce strategies need to be localized—one-size-fits-all approaches won’t work.
One of the biggest changes is the rise of skills-based hiring.
More job postings, especially in tech, sales, and operations, no longer require a university degree. With a shrinking talent pool and aging populations, companies are prioritizing ability over credentials. AI is also making it easier for workers to improve faster than ever, accelerating this shift.
After years of inflation eroding earnings, salaries are finally catching up.
Late 2024 data show paychecks increasing faster than the cost of living in many developed countries. While this is good for workers, it keeps pressure on central banks to maintain higher interest rates. For companies, the era of blanket salary increases is over—performance-based pay is the new standard.
The global job market isn’t collapsing—it’s finding balance. The frantic volatility of the past few years is giving way to a more stable, sustainable phase. For employers and employees alike, the focus should now be on long-term strategies, adaptability, and skill development rather than reacting to every short-term swing.
At Q2 HR Solutions, it is no longer about reacting to change but about staying ahead of it.
We help organizations move from reacting to trends to anticipating them. For over 25 years, we’ve supported companies in building resilient, future-ready workforces through strategic HR solutions, advanced talent assessment, and technology-enabled processes tailored to your needs.
If you’re ready to strengthen your workforce and prepare for the changing labor landscape, we’re here to partner with you. Get in touch with us today and let us support both your immediate needs and your long-term goals.
About the Writer
Ferdinand A. A. Limbo, Ferdie for short, is a Management Consultant and Head of Strategic Management at Q2. He has over 28 years of experience achieving winning results in the fields of HR, Facilities Services & Management, Engineering Consultancy, Wholesale – Retail and Manufacturing among others as an Executive. Ferdie attended a graduate program in one of the leading universities in the country and a Mentor at the Asian Institute of Management for three cycles.