The labor market chill: Seasonal dip or warning sign?

December 30, 2025

 

Trent Cotton

3 min read

Key takeaways

• The November hiring dip is sharper than usual: Seasonal slowdown played a role, but structural caution is driving longer pipelines and slower conversions.
• Applications remain strong while hires lag: Apply-to-hire ratios are rising, meaning competition is tougher and candidate experience matters more than sourcing volume
• Speed and tech will define success in 2026: Teams that act quickly and adopt tools like AI for screening and scheduling will secure top talent before the market tightens.

November’s labor market sent mixed signals

Job openings and applications stayed elevated compared to last year, yet hires slipped into negative territory. At first glance, this appears to be a familiar seasonal slowdown, but the depth of the decline may reveal a more complex story.

According to the iCIMS Insights December Workforce Report, U.S. job openings were up 4% year-over-year in November, and applications climbed 6%. Yet, hires fell by 1%. In EMEA, openings increased by 13% and applications rose by 11%, but hiring activity remained relatively unchanged, up just 1%.

Historically, November dips are normal. Retail and hospitality hiring often peaks earlier in the fall, while white-collar roles slow as budgets close. However, this year’s pullback was steeper than usual, and it coincides with continued rising jobless claims and reports of companies tightening backfills.

Seasonality vs. structural cooling

Seasonality explains part of the November dip. Hiring typically slows as companies finalize budgets and candidates shift focus to year-end obligations. Retail and hospitality roles often peak earlier, leaving late fall quieter. But this year’s decline is sharper than is typical.

iCIMS data shows elevated openings and applications compared to last year, yet hiring is not keeping pace. This pattern suggests employers are cooling the market by reducing backfills and slowing conversion rather than cutting jobs outright. The result? Job security remains high, but mobility is shrinking.

For talent leaders, this means planning beyond the calendar. If hiring velocity slows while openings remain high, competition intensifies. Longer pipelines and higher abandonment rates make speed a differentiator.

Preparing for 2026: Speed and tech

The slowdown isn’t just about numbers; it’s about readiness. CHROs are doubling down on talent acquisition tech, with 85% calling it a top priority, according to the iCIMS 2025 State of the CHRO Report. AI adoption is accelerating, saving recruiters two to five hours weekly. Familiarity with AI correlates with perceived efficiency gains, making incremental adoption a smart play.

Timing also matters. Waiting for January to restart hiring could mean paying a premium later. Warm past applicants now, line up offers early and secure talent before competitors wake up. Velocity is the obstacle — and the opportunity.

Here are some practical steps for talent leaders:

• Map your hiring funnel to identify bottlenecks.
• Invest in candidate experience improvements to reduce abandonment.
• Pilot AI tools for screening and scheduling to free recruiter time.
• Act quickly on top talent before the market becomes even tighter.

Turning slowdowns into opportunities

November’s hiring dip is partly seasonal, but the depth of the decline signals structural caution.

For talent leaders, the message is clear: Don’t assume January will fix everything. Address funnel friction, leverage technology that accelerates decision-making, and act early to secure top talent. The market may be cooling, but proactive teams can still win.

Read the full December report here.