The actual reality vs. the predictions everyone made in January '25

Every year begins with confident forecasts about talent, hiring and the economy.
And every year, the market reminds us that reality doesn’t care much for neat predictions.

Now that we’re drawing to the close of 2025, it’s clear where expectations matched outcomes, and where the industry got it wrong.

Here’s what we’re seeing on the ground, across AI, engineering, product, and digital hiring markets.

Prediction 1: “Hiring will bounce back strongly in H1.”

Reality: Growth returned but it wasn’t evenly distributed.

The expected hiring surge did arrive, but only in specific sectors:

The companies driving hiring right now are those with:

• Clear technical differentiation

• Real product-market fit

• Funding tied to revenue or applied AI use-cases

The rest are still waiting for confidence to return.

Prediction 2: “AI will reduce reliance on recruiters.”

Reality: AI changed the work, not the need.

AI now handles:

• Sourcing signals

• Market mapping

• Technical skill inference

• Screening automation

• Sequenced outreach

But human judgment is more important than ever for:

• Closing senior candidates

• Assessing behavioural fit

• Messaging the opportunity in a meaningful way

• Running tight hiring processes that don’t lose candidates

AI made average recruiters faster. It made great recruiters unbeatable.

Prediction 3: “Salary inflation will stabilise.”

Reality: Internal parity became the real challenge.

While headline salaries did flatten in most engineering & product roles, the gap widened inside organisations:

• New hires often require 10–25% higher compensation

• Existing team members feel the difference

• Retention risk rises quietly, not loudly

The best companies responded with:

• Salary benchmarking every 6–9 months

• Clear pay transparency and progression frameworks

• Proactive adjustment rather than reactive repair

Those who didn’t are now losing their mid-tier talent to their own job adverts.

Prediction 4: “Everyone will return to the office.”

Reality: Hybrid won. Fully-office is now a filter.

Teams didn’t go back to the office, talent filtered out companies who tried.

The most popular model:

3 anchor days, real purpose, no performative presence.

The model that lost:

“We want people in for culture.”
(translation: We don’t know how to manage outcomes.)

Talent didn’t reject offices. They rejected control without clarity.

Prediction 5: “Candidates will become easier to hire again.”

Reality: Candidates are replying, but they’re selective.

Response rates are up.
Interest is up.
But conversion is down unless the narrative is strong.

The hires that land today have:

• Real impact

• Clear direction

• Defined ownership

• A compelling “why now”

High-performers are no longer “looking for a job.” They’re looking for meaningful work.

So where is the market heading now?

2025 was the year of:

• Skills-first hiring

• Smaller, sharper, more senior teams

• AI-augmented delivery

• Clear mission > broad ambition

• Outcome-based work > presenteeism

And the organisations winning talent are the ones who can articulate:

• What they’re building

• Why it matters

• Why now is the moment to join

Not in corporate language. In human language.

The Tides view

This isn’t a recovery cycle. This is a reset cycle.

Companies aren’t scaling with volume anymore. They’re building lean, high-impact teams with strategic hires, and we’re helping them do exactly that across AI, engineering and product.

If you’d like a short market insight briefing tailored to your sector, we’d be happy to share what we’re seeing in real time.