Economy-wide breakdown
- The fourth quarter of 2024 fueled hopes for strong labor market growth in the new year. While October’s jobs report fell significantly below expectations due to the impact of Hurricane Milton, November and December exceeded forecasts. Over the past three months the job market has grown at a respectable average of 170,000 jobs—an encouraging sign given the backdrop of still-high interest rates.
- While overall job growth remains steady, the labor market is a far cry from the peaks in the early 2020s, which led to the “Great Resignation.” Now, fewer workers are quitting their jobs, leading to fewer backfill openings and ultimately driving down the hiring rate. Despite this slowdown in quitting and hiring, layoffs have not risen significantly, creating a relatively stable environment for those currently employed.
- For workers with jobs, this means consistent wage growth and a moderate selection of open positions to explore. However, the picture is less optimistic for unemployed workers. The labor market has become increasingly challenging, with the job-finding rate—the percentage of unemployed workers securing jobs each month—declining steadily over the past six months.
- As we look ahead to 2025, steady labor market growth is expected to continue. However, policy uncertainty under a new administration will be a critical factor in shaping the trajectory of the labor market. Decisions on fiscal and monetary policy, as well as regulatory changes, could significantly influence hiring, wages, and overall economic momentum in the year ahead.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
The healthcare industry closed out a remarkable year with a full recovery of the jobs lost during the height of the pandemic. The sector also surpassed its pre-pandemic trend by an impressive 200,000 jobs. Not only has the sector rebounded, but it is now growing at a faster pace than before the pandemic. Healthcare is leading the overall labor market, contributing the largest volume of job growth across all industries—a testament to its critical role in the economy and its resilience in the face of challenges.
Looking back at 2024, healthcare added jobs at a rapid pace, averaging north of 58,000 jobs per month over a three-month average. This growth nearly mirrored the rapid pace in 2023, a signal that there is no imminent cooldown in job growth.
Among healthcare subsectors, home health care services is the standout, growing at an extraordinary rate of nearly 10%. Ambulatory services are also expanding robustly, with job growth exceeding 5%, reflecting strong demand for outpatient care.
Meanwhile, hospitals and nursing care facilities are experiencing a slight slowdown, with growth rates dipping below 4%. Despite this moderation, both subsectors continue to post respectable gains.
Wage Trends
While healthcare job growth remains sky-high, wage growth has noticeably slowed. For hospital and ambulance service workers, wages had been growing steadily at around 3%, but recent data shows wage growth across all major subsectors has settled to an average of 1-1.5%.
This moderation is likely influenced by the nature of wage-setting in healthcare, where long-term contracts often dictate pay. Wages are often set for a period, and once renegotiated provide a bump up, which occurred during the peak of the pandemic. As these contracts come up for renewal, we could see another wave of elevated wage gains, reflecting ongoing demand and labor market pressures within the sector.
Openings and Turnover Trends
While the broader labor market has faced a slowdown in hiring, healthcare has seen only a mild decline. In 2024, the industry made 772,000 total hires, slightly below the 833,000 hires recorded in 2023.
One key factor behind this drop is a decline in voluntary quits. Last year, 540,000 healthcare workers quit their jobs, down from 622,000 in 2023—a sign that job seekers are either comfortable in their current role or have fewer outside options for new employment. Despite this decrease, layoffs remain rare, reflecting the competitive demand for healthcare talent and the ongoing need to fill critical roles across the industry.
Recruitment Marketing Trends
The term “long” or “ATS apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “easy apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy-apply metrics are not directly comparable to those of the “long” or “ATS apply”. The metrics are therefore presented separately.
Long Apply
While broader recruiting costs fell significantly in 2024, healthcare prices headed in the other direction as competition for qualified nurses, home health aides, and mental health therapists remained tight as ever. Cost-per-click (CPC) rose to the highest level in several years at above $1.40. Likewise, cost-per-applications (CPA) increased above the $40 threshold, a level not seen since early 2022.
Why is this happening? Because of subdued job seeker activity in terms of conversions from click to apply, as apply rates fell slightly to 3.6%.
Easy Apply
Even for short or easy-apply jobs—often considered the lower-cost option—costs have climbed. Cost-per-click (CPC) surpassed the $2 mark, while cost-per-application (CPA) settled just under $15.
The reason for this increase mirrors trends seen with traditional application methods: a declining apply rate. From its peak of 16% in 2024, the apply rate for easy-apply jobs has fallen below 13%, driving up costs as more clicks are required to generate applications. This decline reflects shifting dynamics in candidate behavior and a tightening labor market.
Recruiting Marketing Forecasts
Using Appcast’s weekly historical CPA data, Recruitonomics has created a two-quarter forecast of median cost-per-application for the healthcare sector. CPAs are expected to remain above their mid-2024 level through the beginning of the year due to a competitive hiring environment.
What does this mean for healthcare?
In 2024, healthcare not only fully recovered all jobs lost during the pandemic but also grew at the fastest pace of any sector in the U.S. economy. This momentum is highly likely to continue in 2025, driven by the growing demand for healthcare services as the population ages.
However, strong demand for hiring has also pushed up recruiting costs. Persistent shortages in key roles—such as nurses, home health aides, physicians, and mental health workers—are intensifying competition for talent, making recruitment a critical challenge for the industry moving forward.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
