Five Years Post Covid: Pandemic’s shadow remains cast on the labor market

By Kory Kantenga, Head of Economics, Americas, at LinkedIn

This month marks five years since the COVID-19 pandemic turned the world and the labor market upside down. While we’re currently seeing increasing headlines about fiscal and monetary policy uncertainty, few occurrences in recent decades injected more uncertainty into our lives than the pandemic. The pandemic’s downturn and sharp recovery brought unprecedented unpredictability to the labor market, dramatic impacts to certain worker groups, and new norms, all of which continue to influence current economic and labor market conditions.

In this month’s State of the Labor Market newsletter, we look at current labor market conditions through the lens of the pandemic, including hiring, the availability of remote work, and worker sentiment, which has become markedly pessimistic in the US despite no recession being announced. We also discuss recent research on women in leadership given that the pandemic and its recovery also had meaningful consequences for the state and overall representation of women in the labor market.

Hiring shows signs of stabilizing with notable exceptions 

In the summer of 2020, the pandemic caused a sharp slowdown in global hiring before giving way to a strong and historical recovery in many countries. Over the last five years, we have seen the pace of hiring nosedive (mid 2020), bounce back (late 2020), accelerate (2021), reach a historic peak (2022), and slow just as sharply as it accelerated in many countries (2022-2023) as ongoing talk and fears of a possible recession in many countries loomed for months. In 2024, we saw a more moderate slowdown globally with the exception of Europe, and 2025 so far indicates some potential signs of stabilization. However, the outlook has become increasingly cloudy due to major uncertainty around US trade, fiscal, and monetary policies.

In the Americas, the US LinkedIn Hiring Rate has seen a slight upward turn thus far in 2025, indicating that the slowdown we saw last summer in the US labor market has abated. It is too early to know whether this upward turn will solidify into any sort of recovery. Furthermore, increased uncertainty around trade and fiscal policy (and monetary policy as a result) can easily stall any budding recovery as businesses impose cost control measures and hold out on expanding out of concerns around US tariffs and their consequences. While the Canadian LinkedIn Hiring Rate has not seen a similar upward turn, it shows signs of stabilization nonetheless with smaller declines in recent months. In Brazil and Mexico, the pace of hiring looks to have leveled out since last October. However, an enduring trade conflict with the US threatens to send both Canada and Mexico into recession this year as both countries export large shares of their production to the US. A recession is certain to inflict substantial harm on the labor market by sharply slow hiring, dampening job creation, and increasing unemployment.

In the Middle East and APAC, hiring continues on at a steady, solid pace well above pre-pandemic hiring in emerging markets such as India and the United Arab Emirates. In Australia and Singapore, hiring continues to show signs of slowing at a moderate pace – similar to Canada.

In Europe, the hiring slowdown has endured despite expectations of more robust growth this year, following stagnation in 2024. In Germany, France, and the UK, we still see modest declines in hiring. However, we have seen some early signs of a turnaround in the Netherlands where the LinkedIn Hiring Rate has trended upward slightly so far in 2025.

Pandemic-era remote work availability endures

One of the biggest and most enduring changes from the pandemic occurred in where we work. While remote work and telecommuting existed prior to the pandemic, the pandemic expanded this way of working to an extent arguably unseen before. The sharp recovery from the pandemic downturn supercharged the emergence of remote work as a common way of working as businesses struggled to recruit talent in a robust labor market. Across many countries, we not only saw hiring peak in Spring/Summer 2022 but also saw the availability of remote work peak as well. For example, in the US, prior to March 2020, 1 in 50 job postings on LinkedIn were fully remote. By April 2022 this had skyrocketed and peaked to 1 in 5 postings. Since then, we’ve seen a leveling out of remote work availability to around 1 in 12 job postings being fully remote.

While scaled back from its peak, the endurance of remote work available has persisted in many countries across the globe. Compared to May 2021 (around when vaccines had only just become widely available in the US), we see that some countries today either match or exceed their share of remote job postings on LinkedIn during the pandemic. These countries include Australia, Canada, India, Mexico, Singapore, and the US. Of course, remote work remains relatively rare in Australia and Singapore even compared to peak levels since May 2021.

For remote work, the pandemic has been a double-edged sword. The pandemic led to the emergence of this type of work as both commonplace and widely accepted. However, the roots of the labor market slowdown that likely contributed significantly to the pullback in remote work also lie in the pandemic. The pandemic dislodged supply chains and created inflationary pressures that eventually led to central banks raising interest rates to tame inflation. And these interest rate hikes almost certainly slowed the labor market over the last few years.

Even with the reduction in remote work availability, job seekers remain steadfast in their preference for flexible work options. Remote and hybrid roles continue to attract up to 60% of applications despite being only 20% of job postings in the US, and the share of applications continues to go disproportionately to these types of roles elsewhere as well.

Women’s progress in leadership parity stalls in a slowing labor market

Along with a historically robust labor market and previously unseen availability of remote work, the pandemic recovery also brought record levels of women’s labor force participation in the US. This development is unlikely to be a pure coincidence. As fiscal and monetary stimulus supercharged the recovery, the US labor market became more competitive between employers and more favorable for employees (i.e., tighter). This more favorable labor market drew women into the labor force at a rate increasing faster than that of men. Expansion in the availability of remote work likely drew women into the labor force with a higher probability than men, leading to more demand for and offering of remote work. In fact, women outpace men in terms of the share of applications going to remote roles at 42% compared to 38%. In addition, a tighter labor market likely led to more women in leadership positions. However, as the labor market has loosened since 2022 and remote work availability has declined, we have seen progress slow globally in women reaching parity in leadership with only 30.6% of leadership positions held by women.

My colleagues, Silvia Lara and Matt Baird mapped out women’s progress towards leadership positions from 2015 to 2024. Their work suggests substantial dropoffs in women’s representation at every rung of the seniority ladder as well at higher ages. The industries witnessing some of the largest dropoffs in representation at the leadership level include Financial Services and Real Estate.

In addition to challenges in reaching the leadership level, we also see women disproportionately performing tasks more exposed to GAI. However, we also see skills-based hiring as an opportunity for women in the labor market as a skills-based hiring approach can often expand talent pools to include more women. Widespread use of this approach to considering candidates could improve women’s representation by over 10% in jobs where women are severely underrepresented.

Workforce confidence weakens to record lows in the US

The weakening of the global labor market since its 2022 peak has likely been consequential for current workforce sentiment. Over the last three years, workers have not only seen hiring slow relentlessly (albeit from a historically strong pace) – making it much more difficult to find work – they have also seen their preferred means of working (remote) pulled back. However, we have seen other substantial developments that have likely contributed to weakening workforce confidence, including drawdowns in pandemic-era social safety nets (e.g., the CARES Act) and excess savings as well as substantial and enduring price increases.

In the US, we now see workforce confidence at a level below the early days of the pandemic. It is worth noting that in the early days of the pandemic, we saw two months of mass layoffs unwind a decade of employment growth. And yet, we still see workers today feeling less confident about their ability to obtain and keep their job than they did then despite a low layoff rate compared to historical and pre-pandemic levels.

Beyond the US, we see that workforce confidence has weakened substantially compared to its peak over the last five years. However, confidence remains above pandemic lows in most countries, making low confidence in the US even more notable. Only Canada has seen a similar drop in magnitude compared to the US, however, confidence peaked at a higher level in Canada during the Great Reshuffle so it remains above pandemic lows. Among the countries with workforce confidence reported, only Brazil has maintained the same level of confidence (notably hiring is well above its pre-pandemic pace in Brazil).

For more data and insights on remote work and state of the labor market for women, check out the latest research notes and reports from LinkedIn's Economic Graph team:

• The Remote Work Gap: Steady Demand, Fewer Opportunities
• The LinkedIn AI Talent Index
• Generative AI and Gender: Global Employment Trends
• Skills-Based Hiring: Increasing Access to Opportunity
• The State of Women in Leadership: Global Employment Trends

Many thanks to the LinkedIn Market Research team for Workforce Confidence Index data.