Locally and across the country, businesses are facing the obstacles of today’s labor market. Competition for jobs, along with labor shortages and changing priorities for employees and employers, have reshaped the staffing process in nearly every industry. Challenges such as limited applicant pools, skills gaps, and salary expectations have made it difficult for local businesses to engage suitable talent. With the current labor market being tense on both ends, companies struggle to find suitable candidates, while workers face limited opportunities. In this market, traditional hiring methods no longer suffice. Instead, adopting transparent, strategic, and applicant-focused recruitment strategies is essential to the growth and success of Richmond’s businesses.  

The State of the Richmond Labor Market

• The unemployment rate in Richmond continues to climb, hitting 3.5% in June of 2025. (Axios). 
• 43% of Richmond businesses reported plans to increase hiring in 2025, yet only 24% are currently hiring, half the number of businesses that were actively hiring in 2024. (InUnison State of Local)
• Richmond lost 1,100 nonfarm jobs in June, reflecting broader statewide trends of rising unemployment and a slowing market. (U.S. Bureau of Labor Statistics)
• Virginia’s minimum wage will rise by $0.36 to $12.77 in 2026. Despite this, many job seekers are looking for higher pay, with Axios pointing out that a significant number of applicants now target $20 an hour instead of the usual $15. Raising the minimum wage has the potential to substantially increase a business’s payroll costs due to a phenomenon known as wage compression. Wage compression happens when the pay gap between entry-level employees and more experienced staff narrows, often requiring pay adjustments across all positions and increasing overall payroll costs.
• The Richmond Federal Reserve Bank’s Survey of Employer Recruiting Behavior found that companies are increasing their recruiting tactics, yet are still struggling to meet job seekers’ expectations for compensation and flexibility.

How Richmond Businesses Are Adapting

Effective hiring strategies are essential for remaining competitive in attracting talent. Richmond area businesses are having to adapt to the ever-changing landscape of hiring to ensure their business can be adequately staffed and successful. These adaptations include:

• Flexible Scheduling and Work-Life Balance: Job flexibility continues to attract candidates in today’s work environment. When possible, offer a hybrid or flexible work schedule to better accommodate employees’ personal responsibilities. By promoting work-life balance and prioritizing employee well-being, organizations not only attract suitable talent but also improve employee retention.
• Transparency in Wages and Benefits: While Virginia does not currently require businesses to disclose compensation during the hiring process, many employers have begun to share pay ranges to promote openness. This transparency also extends to benefits, as employers have turned to having open conversations about retirement plans, health coverage, and leave policies to encourage employee understanding and satisfaction.
• New Recruitment Approaches: Many local businesses now seeworkforce initiatives and hiring partners as essential resources. Richmond companies have achieved success through collaborations with programs like WorkforceCoalitionRVA, Network2WorkRVA, and CARITAS Works. These initiatives help job seekers gain relevant skills through education, training, and job search support, leading to employment. Simultaneously, these partners serve as valuable resources for employers, assisting them in finding and hiring qualified candidates. 
• Focusing on Candidate Experience: Building a candidate-centered application process begins with transparency. Posting detailed, clear job descriptions and explaining success and growth prospects, along with showcasing your culture and values, attracts candidates. A talent-focused process combined with simplicity and consistent communication makes candidates feel valued, lowers entry barriers, and strengthens your workforce (Rolling Stone).

Insights from a Local Hiring Expert

Sandbox, a Richmond-based consulting firm specializing in recruiting, has firsthand experience helping small and mid-sized businesses stay competitive in a tight labor market. It encourages companies to focus on culture, speed, and candidate experience to remain competitive during the hiring process, something larger Richmond companies can’t always deliver well. Sandbox advocates for transparency and authenticity in the hiring process, urging companies to overcommunicate with applicants and shorten the application process to provide a top-notch application experience. 

When attracting talent, Sandbox suggests highlighting your company’s value proposition: “If you can’t compete on pay, lean into what smaller orgs often do better: collaborative culture, tighter teams, and hands-on leaders who are invested in their people,” says Emilie Laliberte, SHRM-CP, manager of recruiting at Sandbox.

Showcasing perks, growth opportunities, and impact go a long way in attracting top talent, without adding big costs. Laliberte’s biggest advice for staying competitive in a challenging hiring environment is to make sure every aspect of the hiring process reflects your brand. Everything from the job posting to the offer letter shapes how candidates see you, so be intentional with your communication, transparency, and self-promotion.

Key Takeaways

• The Richmond labor market is rapidly changing, with rising unemployment, fewer businesses actively hiring, skill gaps remaining in the applicant pool, and job seekers’ priorities shifting.
• Utilizing strategic hiring techniques, such as offering flexible scheduling, promoting transparency around pay and benefits, partnering with local workforce initiatives, and providing candidate-focused application processes, can help employers attract and retain top talent.
• Compete where you can win by outshining the hiring competition through transparency, authenticity, flexibility, and culture.
• Utilizing local resources and partners during the hiring process helps to find well-suited candidates who will aid in the long-term growth and success of a business.