Recent federal agency layoffs have created a surge of experienced workers entering the private job market, potentially benefiting employers seeking skilled talent, according to data released Tuesday.
The iCIMS Insights April 2025 Workforce Report reveals job applications rose 24% and job openings increased 7% compared to last year, defying earlier predictions of market contraction.
“The recent wave of federal workforce reductions is introducing a surge of experienced, highly skilled talent from public sector jobs into the private sector,” said Stephanie Sansone, director of talent acquisition at iCIMS.
The report, based on data from thousands of employers using the iCIMS platform, indicates the labor market remains resilient despite ongoing volatility.
Finance sector shows growth
Financial services employers saw particularly strong candidate interest, with job openings attracting an average of 46 applicants in Q1 2025 — a 13% increase from the previous year’s 40 applicants per opening.
This surge in applications coincides with significant reductions in federal agencies, though the report does not specify which departments experienced the heaviest cuts.
Healthcare sees modest gains
Private healthcare facilities may benefit from public sector healthcare reductions, the report suggests. Healthcare applications increased 17% in March, while openings rose 2% and hires grew 1%.
Despite only minimal increases in actual hiring, the time to fill healthcare positions remained relatively stable, increasing just one day from 39 to 40 days year-over-year.
Education faces continued challenges
While applications for education roles increased 4% from March 2024, both openings and hires declined, dropping 6% and 4% respectively. The hiring timeline for education positions continues to lag behind other sectors at 51 days.
This presents a potential opportunity for schools struggling to hire qualified teachers, particularly in STEM fields, to recruit from the pool of displaced federal workers.
D.C. area sees application surge
Applications in the Washington, D.C. area have spiked 37% year-over-year, significantly outpacing the national average increase of 24%. This suggests many federal workers are transitioning to private sector roles while remaining in the region.
Bob Lavigna, senior fellow for public sector at UKG, an iCIMS partner, noted that federal employees face unique challenges when switching sectors.
“Displaced federal employees have a lot to offer but will need to translate their federal experience into descriptions that non-government employers will understand,” Lavigna said. “They will need to communicate not just the tasks they performed but the outcomes they achieved.”
The full report provides additional workforce trends and analysis of how recent federal government reductions are reshaping the labor market.
