The 2025 Business Climate Survey results show both cautious optimism and continued labor force bottlenecks for Idaho employers. Although the state’s labor situation is cooling to a more balanced market than when the survey was initiated in 2023, the inability for some Idaho employers to attract and retain workers in 2025 continues to result in operational gaps.
Fewer employers looking to add jobs; low expectations to reduce headcount
The share of employers expecting to add jobs over the next five years has gradually decreased over the past three surveys but has been offset by an increase in those expecting to maintain employment at current levels (see Figure 1).
Overall, approximately 90% of Idaho employers expect to either maintain or increase their employee count within the next five years. Inversely, around 9% of employers expect their workforce to shrink — a ratio consistent with the survey responses of the past three years.
Figure 1. Idaho employer expectations for job count change over the next five years, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Risk of employee turnover declining, but offset by external factors
In 2023, over half of employers (53%) reported their top business challenge was related to their labor force — either through high employee turnover or the low availability and high cost of labor.
However, labor force issues have declined in recent years and have been distributed among other economic alternatives. For example, the share of employers more concerned with external economic factors outside of their control — such as economic uncertainty or public policy — increased from 32% in 2023 to 40% in 2025.
Figure 2 below highlights how general perceptions of major business challenge groupings have shifted over the past three years.
Figure 2. Most cited number one business challenge by Idaho employers, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Like the past three consecutive years, job switching (workers transferring to another business) was the top reason for employee turnover in 2025, despite decreasing by 5% from 2024. While rates of retirement and leaving for personal reasons increased, job switching was still more than double either of these alternatives.
Job switching can be partially attributed to small businesses struggling to keep up with rising wage rates and higher benefit premiums. Although some employers would like to offer additional benefits to help attract and retain new employees, doing so is cost prohibitive with their low profit margins.
Even for those employers who are able to afford today’s market wage rates, some find job applicants lack the specialized skills needed to fill their current demand. However, in 2025, over seven in 10 employers reported that worker turnover was initiated directly by the employee rather than themselves — whether through job switching, pursuing retirement or voluntarily leaving for other personal reasons (family obligations, education/training, health issues).
In contrast, less than two in 10 employers stated the main reason for employee turnover was at their discretion through either internal job changes or discharge/terminations. The remainder of answers corresponded to “other,” and the responsible party could not be determined.
While still relatively low, the slight uptick in discharges and terminations — from 11% in 2023 to 13% in 2025 — combined with a lower rate of job switching is a sign of a cooling labor market.
Figure 3. Most cited reason for employee turnover by Idaho employers, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Despite having lower evidence of job switching and slightly higher layoffs, the rate of job openings per 1,000 employees continued to hold within a fairly steady range in 2025 — falling from the elevated level of 71 openings in 2023 to 44 in 2024 and slightly increasing again to 50 in 2025, as shown in Figure 4.
Figure 4. Job openings per 1,000 employees, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
The labor market is cooling and stabilizing
Other signs from the survey of a cooling labor market include a lower share of employers with job growth over the most recent five years, a reduced concentration of employers with active postings and a higher share of vacancies due to turnover rather than organic growth.
As shown in Figure 5, from 2024 to 2025, the number of employers with active job postings declined markedly from 52% to 37%, while the share of job postings due to turnover increased from 71% to 80%.
Figure 5. Idaho employment growth, active job postings and postings due to turnover, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Despite a lower share of employers looking to hire in 2025, operational labor force gaps can still be seen with the 30% of job listings that were not filled within 30 days. While this is an improvement from the nearly 60% rate seen in 2023, the extended vacancy of postings continues to be a persistent theme for a majority of Idaho employers.
For employers with active postings unfilled for longer than 30 days, 64% responded this was due to poorly qualified applicants, while 28% responded it was a result of too few applicants (a significant decrease from the 48% seen in 2024).
With the state’s 2025 unemployment rate remaining low at 3.6%, the limited pool of job applicants — especially those who meet desired qualifications — continues to constrain Idaho businesses.
The share of employers with job postings vacant for more than 30 days was comparable whether or not they advertised additional job benefits. The competitive labor market and elevated demand for workers have consistently created ongoing challenges in filling positions in a timely manner.
Figure 6 below breaks down job listings left unfilled after 30 days by employer count, total openings and the lack of qualified applicants.
Figure 6. Jobs unfilled after at least 30 days of being posted, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Gaps in supervisory, leadership and advanced computer skills
Over the next five years, approximately 30% of employers expect the need for supervisory skills, time management and advanced computer skills (such as programming, databases, artificial intelligence) to increase, as shown below shown in Figure 7.
Figure 7. Share of Idaho employers seeing increased skill need over the next five years, 2023-2025
*Note: the need for advanced computer skills in the near future was a new question in 2025.
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
While future expectations showed a general increased need in many skills, employers were also asked about skill proficiency in their current workforce. In 2025, nearly all employers (94%) responded that supervisory, managerial or leadership skills were needed in their current business operations.
Highly trained supervisors are often a significant aspect of employee retention. Despite the strong need, only one in four Idaho employers are confident that at least two-thirds of their current workforce have appropriate supervisory skills.
Regarding advanced computer skills, three out of every four Idaho employers reported less than two-thirds of their workforce had these attributes. When looking by industry, this metric was over 90% of employers in the goods-producing industries and approximately 70% of employers in the service-providing industries.
Figure 8 below highlights skill gaps by showing the share of employers who reported less than one-third of their existing workforce possessed a particular job-related skill (assuming that skill was relevant to the job).
Figure 8. Significant employee skill gaps based on current operational needs, 2023-2025
*Note: the need for advanced computer skills in current business operations was a new question beginning in 2024.
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Although responses have shown a decrease since 2023 in severity, there is still a need for these skills that may potentially widen over the next five years.
Most jobs done on-site, but many employers have remote/hybrid workers
Remote workers spend all of their time at a location different from the jobsite while hybrid work involves a mix of on-site and off-site hours.
Although nearly 90% of workers in Idaho regularly work at their designated job location, the remaining minority are currently employed under a remote/hybrid work arrangement.
In 2025, there were nearly two hybrid workers for every in-state remote worker. The combined ratio of remote and hybrid workers as a share of the total workforce has been fairly consistent each year of the survey, ranging between 9-11% (Figure 9).
While only a small fraction of total statewide jobs are currently remote/hybrid positions, approximately 40% of Idaho employers have at least one employee working remotely and/or in a hybrid capacity. By industry, nearly half of service-providing entities and 30% of goods-producing entities have at least one employee working in a remote or hybrid arrangement.
Figure 9. Share of jobs within Idaho under a remote or hybrid work arrangement, 2023-2025
Source: Idaho Department of Labor, “Business Climate Survey, 2023-2025”
Conclusion
While most employers are not anticipating headcount reductions in the near term, the source of the most significant business challenges continues to shift. Although the availability of workers has become less of a pressure point in 2025 than it was in 2023, employers remain unable to consistently fill their vacant positions within 30 days.
Employers continue to report a shortage of employees with supervisory/leadership skills while the need for advanced computer skills appears to be broadly represented by industry. As technology advances, computer and software skills allow work processes to be done in ways that may provide more flexibility in location and scheduling.
About the Business Climate Survey
The 2025 Business Climate Survey is the third annual poll of Idaho employers conducted by the Idaho Department of Labor to gauge the dynamics of the state’s labor market and general business conditions.
The survey provides real-time job data and offers a platform for employers to voice both the benefits and challenges of doing business in the state. It also helps stakeholders identify strengths and trends directly impacted by the demand and supply of workers within Idaho.
Lisa.Grigg@labor.idaho.gov, regional economist
Idaho Department of Labor
208-696-2256
The Business Climate Survey is 100% funded by the U.S. Department of Labor as part of the Workforce Information Grant (41%) and state/nonfederal funds (59%) totaling $860,595.
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