Best US States to Hire in 2025: Top 10 States for Employers

Hiring in 2025 is not just about filling roles, it’s about location strategy, labor market forecasting, and matching employer needs with workforce expectations. The employment landscape across the United States has shifted dramatically since 2020, with states adapting at different speeds to the post-pandemic economy, remote work, and changing cost-of-living dynamics. Some states have risen as clear leaders for hiring, while others continue to struggle with high costs, workforce shortages, or economic stagnation.

In this guide, we’ll explore the top-performing states for hiring in 2025, the states employers are steering away from, and how emerging trends, like remote work and regional affordability, are reshaping the national hiring map.

What Are the Best States to Hire in 2025?

In 2025, the best states to hire are those that strike a balance between wage competitiveness, job market growth, affordability, and workforce quality. Employers are increasingly favoring states with strong economic fundamentals, steady job creation, and business-friendly policies.

Which states offer the highest salary for job seekers?

While high salaries alone don't guarantee a favorable hiring environment for employers, they are a major draw for job seekers, and states that combine good pay with manageable costs tend to attract the best talent.

Below, we break down the 10 best states for high-paying job opportunities this year, and highlight the cities within them that are drawing job seekers and employers alike.

1. Washington

Washington remains a consistent leader when it comes to high salaries across tech, engineering, and biotech. Thanks to its lack of state income tax and concentration of high-paying employers like Amazon, Microsoft, and Boeing, job seekers here routinely earn wages well above the national average.

Seattle continues to be the epicenter of Washington’s economic boom. In 2025, the median tech salary in Seattle exceeds $135,000, and demand for roles in cloud computing, AI, and cybersecurity remains extremely high. Despite high housing costs, job seekers are drawn to Seattle for its stability, innovation ecosystem, and strong labor protections.

2. Massachusetts

Massachusetts blends high wages with a brainpower-driven economy. Boston remains one of the best U.S. cities for jobs in healthcare, biotech, education, and consulting.

Salaries in Boston are driven by institutions like Harvard, MIT, and Massachusetts General Hospital, alongside biotech heavyweights like Moderna and Biogen. In 2025, professionals in life sciences are commanding median salaries upwards of $125,000, with many tech-adjacent jobs offering even more.

Boston also leads in workforce development and job readiness, making it a destination not only for high earners, but also for employers seeking top-tier, specialized talent.

3. California

California still reigns in terms of overall compensation, especially for roles in tech, entertainment, and venture-backed startups. In Silicon Valley, the average software engineer earns over $150,000, with equity and benefits often pushing total compensation significantly higher.

San Diego and Los Angeles have also emerged as hotspots for jobs in clean energy, digital media, and life sciences, offering high wages with slightly more manageable living costs compared to the Bay Area.

However, the state’s high taxes and cost of living are prompting both workers and employers to consider remote-first strategies or regional offices in lower-cost cities.

4. Colorado

Colorado offers a strong salary-to-cost-of-living ratio compared to other major tech hubs. Denver, in particular, has established itself as a dynamic center for technology, fintech, and aerospace innovation.

In 2025, software developers, digital marketers, and data analysts in Denver are earning median salaries between $90,000 and $110,000. While housing prices have increased in recent years, they remain lower than in cities like San Francisco or Seattle, allowing wages to stretch further.

The state's appeal is enhanced by its outdoor lifestyle, a highly educated workforce, and ongoing investments in public transit and infrastructure, factors that continue to attract both job seekers and employers.

5. Utah

Utah continues to rise as a competitive employment destination, fueled by strong growth in tech, financial services, and logistics. Anchored by Salt Lake City and the broader "Silicon Slopes" region, the state has attracted a wave of startups and established firms, including those relocating from California and Texas.

In 2025, software engineers and cybersecurity analysts in Utah routinely earn salaries exceeding $100,000, especially in mid- to senior-level roles. While Salt Lake City has seen rising housing prices, the cost of living remains notably lower than in coastal markets like San Francisco or New York.

Utah’s favorable tax policies, flat income tax, and significant investments in workforce training have strengthened its appeal to both employers and skilled workers.

6. North Carolina

North Carolina has emerged as a premier destination for employers and skilled professionals alike. Raleigh’s Research Triangle, home to world-class universities and research institutions, has become a national leader in tech, biotech, and finance. In 2025, median tech salaries in Raleigh commonly exceed $100,000, supported by sustained growth in software development, data science, and life sciences.

Charlotte continues to serve as the Southeast’s financial capital, ranking just behind New York in banking assets. It hosts the headquarters or major operations of institutions such as Bank of America, Truist, and Wells Fargo. High-paying roles in risk management, IT security, and fintech innovation are expanding rapidly.

North Carolina’s 2.25% flat corporate tax rate, robust infrastructure, and deep talent pool make it especially attractive to companies relocating from higher-cost states in the Northeast. Workforce development programs and public-private partnerships further enhance the state’s competitive edge in 2025.

7. Texas

Texas offers a powerful combination of no state income tax, strong business incentives, and a rapidly expanding job market.

Austin, commonly called "Silicon Hills", continues to be a major tech hub. In 2025, software engineers and product managers routinely earn $120,000–$140,000 in base pay, with total compensation frequently exceeding $150,000. The city also offers a growing biotech and life sciences presence.

Dallas and Houston have seen impressive growth in healthcare, energy, finance, and logistics. Houston, anchored by the Texas Medical Center, the world’s largest medical complex, is experiencing marked expansion in healthtech, biotech, and biomedical research, including major proposed biomanufacturing facilities.

With comparatively lower housing costs than coastal metros and continued infrastructure expansion especially in logistics, energy, and health sectors, Texas remains a top destination for job seekers and remote workers alike.

8. New Jersey

Often overshadowed by its neighbor across the Hudson, New Jersey ranks among the top U.S. states for median wages, especially in pharmaceuticals, financial services, and legal professions. Jersey City and the greater Newark metro area benefit from proximity to New York City, attracting firms and professionals seeking slightly more accessible housing and lower operating costs.

Major employers such as Merck, Johnson & Johnson, and Prudential support strong demand for talent in R&D, compliance, marketing, and healthcare administration. In 2025, median salaries for professionals in these sectors range from $90,000 to $120,000, with senior roles often exceeding that.

New Jersey also offers the advantage of commuter-friendly public transportation, including PATH and NJ Transit, and suburban lifestyle options across Middlesex, Essex, and Union counties. While housing costs in cities like Jersey City are approaching NYC levels, New Jersey remains a compelling location for high-earning professionals seeking career growth near the financial capital of the world.

9. Virginia

Virginia, particularly Northern Virginia, remains a national leader in cybersecurity, defense contracting, and federal consulting. Anchored by Arlington and Fairfax County, the region houses major employers such as Booz Allen Hamilton, Northrop Grumman, General Dynamics, and Amazon HQ2, all benefiting from proximity to Washington, D.C.

In 2025, software engineers, cybersecurity analysts, and IT specialists in this region earn median salaries ranging from $105,000 to $130,000, with federal security clearances and specialized certifications commanding even higher compensation. The area's strong demand for tech talent, coupled with robust benefits and long-term job stability, makes it a top destination for skilled professionals.

Richmond, Virginia’s capital, is growing steadily in finance, logistics, and healthcare administration, supported by institutions such as Capital One and the Federal Reserve Bank of Richmond. The city offers competitive pay and a relatively affordable cost of living, making it an attractive alternative to larger urban centers for mid-career professionals and remote workers.

10. Illinois

Chicago remains one of the United States’ most dynamic labor markets, driven by a diversified economy that spans consulting, law, healthcare, data science, finance, and logistics. Its strategic central location, transportation infrastructure, and deep professional talent pool make it a magnet for national employers and high-growth startups.

In 2025, professionals in analytics, legal services, consulting, and healthcare administration routinely earn $100,000 or more, with specialized and senior roles commanding well above that.

While property taxes and housing costs have trended upward in recent years, Chicago’s overall cost of living remains significantly lower than in coastal hubs like New York or San Francisco. This combination of high-paying professional opportunities and relative affordability continues to attract both companies and top-tier talent seeking career advancement without coastal price tags.

What are the best cities for jobs in 2025?

In 2025, the best cities for jobs are those that offer more than just employment, they offer sustainability, affordability, industry diversification, and workforce readiness. These metros have positioned themselves as economic powerhouses through infrastructure investments, talent development, and business-friendly policies. For job seekers and employers alike, choosing the right city isn’t just a matter of salary, it's about long-term opportunity.

Here are 10 of the best U.S. cities to find jobs and hire top talent in 2025, based on job growth, industry strength, and overall market competitiveness.

1. Austin, Texas

Austin remains a premier destination for high-tech talent and corporate expansion in 2025. The city has solidified its status as a national tech capital, fueled by the continued growth of companies like Apple, Oracle, Tesla, and a robust SaaS ecosystem. Its lack of state income tax, coupled with relatively high salaries, especially in AI, clean tech, and software engineering, has attracted both startups and established firms relocating from higher-cost states. While housing costs have risen significantly over the past five years, compensation in mid- to senior-level tech roles (often exceeding $120,000) continues to offset affordability concerns, sustaining Austin’s labor market momentum.

2. Raleigh, North Carolina

Raleigh has fully matured into a high-growth job market anchored by the Research Triangle Park and a thriving academic corridor linking Duke, UNC-Chapel Hill, and NC State. In 2025, the city is particularly strong in biotechnology, digital health, and enterprise cloud services.

Employers benefit from low business costs and access to highly educated STEM graduates, which has spurred the growth of both research-intensive firms and entrepreneurial ventures. With a balanced cost of living and improving infrastructure, Raleigh now rivals larger metros in terms of job opportunity and quality of life, especially for professionals in high-demand sectors.

3. Salt Lake City, Utah

Salt Lake City has emerged as a national economic contender, driven by rapid expansion in fintech, health tech, and logistics. The region, branded “Silicon Slopes,” continues to attract venture-backed startups and major employers due to its cost-effective operations and young, educated workforce. In 2025, job growth in Salt Lake City ranks among the top ten nationally, with especially strong momentum in remote-friendly roles and co-working infrastructure. Affordable housing relative to other tech hubs and a high quality of life contribute to strong talent retention and sustained economic diversification.

4. Tampa, Florida

Tampa has transformed into a financial and healthcare services hub for the southeastern United States. In 2025, its growth is bolstered by a wave of corporate relocations from the Northeast, driven by Florida’s business-friendly tax environment and lower cost of living. Financial firms, healthcare administrators, and fintech startups have contributed to a rise in professional salaries, particularly in project management and digital marketing. Tampa’s coastal lifestyle and pro-growth state policies continue to attract both remote professionals and operational headquarters, positioning it as a viable alternative to legacy finance markets.

5. Nashville, Tennessee

Nashville blends a dominant healthcare sector with a thriving creative economy. In 2025, major employers like HCA and Vanderbilt drive strong demand in health tech, while music, media, and design fuel growth in creative industries. Affordable real estate and a pro-business climate continue to attract both talent and corporate investment.

6. Atlanta, Georgia

Atlanta’s economy remains highly diversified, led by logistics, fintech, and media. With corporate anchors like Delta and Home Depot and a strong startup scene, the city offers robust opportunities in data, supply chain, and sales. Its large workforce, infrastructure, and inclusive hiring practices solidify its national status in 2025.

7. Phoenix, Arizona

Phoenix is a rising tech and manufacturing hub, bolstered by major semiconductor and solar investments from Intel and TSMC. Strong job growth in engineering, logistics, and real estate reflects its economic momentum. Despite rising costs, it remains more affordable than West Coast alternatives.

8. Denver, Colorado

Denver continues to attract hybrid and remote professionals with strong hiring in clean energy, edtech, and health innovation. Its educated workforce, mountain lifestyle, and thriving startup culture support ongoing job growth. While housing is pricey, quality of life keeps the city competitive.

9. Charlotte, North Carolina

Charlotte holds its place as a top U.S. banking center, home to Bank of America and a growing fintech sector. In 2025, demand is high for analysts, developers, and compliance professionals. Affordable living, state incentives, and a growing young workforce make it a magnet for employers.

10. Columbus, Ohio

Columbus is transforming into a Midwest tech hub, fueled by investments from Intel, Google, and Amazon. Its affordability, strategic location, and educated workforce—thanks to Ohio State—are attracting growth in edtech, logistics, and healthcare. The city offers upward mobility and long-term economic potential.

How do states to hire compare in terms of unemployment rate?

The unemployment rate remains a key indicator of labor market health. In early 2025, the national unemployment rate is hovering around 4%, but there’s considerable variation among states.

Nebraska, North Dakota, and South Dakota report some of the lowest unemployment rates, often under 3%, due to their smaller populations and steady economic output. While low unemployment may indicate a strong local economy, it can also signal labor scarcity, making it harder for employers to find available talent.

Idaho, Utah, and Indiana maintain an optimal middle ground: moderate unemployment rates that reflect healthy competition without signaling extreme worker shortages. For employers looking to scale efficiently, these are often the most balanced states for hiring in 2025.

What Are the Worst States for Employers in 2025?

Not all states make it easy to hire in 2025. Employers are increasingly avoiding regions where workforce shortages, regulatory burdens, or cost-of-living pressures make it difficult to attract or retain talent. High turnover, inflated wages, and housing challenges are common pain points in underperforming hiring markets.

The Worst U.S. States to Hire in 2025

Hiring in the U.S. has always been shaped by regional economics, but in 2025, the gaps between the best and worst states to hire are wider than ever. While some states lead the charge with strong labor market growth, affordable costs, and workforce development programs, others struggle under the weight of high living expenses, overregulation, and persistent labor shortages.

In order to determine the best and worst states for hiring, we considered key factors such as average annual wage, unemployment rate, cost of living, job openings per capita, and employer burden, based on data from the Bureau of Labor Statistics and Gallup's latest workplace analysis.

Here are the 5 states where hiring in 2025 is proving most difficult, and why smart employers are rethinking their hiring strategy in these locations.

1. New York

New York’s global reputation and access to a large labor force would suggest it’s among the top states to hire. However, in 2025, it continues to rank as one of the worst states for employers, especially in New York City and surrounding metro areas. Hiring costs are driven up by high salaries, expensive office space, and mandatory employee benefits. The state also ranks near the bottom in annual job growth and labor force participation.

Despite being one of the best cities for jobs in finance and law, employers must navigate dense regulatory frameworks, rising wage mandates, and increased pressure for inclusive hiring under new state laws. Job seekers, while numerous, often leave for more affordable states with better quality-of-life factors and stronger workforce development programs.

2. Connecticut

Despite its proximity to New York and Boston, Connecticut continues to face structural challenges in 2025, including sluggish economic growth, an aging workforce, and persistent labor shortages in key industries like healthcare and technology. While the state has made efforts to attract remote workers, younger professionals continue to leave in search of better career prospects and affordability. As a result, employers struggle to find qualified candidates, particularly for roles requiring technical or clinical expertise.

Although Connecticut offers a high quality of life in many respects, its elevated business costs and modest population growth contribute to one of the weakest labor markets in the Northeast, with workforce participation and job creation trailing national benchmarks.

3. Hawaii

While Hawaii offers world-class natural beauty, it presents significant hiring challenges in 2025 due to its geographic isolation, high cost of living, and narrow economic base. The state remains heavily reliant on tourism, which contributes to seasonal labor volatility and limits opportunities for stable, year-round employment.

Employers often struggle to attract and retain qualified candidates, particularly for technical, remote-eligible, or healthcare roles, due to relocation costs, time zone constraints, and limited local talent pools. Despite state efforts to incentivize remote work and high-skilled migration, persistently high housing costs and infrastructure limitations continue to impede long-term workforce development.

4. Alaska

Alaska continues to pose significant hiring challenges in 2025 due to its low population density, geographic isolation, and infrastructure limitations. While the oil and gas sector supports regional employment, the broader labor market remains cyclical and sector-dependent, with an unemployment rate consistently above the national average.

In Alaska employers face difficulty sourcing skilled workers locally, particularly in healthcare, construction, and education, due in part to lower levels of educational attainment and high out-migration of college graduates. Business costs are elevated by logistical complexity, high import prices, and limited access to centralized supply chains, making Alaska one of the most operationally expensive states for smaller firms seeking to establish or expand.

5. Rhode Island

Despite ongoing economic development efforts, Rhode Island remains a difficult environment for hiring in 2025 due to its limited labor pool, persistent skill shortages, and modest population growth. Employers frequently report challenges in sourcing talent for technical and clinical roles, particularly in IT, engineering, and healthcare.

In Rhode Island many businesses are forced to recruit across state lines or shift toward remote hiring models to meet staffing demands. While the state has invested in digital infrastructure and workforce development, these efforts have yet to meaningfully expand the available talent base. Slower wage growth and competition from nearby metropolitan areas like Boston further complicate retention especially among younger, high-skill workers.

What makes a state one of the worst states to hire?

Several factors combine to make a state unfriendly to employers looking to expand their teams. These include:

• Overregulation: Excessive red tape, complex labor laws, or aggressive litigation environments (often found in states like California or New York).
• High cost of living: When employees demand higher wages just to cover basic living expenses, it inflates payroll costs without necessarily increasing productivity.
• Outmigration: States with a shrinking labor force, due to high taxes, limited housing, or inadequate infrastructure, make it hard to build and retain a team.

The cost of doing business, combined with steep housing prices and increasingly rigid employment laws, pushes many employers to look elsewhere.

How does the job market in expensive states affect hiring?

In high-cost states, employers face a triple challenge: higher salaries, increased benefit expectations, and tighter margins. While large corporations can offset these costs, small and mid-sized businesses often cannot.

In California, for instance, the tech talent pool remains strong, but the cost to recruit and retain an engineer has ballooned. With average rents in metro areas well above national norms, job seekers are demanding remote flexibility or relocation incentives. This puts pressure on employers to offer hybrid roles, which can create internal culture and management challenges.

Additionally, high taxes on employers and workers alike have incentivized relocations to lower-cost states, driving employers to rethink location strategies entirely.

What are the challenges faced by employers in these states?

Challenges in less favorable hiring states include:

• Difficulty sourcing local candidates with competitive compensation expectations
• High turnover due to worker dissatisfaction with living costs or limited career mobility
• Difficulty complying with evolving state-specific labor laws
• Risk of litigation, especially in states with strong employee protection laws

In these environments, hiring is more than a challenge, it’s a cost center. Employers are forced to devote more resources to recruitment, legal compliance, and retention, leaving less margin for growth.

How Does Remote Work Impact Hiring in 2025?

Remote work remains one of the most influential factors shaping the hiring landscape in 2025. With millions of professionals now preferring hybrid or fully remote roles, employers have gained access to national talent pools, while also facing new competition and infrastructure challenges.

What are the benefits of hiring remote workers?

Hiring remote workers allows employers to:

• Expand talent reach beyond regional labor shortages
• Reduce office and operational costs
• Offer flexible arrangements that attract high-performing candidates
• Retain employees who prioritize lifestyle and geographic freedom

For roles in IT, design, marketing, and customer service, remote hiring offers a major strategic advantage. Employers in expensive states can tap into more affordable labor markets without compromising on skills.

Which states have the best infrastructure for remote work?

In 2025, states with strong broadband coverage, modern digital infrastructure, and affordable living standards are emerging as remote work strongholds. Colorado, North Carolina, and Texas continue to lead, offering a balance of urban amenities, tech accessibility, and pro-remote workforce culture particularly in cities like Denver, Raleigh, and Austin.

Traditionally rural states such as Maine and Vermont are also attracting remote professionals seeking quieter lifestyles and lower housing costs, supported by expanding broadband networks and remote worker incentive programs. Meanwhile, Iowa, Montana, and New Mexico are leveraging federal infrastructure funds to improve rural connectivity and support distributed workforce development, leading to modest growth in tech-driven remote hiring.

While remote job postings are distributed nationally, workers are increasingly relocating to states that offer the digital tools, community infrastructure, and quality of life needed to sustain long-term remote careers.

Are remote workers more likely to find job openings in certain states?

Yes. Job boards and recruiting platforms show that remote-friendly states have the most postings for distributed roles. Florida, Georgia, and Arizona have shown significant increases in fully remote listings across tech, marketing, and healthcare. These states are often preferred by job seekers for their climate, tax benefits, and affordability.

At the same time, remote roles originating in California or New York are offering higher salaries, making them attractive to out-of-state workers who can live in low-cost regions but earn premium pay.

What Is the Job Market Outlook for 2025 and Beyond?

The labor market in 2025 continues to evolve, shaped by technology, demographic shifts, and economic volatility. Employers must anticipate changes in labor supply, compensation trends, and workforce expectations to build future-ready hiring strategies.

How is the unemployment rate expected to change in 2025?

While national unemployment rates have stabilized around 3.7%, some states will see tighter labor markets as demand for skilled labor outpaces supply. States like Texas and Florida are expected to maintain unemployment rates near 3.5%, supported by strong population growth, business expansion, and a diversified job base in sectors like tech, healthcare, and logistics.

In contrast, states with aging populations and continued outmigration, such as West Virginia and Connecticut, may face growing labor market pressure due to low labor force participation, skill shortages, and difficulty attracting younger, mobile workers. For employers, the key challenge is to align recruitment and retention strategies with these regional disparities, whether by expanding remote work options, offering relocation incentives, or investing in local workforce development.

What are the growth rates in the labor market for various states?

According to U.S. Bureau of Labor Statistics (BLS) projections and state-level economic development reports, the following states are leading labor market growth in 2025:

• Utah

Utah continues to rank among the top states for job growth in 2025, driven by expansion in technology, particularly SaaS and fintech, clean energy, and professional services. Its young, well-educated population and high in-migration rates contribute to a dynamic and competitive labor market that supports rapid economic scaling across both urban and suburban areas.

• Texas

Texas remains a powerhouse for labor market expansion, with strong job creation in infrastructure, professional services, technology, and logistics. Major economic centers such as Austin, Dallas–Fort Worth, and Houston are leading this growth. A business-friendly tax structure, including no state income tax, combined with significant population inflows, continues to reinforce Texas's position as a national hiring hub.

• Florida

Florida is also experiencing substantial employment growth, particularly in healthcare, logistics, and education. The state’s aging population is driving demand in the medical and service sectors, while infrastructure development and strong domestic migration are fueling job creation across metro areas like Tampa, Orlando, and Jacksonville.

• Arizona

Arizona is seeing accelerated labor market growth in 2025, largely due to massive investments in semiconductor manufacturing, including multibillion-dollar facilities from TSMC. In addition, the Phoenix metro area has emerged as a hub for clean energy, aerospace, and data infrastructure. Remote-friendly tech roles are expanding as in-migration from California and state economic incentives attract both talent and capital.

• Tennessee

Tennessee is gaining momentum through sustained growth in advanced manufacturing, automotive production, and financial services. Nashville and Chattanooga are key metropolitan drivers of this expansion. State-supported workforce development programs are helping to close skill gaps, making Tennessee increasingly competitive for employers seeking to scale high-demand operations.

These states combine favorable demographics, strong migration trends, and targeted business incentives,

How can employers adapt their hiring strategy for future job openings?

To stay competitive, employers should:

• Invest in workforce analytics to anticipate talent shortages
• Focus on employer branding in affordable, fast-growing states
• Build hybrid-friendly policies that align with job seeker expectations
• Explore relocation and training incentives offered by pro-business states
• Use geographically distributed hiring strategies to balance cost and quality

In short, forward-looking hiring in 2025 is about flexibility, adaptability, and regional awareness.

Which States Have the Shortest Job Seeker Shortage?

As of 2025, states with the shortest job seeker shortages that is, those with a relatively balanced ratio of open positions to available workers, tend to be those with larger labor pools, higher workforce participation rates, and urban economic density. These include:

• California – Despite its high cost of living, California’s large, diverse workforce and strong higher education system (e.g., UC and CSU networks) supply talent in tech, media, and biotech.
• New York – Especially in metro areas like NYC, the labor market remains deep, particularly in legal, financial, and creative sectors.
• Illinois – With Chicago as a central hub, Illinois maintains a well-educated and diverse labor pool across healthcare, logistics, and professional services.
• Massachusetts – Driven by institutions like Harvard and MIT, Massachusetts sustains a strong pipeline of STEM and healthcare talent, keeping job shortages relatively low in Boston and Cambridge.

These states still face hiring challenges in specific industries (e.g., skilled trades, nursing), but their overall job seeker availability is stronger than in fast-growing Sun Belt or Mountain West states.

What are the demographics of job seekers in states with a shortage?

States with the job seeker shortages tend to have:

• Large urban populations
• Growing numbers of college graduates
• Influxes of migrants or remote workers
• Investment in technical education and workforce development

Michigan, Ohio, and Pennsylvania, for example, are seeing rebounding labor markets thanks to tech re-skilling programs, community college partnerships, and resurgent manufacturing.

These states are drawing mid-career professionals and new graduates alike, making them attractive for employers looking for well-trained, affordable talent.

How do affordable states compare in addressing workforce shortages?

Affordable states like Alabama, Indiana, and Missouri have used tax credits, relocation bonuses, and job training incentives to draw employers and workers alike. These programs directly address workforce shortages while also keeping the cost of employment low.

Employers that partner with state programs and community colleges in these areas can build deep hiring pipelines, often at significantly lower cost than in coastal states.

What strategies can employers use to attract top talent in these states?

Employers can stay ahead of the curve by:

• Collaborating with state economic development offices
• Offering career progression opportunities and clear skill-building paths
• Providing student loan repayment assistance or tuition support
• Publicizing hybrid/remote flexibility, even for in-state hires

In markets where the labor pool is growing, branding, benefits, and purpose-driven messaging can help employers stand out.

What Are the Most Affordable States for Employers?

As of 2025, the most affordable states for employers are those that combine low tax burdens, moderate wage floors, competitive utility and real estate costs, and employer-friendly regulatory environments. Leading states in this category include:

• Texas – No state income tax, low corporate regulation, and access to large, cost-effective labor pools.
• Tennessee – No personal income tax and relatively low property and corporate tax rates; favorable for logistics and healthcare sectors.
• Indiana – Low cost of labor, utilities, and real estate, with a flat 4.9% corporate tax rate and strong support for manufacturing employers.
• North Carolina – Flat corporate income tax (2.5% in 2025), strong infrastructure, and cost-effective workforce development programs.
• Utah – Competitive wages, low unemployment insurance tax rates, and efficient permitting and compliance processes.

These states consistently rank high in business climate indexes due to their balance of low costs and growing labor markets.

How to Hire Employees in the Best US States for Employers

Hiring employees in the best U.S. states—like Texas, North Carolina, and Utah—offers more than access to top talent. These states combine favorable tax laws, lower cost of living, and fast-growing labor markets, making them ideal for scaling teams cost-effectively. However, compliance, payroll, and benefits management can become overwhelming across multiple jurisdictions.

That’s where an Employer of Record (EOR) comes in. An EOR enables companies to hire full-time employees without setting up a local legal entity. It handles HR compliance, contracts, taxes, and ongoing employment obligations—so you stay focused on growth.

Whether you're expanding your footprint in Austin, tapping into the biotech talent in Raleigh, or hiring engineers in Salt Lake City, an EOR ensures you do it legally and efficiently.

How to Hire Contractors in the Best US states to hire in?

Hiring contractors in states like Utah, North Carolina, and Indiana can offer agility and savings, but only if done compliantly. A Contractor of Record (CoR) ensures your freelance workforce meets local tax and labor laws. It handles contracts, payments, and risk, allowing you to scale projects without HR bottlenecks.

How does the cost of living affect hiring in different states?

Cost of living significantly shapes hiring outcomes, influencing both salary expectations and workforce mobility. In states with a low cost of living, like Indiana or Tennessee, employers can offer competitive wages that stretch further for workers, keeping overhead low and improving retention in roles that are hard to fill elsewhere. Conversely, in high-cost states such as California and New York, higher baseline expenses force employers to offer elevated salaries, often without proportional gains in productivity.

States with moderate costs, including Florida and Arizona, strike a more sustainable balance. These states tend to attract domestic migrants, reduce turnover, and help employers hire faster, especially in logistics, healthcare, and customer service. The cost of living thus remains a crucial differentiator in labor market competitiveness across the U.S.

Which states are considered least expensive for businesses to operate?

In 2025, states like Wyoming, South Dakota, Tennessee, Texas, and Indiana stand out as the most affordable for business operations. These states offer low or no corporate and personal income taxes, minimal regulatory burdens, and cost-effective labor and utilities, making them ideal for small and mid-sized enterprises and expanding firms.

Each of these states combines fiscal efficiency with business-friendly environments, such as streamlined permitting, low unemployment insurance costs, and flexible labor laws, allowing employers to scale operations with lower risk and higher margins than in more regulated, high-cost states.

What financial incentives do affordable states offer to employers?

Affordable states frequently enhance their competitiveness by offering financial incentives tied to job creation, capital investment, and workforce development. Programs like North Carolina’s JDIG and Indiana’s Next Level Jobs provide direct support for expansion, upskilling, and facility construction.

Additionally, many states offer tax credits, infrastructure assistance, and Opportunity Zone incentives aimed at revitalizing distressed areas and attracting employers to rural or underdeveloped regions. These tools reduce upfront costs, mitigate long-term risks, and help employers access targeted talent pipelines.