Contract hiring evidence of a cautious jobs market, finds report

According to the data, Ireland’s jobs market is holding up, but confidence is staggered as employers become more cautious.

The Employment and Recruitment Federation, supported by Icon Accounting, has published the Irish Labour Market Annual Survey. This report explores Ireland’s jobs market and the impact that temporary and contract roles are having on the wider landscape. 

The Federation’s research found that while Ireland’s jobs market is holding steady, “employer confidence is becoming more measured, with temporary and contract roles now overtaking permanent recruitment in a clear sign of growing caution across the market”.

The report suggests that this is indicative of a landscape in which organisations are still actively recruiting, but with a far more defensive mindset as they navigate the pressures of rising costs, uncertainty and talent constraints. 

In 2025, permanent recruiting accounted for 44pc of net fee income, while temporary and contracting roles together represented 48pc. The Employment and Recruitment Federation said this is reflective of a move by employers towards achieving greater flexibility and that employers are becoming more selective and more controlled in how they build teams, particularly where longer-term commitments are required.

“That matters because it tells us something important about the broader economy,” said Siobhán Kinsella, the president of the Employment and Recruitment Federation. “Demand is still there, but businesses are making more guarded decisions around cost, growth and commitment.”

Uncertain future

The report comes at a time when the Irish jobs market is experiencing relatively low unemployment, where employment itself is growing steadily, but it is happening in a space where the sentiment is, according to the research, “becoming more mixed”. More than half of the companies who contributed to the report said that they have concerns about the shape of the economy and demand over the next 12 months. 

Issues with attracting and retaining key talent are also weighing on organisations, as seven out of 10 agencies said that skills availability remains the biggest challenge in the market, with the sharpest shortages reported in healthcare, engineering, accountancy and finance, construction, and IT.

Kinsella said: “This is a market where businesses still need people but are under more pressure in how they hire. The challenge now is not simply filling roles. It is balancing growth ambitions with cost control, uncertainty and ongoing difficulty accessing the right skills.

“As students begin reviewing CAO options ahead of the Change of Mind period, the findings also point to a longer-term pipeline issue for Ireland, particularly in areas such as accountancy and finance, engineering, healthcare and technology where demand remains strong and shortages remain persistent.

“That creates a more fragile dynamic underneath the headline numbers. The labour market is still performing, but employers are no longer behaving with the same level of confidence they were a year or two ago.”

Also commenting on the report, David Shanahan, a director at Irish recruitment agency IT Search, which is a member of the Vertical Markets Group, noted that his own organisation’s research found that the volume of tech roles across the Irish market have increased from 6,082 in March 2025 to 6,810 in March 2026. 

He noted, however, that there are some “important nuances” to make note of. “In areas such as data and cybersecurity, hiring is heavily contract focused. However, across AI, software engineering and DevOps, hiring is more evenly split than it might appear.

“Contract roles are largely tied to project and programme delivery, while permanent hiring is driven by product-led and commercial software companies, where the focus is on building and scaling their own technology platforms.”

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