According to the data, the Irish job market is stable, but confidence is suffering as employers become more cautious.
The Employment and Recruitment Federation, supported by Icon Accounting, has published its Annual Labor Market Survey of Ireland. This report examines the Irish job market and the impact temporary and contract roles are having in the wider area.
The Federation study found that while The Irish job market has not changed“employer confidence is on the rise, temporary and contract roles are now outpacing permanent employment which is a clear sign of growing alarm across the market”.
The report suggests this is indicative of an environment where organizations are still hiring, but with a more defensive mindset as they face the pressures of rising costs, uncertainty and talent constraints.
By 2025, full employment accounted for 44pc of net income, while temporary and contract roles combined represented 48pc. The Employment and Recruitment Federation said this reflects a move by employers to achieve greater flexibility and that employers are becoming more selective and more controllable in how they build teams, particularly where long-term commitments are required.
“That’s important because it tells us something important about the wider economy,” said Siobhán Kinsella, president of the Employment and Employment Association. “The demand is still there, but businesses are making more cautious decisions about cost, growth and commitment.”
An uncertain future
The report comes at a time when the Irish labor market is experiencing low unemployment, when employment itself is growing slowly, but it occurs in an area where sentiment, according to the survey, is “very mixed”. More than half of the companies that contributed to the report said they were concerned about the state of the economy and demand for the next 12 months.
Problems attracting and retaining key talent are also a concern for organizations, as seven out of ten institutions said availability of skills remains the biggest challenge in the market, with the sharpest shortages reported in healthcare, engineering, accounting and finance, construction and IT.
Kinsella said: “This is a market where businesses still need people but are under a lot of pressure on how they recruit, the challenge now is not just filling roles, balancing ambitions for growth and managing costs, uncertainty and the ongoing difficulty of finding the right skills.
“As students begin to review CAO options ahead of the transition period, the findings also point to a long-term pipeline problem in Ireland, particularly in areas such as accountancy and finance, engineering, healthcare and technology where demand remains strong and shortages persist.
“That’s creating a bit of volatility under the headline numbers. The labor market is still active, but employers are no longer operating at the level of confidence they had a year or two ago.”
Also commenting on the report, David Shanahan, director of the Irish recruitment agency IT Searchwho is a member of the Vertical Markets Group, noted that his organization research found that the volume of technical roles across the Irish market increased from 6,082 in March 2025 to 6,810 in March 2026.
However, he noted that there are “important nuances” to be aware of. In areas such as data and cyber security, hiring is more focused on contracting. However, across AI, software engineering and DevOps, hiring is more uneven than it might seem.
“Contract roles are more related to project delivery and programs, while permanent hiring is driven by product-led and commercial software companies, where the focus is on building and growing their technology platforms.”
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