Irish businesses are increasingly relying on temporary and project-based hiring.
Irish employers are responding to rising employment costs and persistent skills shortages by taking a more flexible approach, according to new data from the Employment and Recruitment Federation (ERF).
The ERF’s Q2 2025 Labour Market Monitor, compiled by Ipsos B&A, shows that 39% of member recruitment firms reported an increase in temporary placements during May and June.
“We’re seeing employers adapt in real time to the pressures they face, and that means leaning more heavily on temporary and project-based work”
The shift comes as permanent hiring activity slowed in April and May before stabilising in June, while contract hiring continued to decline throughout the quarter.
Managing risk in a full employment economy
Siobhán Kinsella, president of the ERF, said the trend reflects how employers are managing risk in a challenging environment.
“We’re seeing employers adapt in real time to the pressures they face, and that means leaning more heavily on temporary and project-based work,” she said. “This isn’t about a lack of confidence. It’s about managing risk in a market where skills are scarce, and costs are up.”
The report highlights that 83% of businesses surveyed are struggling to find candidates with the right skills.
Shortages are most acute in IT and data, engineering, logistics and operations. While wage growth continued in the second quarter, it did so at a slower pace than in Q1. Temporary roles in specialist areas are seeing targeted pay increases to attract talent.
Despite these pressures, Ireland’s labour market remains historically strong. The Central Statistics Office reported a record 2.81m people in employment in June, with the unemployment rate steady at 4.0%.
The ERF noted that its member data provides real-time insight into recruiter activity and may reflect emerging trends not yet visible in official statistics. The findings come as employers also weigh broader global developments, including transatlantic trade tensions and long-term workforce planning.
“The fundamentals remain solid, but we can’t ignore the mounting complexity,” said Kinsella. “Employers need responsive policies that match today’s labour challenges, and that includes prioritising investment in training and skills.”
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