Geopolitics and AI among factors driving employers to temp hiring

Employer confidence in Ireland’s jobs market is down, a survey by the Employment and Recruitment Federation has found

Siobhán Kinsella, president of the Employment and Recruitment Federation (ERF).

Employers are showing clears signs of hesitancy, with many opting for temporary over permanent recruitment options.

Employer confidence in Ireland’s jobs market has reversed sharply within the first quarter of 2026, with optimism on future vacancies falling from 56% in January to 39% by March, according to the latest Irish Labour Market Monitor from the Employment and Recruitment Federation (ERF), supported by ICON Accounting.

Siobhán Kinsella, president of the ERF, said the data revealed in the ERF’s Q1 monitor confirms a turning point that ERF members have been signalling for several months.

“This is not a jobs market in retreat. It is a jobs market on hold. Irish employers came back from Christmas with real optimism, and within three months that confidence had collapsed by nearly a third. That is what a market in transition looks like,” she said.

In this Q&A interview, Siobhán Kinsella outlines the reasons behind the trends highlighted by the ERF’s latest Irish Labour Market Monitor.

Are you seeing any notable trends in the balance between full-time, part-time and contract employment?

We have seen a marked slowdown in the number of permanent vacancies being filled and employer hiring caution is showing in a marked move to more flexible hiring through contract and temporary agency vacancies being favoured. This was evidenced in our Quarter 1 Labour Market monitor which showed agencies reporting an increase in permanent vacancies, which was 52% in January dropping to only 28% reporting increased vacancies in March. Added to these, agencies are seeing more qualified candidates being available for roles, rising from 24% in January to 36% reporting increased qualified candidate availability in March. This is also beginning to be seen by the CSO, in the Quarter 1 Labour Force Survey with the lowest growth in employment numbers in 5 years and unemployment slightly up at 4.9%.

Do you see geopolitical unrest impacting employment trends?

The geopolitical challenges of war and the lack of predictable policy context is causing all businesses to be far more cautious that we would otherwise be. This coupled with inflation and the drive for greater efficiency is putting more pressure on business to do less with more. “Cost containment” is the most common term I hear when speaking with Industry colleagues. That coupled with ever increasing costs of employment from Minimum wage increases, to the transfer of sick pay obligations from Government to Industry, increased employer’s PRSI and auto enrolment is having a disproportionately high impact on SME’s.

Which sectors are among the first to see AI influencing their work functions?

The net number of people employed in IT year on year has decreased by more than 20K employees or by 10.7%. In recent years, tech layoffs have actually been helpful to the broader economy as it gave Indigenous industry and even the public sector access to talent that they had previously been priced out of having by the Global Tech giants, to see a net decrease prior to all of the newly announced layoffs is a cause of some concern. In large consulting and Accounting houses there appears to be a decrease in graduate this year. Given the frequency large consulting houses are being fined by Governments for AI hallucinations being submitted in commissioned reports, that may be a temporary reduction. Any efficiency AI does bring to Industry will predominately be in white collar roles. That leads to the question of where human traits of critical thinking, relationship building, influencing and empathy add most value. It also changes the conversation in what we pay for skilled trades, pay rates for Health Care and Home Care and Hospitality professionals. Historically they have not been well paid roles. Will human skilled roles evolve in the premium we are prepared to pay for them?

What topics would you like to see given prominence during Ireland's EU presidency?

It has to be the Mario Draghi report implementation on simplification of bureaucracy and making it easier to get things done. I think in Ireland there is increasing frustration with waste and cost over runs. DEPR is trying to bring our multiple own institutions of the state , created by us together to meet under one roof to get better, faster decision making to aid infrastructure development progress. That same idea could be applied in a few more areas.