Ireland’s Labour Market: End of Q2 2025

Posted on: 08th July 2025
by Michael Lantry
IT Jobs and Recruitment Insights

We are half way through 2025. The recruitment profession has been quite volatile. For tech recruitment, which GemPool specialises in, there have been pockets of activities but also, noticeably, plenty of caution resulting in less demand for recruitment. Taking a wider view, despite global uncertainty and evolving economic headwinds, Ireland’s labour market has continued to be in remarkably robust shape in the first half of 2025. Yet beneath the positive headlines lie emerging challenges and shifting dynamics that businesses, recruiters, and jobseekers must navigate. Here’s a snapshot of the latest data and trends shaping Ireland’s employment landscape. I have tried to share this in the context of the IT and recruitment sectors. 

Near Full Employment — But Talent Pressures Remain

According to the Central Statistics Office (CSO), Ireland’s seasonally adjusted unemployment rate stood at 4.0% in May 2025 (down from 4.1% in April 2025 and 4.4% in May 2024), well below the EU average of 6.1% (Eurostat). This reflects near full employment conditions — a testament to the country’s strong economic performance in recent years.

• 2,794,000 people were in employment in Q1 2025, up 3.3% from the previous year (CSO Labour Force Survey).

• Net inward migration added an estimated 79,300 people to the country in 2024, offering fresh talent, particularly from Ukraine and India (Department of Enterprise, Trade and Employment)

What does this mean in the world of IT and tech recruiting? Well, we have definitely seen an increase in Indian candidates in the market. Another thing I have noticed is that Indian professionals moving to Ireland are settling. They are buying homes. The indication is therefore that this talent is here to stay. This is great news. These are young, well educated, ambitious and hard working potential candidates and employees. For tech recruiting, I believe that employers need to be more accepting of the experience built abroad before moving to Ireland. This is often undervalued.

While headline numbers look healthy, employers continue to grapple with skills shortages. The latest Labour Market Monitor Report (ERF/Ipsos B&A) and Eurostat highlight acute gaps in:

• Construction

• Nursing and healthcare

• Accountancy

• Software development

• Engineering

We have not seen a surge of tech candidates into the market. This, coupled with risk aversion amongst candidates who are in jobs, means it's still hard to find good talent. Recruiters are increasingly looking internationally to fill these gaps, reflecting the persistent mismatch between local talent supply and industry demands. Employers need to continue to offer a strong employee value proposition, and also make sure to tell the market about it.

Wage Growth Continues — But Inflationary Pressures Linger

Tight labour market conditions have kept upward pressure on pay:

• Average weekly earnings rose 5.6% year-on-year in Q4 2024 (CSO Earnings and Labour Costs Release).

• Ireland holds the second-highest minimum wage in the EU (€2,100+ monthly) and the third-highest average salary (€58,700) (Eurostat, 2023 figures).

• Statutory sick pay costs, increased employer PRSI and the impending pension auto enrollment are all adding costs to employers. 

While this is positive for workers, it puts pressure on businesses managing cost bases already challenged by higher energy, supply chain, and operational costs. At GemPool, we place employed contractors as well as limited company and perm staff. We don't always see employers willing to offer higher rates or salaries, so a lot of the increased cost of doing business is being pushed down the chain to the contractor. This only works where there aren't many other options for the contractors. They will vote with their feet and go into roles that offer slightly higher pay. The government also needs to do more to strike a balance between the desire to offer employees more but not stifle economic growth as employers cannot afford to hire more staff.

Hybrid Work is the New Norm — Fully Remote Declines

Workplace preferences continue to evolve. Data from Ipsos B&A shows:

• 1 in 3 Irish adults work at least one day per week from home.

• Hybrid roles account for 11-12% of job vacancies.

• Fully remote roles have sharply dropped to just 1.9% of vacancies.

Demographically, hybrid working is most prevalent among:

• Males aged 35-54

• Parents

• Middle to higher socio-economic groups

Employers keen on attracting and retaining talent must balance flexibility with operational needs, particularly in sectors demanding on-site presence. If you are thinking about what benefits you should offer, and how these compare to the wider market, you can download our Employee Benefits Survey here. 

Recruitment Market Holds Steady — But Caution is Creeping In

Insights from the Irish Labour Market Monitor Q1 2025 (Ipsos B&A for ERF) reveal:

• Permanent recruitment remains stable. Over 9 in 10 recruiters surveyed hire for permanent roles, with consistent monthly activity. This is encouraging, as it shows employers can be confident in increasing headcount, which they would not do if they were not seeing potential for growth.

• Contract hiring is showing signs of softening. In March, 32% of recruiters reported no contract placements, up from 24% in January.

• Temporary hiring trends are mixed and volatile, reflecting sector-specific and seasonal fluctuations.

• About two-thirds of recruitment firms reported securing new clients each month, though there’s a slight dip in new business activity in March.

Perhaps most telling is the growing caution among recruiters:

• Up to 3 in 10 expect vacancies to decline in the next three months, twice the proportion reporting this sentiment in February. Recruiters, and I will generalise here, are optimistic beasts. So an increase in pessimism here is worrying.

• Consumer confidence remains subdued, with Ipsos B&A reporting a net confidence rating of -39 in March 2025. Over half of respondents expect the country’s economic position to worsen in the year ahead.

While the market remains fundamentally strong, this creeping caution suggests employers and recruiters are bracing for potential turbulence, particularly as global geopolitical and economic uncertainties persist. I talk to candidates, clients and other recruitment businesses all the time. The overwhelming position is that people feel there is huge uncertainty and it's very hard to predict any trends. Some recruitment businesses are having loss making one month, then hit a company record the next. This volatility drives up uncertainty and ultimately caution.

Gender Gaps Narrow — A Positive Trend

A positive development is the continued increase in female participation in the workforce:

• 71.3% of women aged 15+ were participating in the labour market in Q1 2025 in Ireland

• 1,317,000 women were employed as of Q3 2024.

This trend strengthens the overall talent pool and provides employers with greater opportunities to build diverse and inclusive teams.

Outlook: Balanced Optimism with Pockets of Concern

Overall, Ireland’s labour market remains one of Europe’s standout performers. Unemployment is low, wages are rising, and the economy continues to generate jobs. Yet:

• Skills shortages are intensifying in key sectors.

• Recruitment sentiment is shifting cautiously negative for the first time in months.

• The cost of talent remains a significant pressure point for businesses.

• Housing is still a problem and creates challenges across the economy.

• Tariffs, Trump and FDI are volatile driving more caution for hiring.

For employers, it’s a time to double down on strategic workforce planning, talent development, and flexible working policies. For jobseekers, opportunities abound — but competition for high-skilled roles remains fierce. If you want to discuss how to approach the second half of the year, either as an employer or candidate, get in touch and I would be happy to discuss this with you.