Market trends – Recruitment in the current economy in Q1 – 2023

Late 2022 and early 2023 were certainly a rollercoaster for many – the ever-evolving workplace, a further shift to remote work, inflation, cost of living crisis, layoffs, and talks of recession causing concerns to both business owners and candidates alike.  

We are now well settled into 2023 with the end of the first quarter already looming large. 

A good opportunity perhaps for us to pause for reflection on what has been an uncertain start to the year for some, and a look ahead with our thoughts on what 2023 could hold for recruitment.   

Given the well-publicised recent Big Tech layoffs…each passing week still seems to have a new announcement of global downsizing….it has caused many companies of all sizes to reassess if they need to hire more staff, resulting in a wait-and-see attitude by employers and some reluctance by candidates to move roles.  

Despite the above, there are strong fundamentals in the economy resulting in reasons to be optimistic.  

  • Despite the Big Tech layoffs, most skill sets are still in short supply, and demand for IT, Sales, and Finance candidates among others is strong in sectors like Pharma, Financial Services & Consultancy.  
  • We are also seeing examples of clients developing a strong candidate pipeline directly, but finding at the offer stage that candidates have multiple offers to consider. Further evidence that there is strong recruitment demand and a candidates market.  
  • Indigenous Irish tech companies are showing promising signs of growth for 2023. The supply of tech candidates especially is up, and salary expectations are a little more realistic on the permanent side of recruitment right now. The result is that the market is now more balanced to the benefit of these companies. The last 2 years have seen the Big Tech companies with big budgets over-hire and overpay, but with the recent spate of redundancies, candidates are more open to considering local enterprises where they will be closer to the decision-makers.  
Recruitment market trends
  • Demand has increased on the contracting side of the business – projects need to get finished and this is the best way forward when plans for new permanent roles may be on pause. Contractor renewals are extremely high with over 95% being renewed and rates being maintained.
  • Hybrid work is here to stay. The great return to office debate will rage on in 2023, but the hybrid approach will reign supreme. Companies will need to adapt to their employees’ needs, whether that’s creating a single schedule for the whole company or letting individual teams decide when they attend the office. Offering hybrid or remote working is key to attracting and retaining staff – candidates are willing to forgo or trade off some salary in return for that all-important work-life balance. We are finding that employers who support remote, hybrid, or flexible working are actively engaging candidates – those that don’t are dramatically reducing their candidate pipeline and finding their roles increasingly difficult to fill. 
  • Big is not always beautiful – candidates are more and more conscious of the experience of redundancies over the last six months, whether directly affected or simply through the consistent headlines. Smaller companies can offer employees more rewarding work by being responsible for a wide variety of tasks rather than just a cog in the process and hence resulting in a more fulfilling work experience for employees. Companies that focus on well-being and extra benefits will do better in filling roles.
  • Historically, when there are redundancies and uncertainty, there has been an increase in the start-up sector – layoffs usually have the knock-on effect of innovation flourishing. Many Tech professionals tend to have their own side projects on the go while also working. Some who have been laid off may decide now is the time to focus fully on and progress their opportunity rather than returning as an employee. While various funding sources may have reduced over the last six months, there is still a range of funding options to support these fledging enterprises. 
Recruitment market trends

In conclusion, the Big Tech layoffs have led to a sense of nervousness in the recruitment market during Q1/2023. However, given the strong fundamentals in the Irish Economy, there is an expectation that this feeling will recede in the very near future and this is evident from conversations with clients who are expecting to increase recruitment from Q2/2023.