More than 90 per cent of companies expect to expand or maintain their current workforces during 2027, the latest Ibec talent and pay survey has found.
However, among the minority that believe numbers will be cut, more than half cite organisational efficiencies driven by digital technology or artificial intelligence (AI) as a factor.
The report from the business lobby group noted another slight reduction in the number of firms expecting to expand in the year ahead, with the latest number standing at 35 per cent, down from 41 per cent in 2024 and 37 per cent last year.
Among those expecting to hire additional workers, though, the number anticipating that the increase will amount to more than 6 per cent of existing staff has risen by 2 percentage points to 43. And 92 per cent of the cohort say they will recruit permanent staff.
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Almost half, 49 per cent of respondents, attributed the expected increases to growing demand for products or services, while 37 per cent put it down to moves into new markets or expansion.
Almost 10 per cent said it would be dictated by the need to develop talent pipelines, while just 3 per cent said it would be primarily driven by the need for new skills, including in relation to AI, although more than a quarter, 28 per cent, said this would be a factor.
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Commenting on the findings, Ibec executive director of employer relations Maeve McElwee said that “while we are seeing a continued softening in headcount growth expectations, overall workforce resilience remains very strong. Even with a slight labour market cooling, employers continue to prioritise permanent recruitment and talent development to maintain competitiveness despite ongoing global volatility.”
The report indicates that recruiting necessary skills – both domestically and internationally – remains the primary focus for recruitment.
“Feedback in recent months from businesses indicates that attracting international workers into key sectors is hindered by overly burdensome visa and work permit procedures. The Republic remains unlike most European Union countries that have adopted the Single Permit Directive, which ensures international talent deals with a single system.
“Employers are also reporting delays of up to 17 weeks for IRP [Irish residence permit] cards, which is impacting business travel. Attracting international workers easily is a critical component of meeting our labour market needs, most notably in sectors facing skills shortages such as hospitality, construction, and care.”
The most cited motivation for reducing employee numbers during the coming year, meanwhile, was increased operating costs and, said McElwee, the rate of growth in the national minimum wage was a significant concern, with the latest recommendation by the Low Pay Commission for an increase of 79 cent per hour, from €14.15 to €14.94, or 5.6 per cent “nearly double what some companies can afford or anticipated”.
On pay increases, the survey, which attracted 336 responses, almost half of them from the professional services sector and a third of them from companies with 250 or more employees, found 3.5 per cent was the average figure for this year. Companies expect that to be slightly down, to 3.1 per cent on average, in 2027.
The gap between larger companies and small and medium enterprises was significant, with 90 per cent of bigger employers having increased pay this year, but 24 per cent of those with fewer than 50 workers saying they had maintained it at current levels or reduced it.
“Rates remain largely determined by competition for specialised skills, productivity, and business performance,” said McElwee.
