Just the job: Irish recruitment sector predicted for growth in 2021
With the Irish economy set for post-pandemic growth later in 2021, the recruitment sector anticipates busier times – with plenty of opportunities for investment and acquisitions.
While Covid-19 has caused an extreme economic shock globally, many businesspeople expect that once it’s under control with the mass vaccine rollout the Irish economy should bounce back in the two final quarters of 2021.
Irish recruitment business Recruiters [www.recruiters.ie/blog/2021-recruitment-and-hiring-trends-in-ireland] surveyed more than 4,000 business leaders in November and December 2020 and found that 64% of those were positive about the year to come, although 52% did expect Covid-19 to impact their business.
Recruiters’ survey also found that 83% of businesses anticipated hiring more employees later in 2021. Of those, 53% said they planned to hire permanent staff, only 4% said they would hire contractors or temporary workers and the remainder planned to hire a mix of permanent and temporary workers.
But finding candidates with the right skills and talents was viewed as the biggest problem by the employers surveyed. Only 40% believed they had enough talent required to meet their company objectives for the coming year. Respondents said the second biggest challenge was a shortage of applicants with the right skills, with competition from rival employers for candidates in third place.
The optimism in Recruiters’ survey was also reflected in the predictions of its rival recruitment business, FRS Recruitment. In December 2020, the company predicted that job postings would increase by a quarter throughout 2021 as the economy stabilises and starts to grow again. [blog.frsrecruitment.com/articles/recruitment-opportunities-to-grow-by-25-in-2021#content]
FRS Recruitment said 2021 would be a year of two halves, beginning slowly as the vaccine is rolled out across Ireland, then accelerating in the second half of the year as confidence grows among businesses and more look to recruit additional employees.
Some of the strongest sectors in terms of recruiting new employees were likely to be healthcare, IT, construction and life sciences, according to FRS Recruitment. Healthcare would need additional numbers to cope with the post-Covid backlog in health, while IT, construction and life sciences have been strong growth areas in Ireland for some years and look set to continue for the foreseeable future.
This growth is in stark contrast to the 2020 figures when recruitment was down 36% year-on-year – almost wholly due to the pandemic and resulting lockdowns. The sectors that experienced the biggest declines were:
- Arts, entertainment and recreation, where recruitment fell by 75% year-on-year
- Hotel and Hospitality (down 61.9%)
- Banking and Financial Services (down 58.2%).
Given the negative statistics for 2020, the rebound in overall business optimism predicted by Recruiters and FRS Recruitment is welcome news to many in the Irish recruitment space.
Indeed, FRS Recruitment has itself been active this year snapping up Get the Shifts, an on-demand staffing platform based in Clare. The deal expands FRS Recruitment’s share of the Irish temporary staffing market and it will be used to expand into international markets, according to the company.
Get the Shifts, which now becomes a division of FRS Recruitment, provides temporary hospitality, retail and marketing personnel. The business delivers staff ranging from one to 500 at a time to clients for shift work.
Hannah Wrixon, general manager of Get the Shifts, explained the rationale behind the deal from her company’s point of view: “By joining forces with FRS, Get the Shifts will be able to benefit from their reach and resources to further build the platform, allowing our business to reach new markets both at home and abroad.”
Predictably, deal making in the recruitment sector slowed during the pandemic, but prior to Covid-19 there were deals being signed off. For instance, in February 2020 holding company BIL bought healthcare and technical recruitment specialist PE Global.
BIL was established in September 2018 to complete the management buyout of the Brightwater Recruitment Group. Duke Royalty and the Bank of Ireland provided the capital for the company. The acquisition of PE Global was BIL’s second purchase.
Cork-based PE Global, which employs about 60 people, continued to operate independently after the deal, led by managing director Keith McDonagh, along with the company’s existing management team.
Why invest in Irish recruitment consultancies
With the anticipated economic bounce back, the Irish recruitment sector is bullish that many businesses will take on extra personnel – permanent and temporary – a potentially boom period for recruitment businesses.
With hiring acknowledged as one of the most difficult aspects of running a company, many businesses outsource it to recruitment consultants to take the stress out of the process and increase the chances of successful hires.
The Irish labour market is well known for being one of the most qualified in Europe. Indeed, 45% of those aged 23-34 have a degree or similar, with a high proportion of them having an IT-related qualification.
In addition, living standards are high in Ireland – the country is one of the 10 richest in the world – but the cost of living is relatively low, including property prices. Even in the capital, Dublin, prices are reasonable, especially compared to other capital cities. Ireland also has relatively generous holiday provision – every employer legally has to offer four weeks’ paid holiday plus bank holidays to employees.
It is also likely that there will be international recruitment to help fulfil roles. Ireland is an attractive country for overseas entrepreneurs. It is the only nation that has English as a first language in the EU since the UK’s departure, which is a pull for people from across the globe. Ireland is part of the single market, so there is free movement of labour between Ireland and the other 26 countries in the trading bloc.
It also means that Irish recruitment companies will be ripe for investment or acquisition in the coming year. With the expected uptick in business, some will be looking to expand or joining forces with consultancies.
Setting up a recruitment consultancy in Ireland
With the positive sentiment in the business community, there will also be opportunities for new players to enter the recruitment sector.
There are relatively low barriers for setting up a recruitment consultancy in Ireland. In addition to the standard measures of deciding on the legal entity of the company and registering for tax purposes, establishing an office and a website, the business has to apply for a recruitment licence. This demonstrates that the consultancy complies with all the relevant legal procedures.
Private companies that provide recruitment services are regulated by the Department of Business, Enterprise and Innovation, and the recruitment licence is issued by its Workplace Relations Licensing Section. The licence costs €500 and lasts for a year.
With such potential for expansion in the years to come, there should be plenty of chances to invest in recruitment consultancies. For those looking to invest, acquire an existing company or establish a new business in Ireland, then it is crucial to get the right advice.
Those looking to invest, buy or establish should seek out advisers with specialist knowledge of the sector in Ireland – including its history, leading players and local norms. Malone & Co Accountants can assist on all the relevant aspects from setting up a company to providing diligence services as part of an M&A deal or funding round in the sector. We can also provide in-depth information to ensure any deal achieves the value hoped for at the outset. Remember, while Ireland may share a land border with the UK, the regulatory regimes can be quite different, which can trip up unwary investors.