The fortunes of recruitment companies tend to be closely tied to the wider economy. They can flourish in times of growth, but flounder during an economic slowdown. 

As the economy bounced back with aplomb after the Covid-19 pandemic, tech and professional services went through a period of untrammelled growth and recruiters were needed to find and place the talent moving industries, companies and countries. This time last year, LinkedIn released data insights on its own platform listings, which showed that the demand for recruiters themselves was soaring.

But the pace has changed, and news of layoffs in smaller tech companies has become as common as large multinationals taking the first steps towards the same conclusion with hiring freezes.

Meta caused ripples with its recent news that due to slowing ad revenues it would be implementing an international hiring freeze and would “end 2023 as a smaller organisation”, as Mark Zuckerberg, the tech giant’s chief executive, phrased it. 

Meta’s news followed on the heels of other giants like: Apple, PayPal, Twitter and DocuSign have all announced hiring freezes and/or layoffs, affecting their Irish organisations in the process.

And Irish unicorns, the success stories of the start-up ecosystem, are far from immune – Intercom, LetsGetChecked and Flipdish have all cut jobs. 

For recruiters, it appears leaner times are coming, if they are not already here.

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After a dozen years working in recruitment, Ed Rossiter a Limerick native with a wide grin, founded the recruitment company Phoenix in 2018.

Four years later, it employs 50 people, has raised €1 million to fuel growth, and is working across the tech, financial and professional services sector.

Operating in a highly competitive market in Dublin and New York, and in a saturated environment in London, Phoenix is trying to gain ground using an old-school method of expertise. 

Speaking on this week’s podcast Rossiter agreed it is going to be a challenging time for recruitment companies ahead, but he believes being diversified across sectors and across jurisdictions will help. 

“At a senior level, we’re realistic that recruitment companies are pretty closely tied with the economy,” he said.

“From our perspective, we always wanted to build a global brand, maybe quicker than then most other agencies have done, or what people would expect us to do.

“So, we now have Ireland, which sits in the EU, we have the UK, which is a standalone economy and the US, which essentially is 50 little economies under one roof.”

While Rossiter acknowledges that scaling a business across multiple time zones and jurisdictions is far from straightforward and there are bumps ahead, his aim for the company is to continue to build something more akin to a professional services firm rather than a recruitment agency. 

“We’ve always said we operate more like a consultancy, a professional services firm, rather than your typical recruitment agency, which most people would have interacted with previously,” Rossiter said.

“Quite a number of our senior leaders in the business are ex-professionals, so they have trained to be qualified solicitors, tax professionals, or accounting professionals. There’s a depth of knowledge that we would typically have and impart onto the rest of our teams.” 

Recruitment can often, Rossiter says, be a career than people fall into but what Phoenix is trying to create is a team of informed individuals who often have a professional background in the sector they are working in. 

A different climate

“Dublin companies are less interested actually, in finding someone based in Dublin to be a software developer.”

While Phoenix has been experiencing growth in tandem with its clients, it is now facing a different economic outlook than the past four years.

“There may be a slowdown in general recruitment but from a technical perspective, for software engineering developers and such, that demand still remains pretty high,” he said.

“I think the general sentiment around the tech market is, you know, it’s been a crazy couple of years in terms of valuations and the amount of funding that was pumped into that space globally and that’s obviously cooled off now.

“One positive that I’ve certainly taken from a lot of conversations in the space recently is, there’s a lot of venture capital funds and private equity funds that are still well capitalised, ready to deploy and invest into good quality businesses. 

“So I think for the next twelve to twenty-four months, you’ll still see investments, but it will probably be centred around businesses to have strong recurring revenue, quality products, and a good brand.”

Rossiter is still seeing a strong jobs market but notably and perhaps predictably, the demand for talent is less focused around certain locations now, as platforms such as Globalization Partners and Remote.com, have made it feasible for companies to employ and contract staff anywhere. 

“Dublin companies are less interested actually, in finding someone based in Dublin to be a software developer,” he said.

“We’re talking timezones with these companies now. So plus and minus three, four or five hours and still paying them quality salaries, regardless of where their location is.”

What that trend spells for workers in Ireland who are seeing jobs, which were once domestic and paid at competitive rates, now going to workers living in cheaper economies, is a developing conversation.

Rossiter doesn’t believe this spells an end for the slew of well-paid developer jobs in Ireland and other financial and tech hubs, but a raising of the bar. 

“I think you will potentially have a levelling out of salaries, and be more focused around skill sets, rather than geographical locations.”

For jobseekers, Rossiter sees an end to the heady times of people moving between companies gathering stock options and being enticed in by get-rich-quick opportunities, instead he believes there will be a greater focus on the underlying performance of the business for potential recruits and to that end it may be harder for early-stage start-ups to find talent that is willing to back them. 

“I think from an employee perspective, it’s a holistic view on what the overall package looks like, and what the culture feels like. I would always have a concern if the amount of share options is the first questions from an employee perspective, when they are joining a business,” Rossiter said.

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