Technology businesses raise concerns over recruitment and R&D relief

In summer 2025, we surveyed over 100 leaders of Irish technology businesses to understand their confidence, challenges and plans for the future. We looked at the first half of the data, exploring almost universal confidence in growth alongside some concerns over infrastructure and managing the regulatory burden. 

In this article, we’ll focus on technology businesses’ recruitment, spending plans and how they are engaging with innovation reliefs.

Technology businesses want workforces to be upskilled

Ireland’s economy is thriving, with record low levels of unemployment. However, businesses in the technology industry are facing skills shortages as they struggle to find the right talent.

Over 90% of businesses found it challenging to recruit this year – 42% said it was extremely challenging and 51% somewhat challenging.

And there are two ways that businesses want the government to help them. 36% of respondents want it to fund educational and training schemes to upskill the country’s workforce in AI and other technologies. While 25% want simplified rules around skilled immigration for technology workers.

Likewise, when asked what was most critical in Ireland reaching its goal of being a global leader in AI, 12% want government initiatives to address the skills gap and 12% want greater numbers of skilled immigration.

We also found that, while instances of largescale layoffs are becoming less frequent, stealth redundancies are common. 96% of respondents had made redundancies during the previous 12 months.

Why Ireland’s technology sector needs stronger innovation incentives

Following a Department of Finance consultation to assess its continuing relevance, cost, impact and efficiency, the Budget 2026 delivered changes to Ireland’s R&D tax credit regime.

RSM Ireland believes enhancing and expanding innovation incentives is critical to sustain Ireland’s competitive edge.

As such, while the changes are certainly welcome, a bolder overhaul is required to support Ireland’s position as a global hub for technology-driven innovation.

Our survey suggested technology companies would have appreciated bigger changes too. 34% of respondents said the government should simplify rules and increase innovation-linked grant funding and tax incentives to increase confidence in growth.

Many respondents had applied for reliefs in the past year. 57% had submitted a claim for innovation relief and 43% for an R&D tax credit. Though for the R&D tax credit scheme, only 45% of our sample’s claims were approved without intervention. Although the success of the scheme is dependent on businesses putting in the hard work on their submissions, low immediate success rates could suggest that complexity remains a key barrier. 

The changes to the scheme introduced in the budget – a higher rate of credit available, an increased first-year payment threshold and some administrative simplification – represent the start of changes to the regime, with the Minister for Finance confirming that the Government would be publishing an R&D compass in the coming weeks, which would include a pathway for development of innovation supports.

RSM Ireland would welcome increased relief for outsourced R&D, enhanced credit aimed towards technology & digital innovations and simplification of the process for SME businesses – time will tell whether the proposed changes will deliver for the Technology sector.

How Irish technology businesses plan to invest in 2026

Following a good year for the Irish economy and expectations for continued growth in the technology sector, we expect businesses to increase their spending in 2026.

We asked technology leaders where they plan to spend any funding they secure in the next year. Sales and marketing was the most popular option (46%), suggesting a focus on customer growth and revenue expansion.

Unsurprisingly, topical areas like AI (43%) and cyber security (42%) also scored highly, while workforce and R&D investment sit lower down on the agenda.

Key takeaways: skills shortages, R&D challenges and investment priorities

Irish technology businesses are primed for growth but facing recruitment challenges. They are looking for the government to do more to address the growing skills gap, with investment in training and policies to encourage more skilled immigration.

At the same time, complex regulation is potentially hampering innovation, and R&D tax credits and other innovation reliefs could be working better for technology businesses. Enhancing these incentives is vital for encouraging businesses to be solely focused on game-changing development and ensuring Ireland remains a leader in AI.