The Austrian market for external recruitment and executive search services closed 2024 with its second consecutive year of significant decline. According to the latest study by Interconnection Consulting, based on analysis of over 50 recruitment firms representing the majority of market activity, industry revenues fell by 7.0% to €199.7 million, marking a steeper contraction than the 2.8% decline observed in 2023. The number of filled positions dropped by 13.4% underlining the cautious attitude of many companies in the face of economic uncertainties, higher costs, and ongoing structural shifts in the labour market.  

Premium Segments Show Resilience

Despite the overall decline, the study highlights a clear shift toward higher-value services. While the total number of placements decreased significantly, average placement fees increased across all salary segments, with growth ranging from 5.3% to 7.7% depending on the wage category. Executive Search, the premium segment serving positions above €85,000, demonstrated relative resilience with a more modest 6,6% decline in volume compared to 9,5% for entry-level positions below €35,000. This trend reflects agencies concentrating their resources on profiles that generate stronger margins and provide longer-term value for clients.

IT and Finance Lead Market Share

Sector analysis reveals continued dominance by knowledge-intensive industries. IT and Telecommunications maintained its leadership position with 22.2% of total market revenue, followed closely by Finance and Professional Services. Together with Sales and Marketing, these three sectors account for nearly 60% of the entire market. In stark contrast, traditional administrative functions and contact centers recorded severe declines respectively, reflecting the accelerating impact of digitalization and automation on these roles.

The Demographic Time Bomb

Beyond cyclical economic pressures, the study identifies a critical structural challenge approaching the market. A wave of executive retirements is creating unprecedented demand for senior-level succession planning, particularly affecting the executive search segment. This demographic shift presents both challenges and opportunities: while companies struggle to find suitable leadership successors, they must also adapt to the expectations of Generation Z and Millennial candidates who demand purpose, flexibility, and respect alongside competitive compensation.

Engineering Emerges as Growth Bright Spot

Bucking the overall decline trend, the Engineering sector posted modest growth of 0.5%, signaling renewed momentum in technical and specialized skills. This development, combined with the continued strength in IT services, suggests that Austria’s transition toward a more technology and innovation-driven economy is creating new pockets of demand even amid broader market contraction.

Market Outlook: Recovery on the Horizon

While 2024 brought deeper decline than anticipated, the study’s analysis suggests the market is approaching a turning point. The combination of demographic pressures, delayed hiring decisions from the previous two years, and Austria’s strong economic fundamentals points toward recovery beginning in 2025. Recruitment firms that have successfully navigated this downturn by focusing on specialization, technology integration, and strategic advisory services are best positioned to capitalize on the expected upturn. The Austrian recruitment market’s ability to maintain pricing power even during volume declines demonstrates the industry’s evolution toward higher-value partnerships. As companies prepare for post-recession growth and address looming succession challenges, the recruitment sector remains a critical enabler of Austria’s economic transformation.

Link to the report

03/09/2025

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.