Irish firms will soon have to fight hard to hire staff
All the signs point to a continued tightening in Ireland’s labour market, in the urban centres in particular. But are employers adapting quickly enough?
Foreign-owned companies created 20,000 jobs last year in the Republic, while the IDA reports that more of its client base wants a presence outside the capital.
210,000 people were employed by foreign companies at the end of 2017.
Demand for professionals is increasingly outstripping supply, and this demand is particularly high in financial services, pharmaceuticals, human resources, construction, and, of course, information technology.
The ripple effects have been spreading across much of the rest of the economy.
In a recent blog post, the managing director of Hays Ireland, Simon Winfield, wrote that a staggering 98% of employers say they have experienced skills shortages, and many say the shortages affect productivity.
And some firms report increases in absenteeism, because of workplace stress caused by pressure to fulfil contracts.
In its survey, Hays appears to have discovered a large gap in worldview between management and the workforce.
Half of employers consider that staff have unrealistic salary expectations, yet a quarter of employees plan to leave their current job.
So, have Irish employers been caught napping? There is evidence that firms are adapting.
In the past, the arrival of multinationals sucked labour away from indigenous firms and led to the bidding-up of wages.
SMEs found it difficult to compete with multinationals.
According to Morgan McKinley, Irish-owned firms are holding their own in the marketplace.
This is because more firms are ambitious and innovative.
A new indigenous technology cluster is emerging in areas such as IT and biotechnology.
https://t.co/GAe0nrJvdm A review of the demand for tax talent from MNCs, SMEs and smaller practices and boutique tax firms in Q1 2018 plus the most in-demand, highest paying roles.
— Morgan McKinley IRE (@MMKIreland) May 3, 2018
One interesting development is the rise in the use of contractors across a wide range of professional jobs.
Recruiter, HRM, reports that two-fifths of all scientific professionals want to work as contractors, rather than on the permanent payroll.
Some are working as fixed-term contractors, having received an up-front fee, while others are paid a daily rate.
With uncertainty regarding the future, particularly in areas exposed to a possible hard Brexit, the advantages of using contractors can be significant.
Experienced contractors can be a breath of fresh air. But many organisations are not getting the most out of their workforce, particularly not from their permanent workers.
Some time ago, the Harvard Business Review highlighted the huge gaps in US companies’ approach to the training of staff.
The article, by David Smith, cited a survey by consultancy, Accenture.
It found that a majority of respondents felt under pressure to acquire new skills, but only a fifth said the company had helped them to gain any in the previous five years.
The author concluded that management should be designing more flexible career paths, so that they can more easily deploy existing staff to roles in most demand.
He approved of the way Hilton Worldwide hotel chain had gathered extensive details on employee skills, everything from languages to community activities.
These databases were drawn on when skills were being matched with demand in the organisation.
When recruiting, the group pays less attention to the specific skill sets and qualifications of candidates, preferring to attract strong generalists, who can then be trained.
Work has also been redesigned to better match the skills available.
Such approaches may not commend themselves to recruiters.
There is evidence, however, that employers can ease the pressure by using their imagination to better harness the talent already on the books.
By using their employees more effectively, they may also increase the chances that staff don’t quit for other jobs, thereby saving many thousands of euros.
