Ireland: On the Road to Economic and Employment Recovery

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Ireland is forecast to experience robust growth during 2016 and 2017. Due in part to the country’s per capita GDP gradually returning to pre-financial crisis levels. Despite the still settling political climate, the Irish have much to be optimistic about as the country has put the worst years of its financial crisis behind it. The economy expanded by 6.9% in 2015 and the unemployment rate continues to fall. However, despite substantial growth, the Irish government will have to manage great long-term debt and fiscal and demographic issues to protect its economy.

The country’s low corporate tax rates make Ireland an attractive destination for foreign companies. With similar cultural alignment to Northern Europe and a high level of English proficiency, the Irish are a very favorable market for many organizations such as those in the United Kingdom. Many firms in the United Kingdom are looking outside of the UK to fill technical job roles as the digital skills gap shows no sign of narrowing. One in four firms is looking overseas for IT talent, according to a survey of more than 1,000 managers conducted by ManpowerGroup’s Experis. Development solutions, business intelligence and analytics roles are most likely to be staffed using workers who are outside of the UK. However, information security positions are almost all exclusively sourced within the United Kingdom, with only 7% of these jobs being filled with talent from outside of the country.

“Achieving the right balance between local expertise and international flexibility is never a simple task. Modern IT teams are governed by fierce cost and time pressures which often forces them into creating diverse international teams to get the job done,” said Geoff Smith, managing director of Experis Europe. “New technology makes it far easier to manage and facilitate this, but there is still a need for long term planning that takes advantage of global talent pools, but keeps local knowledge at the core.” The skills gap is costing the economy in the United Kingdom approximately £10bn a year, as firms cannot access the skills they need. In September 2015, there were 170,000 more unfilled positions compared to the 2001-2014 average. This trend in the United Kingdom is making Ireland an, even more, popular option for talent sourcing as the migration of the workforce back into Ireland is on the rise.

During the most difficult years of the financial challenges, Ireland saw many of their young workers leave the country. The Irish population between 20-24 years old decreased by 34% over the past seven years, while the number of people aged 25-29 fell by 27.5% according to reports from Ireland's Central Statistics Office. This substantial emigration trend will have consequences detrimental to the workforce when jobs best suited for individuals in these age groups return to Ireland and the economic stability of years past is restored. While emigration did have the benefit of lowering the unemployment rate during the crisis, in the long term, it will create talent shortages which could result in fiscal problems. As the aging population becomes heavy with older workers who are unable to work and dependent on the government programs which supply them with pensions and health care, fewer young workers will mean less tax revenue to finance these programs.

Despite a decrease in the emigration rates, Ireland will still need to develop a strategy to attract both new and returning immigrants, and especially young people, to the recovering nation. Compared to most other European countries the Irish have a much healthier demographic profile, but falling birthrates will only intensify the need for a boost in immigration to offset the repercussions of its dwindling workforce. Attracting immigrants with better housing and government programs will cost money and for a country that is still not entirely restored to pre-crisis financial stability, managing the amount of new debt will be critical to their continued growth in the final stages of recovery.

For the first time in eight years, Irish employers are expecting to grow staffing levels in all industry sectors in the first quarter of 2016, according to the latest Manpower Employment Outlook Survey released in January 2016. Employers are reporting a seasonally adjusted Net Employment Outlook of +8% for the start of the New Year, up three percentage points on the final quarter of 2015. This equals the figure seen in Q1 2015, which represented one of the strongest labor market forecasts reported in Ireland since 2007.

Cara O’Leary, Sales Director, Manpower Ireland, said “The results of our survey clearly show continued employer confidence in 2016. The see that employers across all 11 sectors surveyed plan to increase staff in the coming months for the first time in 8 years is incredibly positive news for job seekers. The Pharmaceutical sector is expected to enjoy the strongest performance as demonstrated by recent job announcements from companies like Pfizer and Regeneron, which will bring a significant boost to the sector. What’s also interesting is that all provinces are reporting strong hiring intentions for the New Year, demonstrating that economic growth is spreading to all regions of the country.”

The most positive outlook for hiring growth is expected in the life sciences industry as the pharmaceuticals sector expands this first quarter of 2016. Growth and hiring are expected to continue over the course of the first half of the year. Recently, some major players in the pharmaceutical world have announced further expansions into Ireland with a wide variety of positions and job roles available. They include supply chain/global operations, procurement, enterprise risk management and corporate finance and information technology amongst others. Growth will also be seen in the research and drug development areas, and supporting roles as more drug patents expire, and companies work towards the more affordable generic drugs in the race to go to market first.

Overall the hiring prospects for Ireland over the coming year look promising, despite the political climate. Many employers are not worried that the upcoming elections will affect their staffing strategy. Manufacturing and the electricity, gas and water industries are also expected to hire many new positions this quarter. With the additions to the labor pool (due to growing immigration of workers returning to Ireland) sourcing talent in this market will become increasingly favorable for those companies around the globe seeking a contingent workforce solution in the EMEA region.