Skills shortage is impacting Irish business performance

Skills shortage is undermining productivity, business growth, revenues and profitability in 2021, according to Hays employer survey.

Up to 91pc of Irish employers faced recruitment challenges in the past 12 months, a new survey indicates.

The Hayes employer survey found that these skill shortages have undermined productivity (50pc), business growth and expansion (30pc) and revenues and profitability (20pc), according to employers.

“The competition for talent has been a universal challenge for Irish-based employers throughout 2021 and we expect this trend to continue into the New Year”

A total of 50pc of Irish-based employers claim ongoing skills shortages have had a negative impact on organisational productivity, 39pc say it has undermined their ability to deliver key projects and 30pc claim it has stalled their plans for expansion.  One in five employers suggest recruitment challenges were impacting their profitability and revenues.

Business challenges

The research, published as part of the Hays Ireland Salary & Recruiting Trends Guide 2022, surveyed a total of 1,500 Irish-based employer and employers.  Other prominent challenges cited by employers due to skill shortages include:

  • Employee morale (38pc)
  • Business development (27pc)
  • Customer / client service (24pc)
  • Innovation / creativity (16pc)
  • Absenteeism due to stress (14pc)

The majority of employers (68pc) cited competition from other employers as the primary cause of their inability to meet their recruitment and retention goals.  Other prominent reasons cited included a shortage of new talent entering their industry (33pc), individuals leaving to work in other industries (17pc) and people moving to other geographic regions (13pc).  Significantly, seven percent of employers cited the reduced access to migrant workers from overseas as a key challenge.

Other notable challenges cited included:

  • Lack of opportunities for progression (14pc)
  • Negative perceptions or stereotypes of the industry (12pc)
  • Lack of diversity amongst those entering the industry (10pc)
  • Inadequate awareness of opportunities amongst second- and third-level students
  • Lack of entry level graduate schemes (8pc)

A universal problem

Woman in white blouse presenting on stage.

Maureen Lynch, Hays Ireland

In response to ongoing talent shortages, Irish-based employers are currently 35pc more likely to make a counter-offer to resigning employees, compared to before the Covid-19 pandemic. 

The considerations for doing so were, according to those surveyed, to keep talent from leaving (86pc), it was the most cost-effective thing to do (51pc), to avoid talent gaps (29pc) and it provided an opportunity to rebalance salaries for individuals (13pc).

“The competition for talent has been a universal challenge for Irish-based employers throughout 2021 and we expect this trend to continue into the New Year,” said Maureen Lynch, director at Hays Ireland.

“In line with the report’s findings, it is telling that nearly two in five Irish employers are more likely to make counter-offers to resigning staff than they were pre-pandemic.  This development points to employers’ acute awareness of the ongoing competition for talent, and the time and resourcing that goes into replacing in-demand skillsets.

“At a more macro-level, it is well documented that the Irish economy has rebounded strongly in the second half of the year and Irish employers understandably want to capitalise on this growth and position themselves for further expansion in the 12 months ahead.  To this end, it is important that we look to identify meaningful solutions, including tackling recent work permit delays, to alleviate ongoing recruitment pressures.

“The ability of employers to recruit and retain talent is integral to delivering upon their wider business objectives, including realising their growth projections, maximising revenues and ultimately driving the fundamentals of a healthy business environment.”

John Kennedy
Award-winning ThinkBusiness.ie editor John Kennedy is one of Ireland's most experienced business and technology journalists.

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