- Irish businesses are facing a serious problem in matching available candidates with unfilled jobs
- Competition for talent in IT, engineering and construction leading to wage inflation
- High rates of long-term unemployment continue to put pressure on Irish recover
- Risk of skills erosion amongst long-term unemployed
Employers in Ireland are facing a serious problem in matching available candidates with unfilled jobs, according to a new report from Hays, the global professional recruiting group.
The Irish economy emerged as the third fastest growing economy of the 31 countries surveyed, however urgent skills shortages may put this economic recovery at risk, with industries including IT, engineering and construction struggling to identify a sufficient supply of skilled workers to keep pace with demand in these growing industries.
According to the report, this battle for talent in high-skilled industries continues to intensify and employers are once again willing to pay a premium for hard to find skills, resulting in wage inflation across high-skill occupations.
These are the key findings of the Hays Global Skills Index 2015, a report published today by Hays in collaboration with Oxford Economics. The report, ‘Labour markets in a world of continuous change’ is based on an analysis of professional employment markets across 31 major global economies.
Overall, the report suggests Ireland’s recovery continues to impress and its economy is expected to be the fastest growing in Europe this year, with only China and India on course to record faster rates of growth in 2015.
However, the high, albeit, falling rates of overall and long-term unemployment continued to be a source of pressure within the labour market. This is a trend visible across a number of markets that have witnessed strong growth in the past year, including the US, the UK and a number of markets in Northern Europe. Meanwhile BRICs markets, once the engine of global growth, are facing an economic slowdown which is slackening the demand for skilled workers in those respective countries.
The report also revealed the following:
- A worrying ‘employment gap’ - the difference between the number of people in work today and the number that would have been employed had labour market participation remained at pre-crisis levels. Although employment levels are rising, this gap is still equivalent to over 11 million people globally, equivalent to one in 20 of today’s total workforce.
- The talent shortage, particularly in highly skilled industries, is having an adverse impact on productivity with people being either over- or under-qualified for their jobs and working longer hours without necessarily improving output.
The challenges employment markets face also highlights that a supportive regulatory environment is required to help businesses grow and create jobs, opening up new opportunities for people. More action is needed by governments not only to steer economies through the recovery but also to enable businesses to access the talent they need to build their workforces of the future.
Commenting on the findings of the report, Hays’ Chief Executive Alistair Cox said: “The world is generally back in growth mode. However, this has exposed the huge challenges facing global labour markets, with demand for skilled workers outpacing supply, even though many countries still suffer from high overall unemployment rates. Businesses and governments must act to address these issues or risk jeopardising future economic growth.
“Education and training schemes need to be better aligned and tailored to produce sufficient levels of the skilled resources businesses need. However, this will take time to deliver results. In the meantime, regulatory and immigration reform is required as a short-term route to enable businesses to access world class talent from outside their domestic markets. Otherwise valuable jobs will continue to go unfilled.’
According to Richard Eardley, Managing Director, Hays Ireland: “There are many promising signs that suggest the Irish economy has now turned a corner and the findings in the Hays Global Skills Index 2015 clearly support this.
“Growth rates are higher than any other country in Europe surveyed and this growth has far outpaced expectations. Ireland’s improving economy has triggered a significant change in employers’ attitudes towards hiring. Companies in high growth sectors such as construction and property, IT and engineering all face increasing skills shortages, along with a necessity to review their attraction strategies to secure talent in a rapidly evolving employment market.
“Particular stress is evident as these sectors and professions which experienced both an exodus of established skills during the recession and a dearth of new talent coming through the education system. Overall participation rates remain well below pre-crisis levels and it is therefore critically important that the long term unemployed are re-integrated into the labour market as many are at risk of skills erosion.”
Notes on methodology
The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market, such as education levels, labour market flexibility and wage pressures.
An overall score of above 5.0 indicates that the labour market is ‘tighter’ than normal. A score below 5.0 indicates the market is ‘looser’ than normal. Within these overall scores, however, the scores attributed to each of the seven indicators can vary significantly, highlighting the different dynamics and pressures faced by each country.
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Contacts
Paddy O’Dea, PR360
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Amanda Glancy, PR360
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About Hays
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2015 the Group employed 9,023 staff operating from 240 offices in 33 countries across 20 specialisms. For the year ended 30 June 2015:
– the Group reported net fees of £764.2 million and operating profit (pre-exceptional items) of £164.1 million;
– the Group placed around 63,000 candidates into permanent jobs and around 200,000 people into temporary assignments;
– 23% of Group net fees were generated in Asia Pacific, 41% in Continental Europe & RoW (CERoW) and 36% in the United Kingdom & Ireland;
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA
About Oxford Economics
Oxford Economics is one of the world’s foremost independent global forecasting and research consultancies, renowned for its econometric-based consulting and extensive research services. Founded in 1981, Oxford Economics was originally formed as a joint, commercial venture with the business college of Oxford University, Templeton College. Since its foundation, Oxford Economics has grown into an independent provider of global economic, industry and business analysis, headquartered in Oxford, UK.
Oxford Economics is a world leader in quantitative analysis, going deeper and further than other economic advisory firms, in helping its clients to fully assess the opportunities and challenges they face for future strategy and direction. It specialises in global quantitative analysis and evidence based business and public-policy advice, underpinned by a sophisticated portfolio of business forecasting services consisting of regularly updated reports, databases and models on countries, cities and industries.