Manufacturers facing skills shortage

By Pádraig Hoare

More than half of manufacturing businesses in Munster say they are facing a skills shortage, while half of larger SMEs across the country say a dearth of engineers is a problem.

A report by Bank of Ireland and recruitment firm HRM found manufacturing SMEs nationally were most concerned about the lack of skills in marketing, sales and production.

Munster manufacturers cited quality and engineering gaps as significant challenges.

More than half of Munster businesses said the lack of skills would be a major problem in the future, compared to 22% of Dublin firms.

The report said that the skills shortage could impact expansion and succession plans by SMEs.

“It is perhaps concerning that the core functions for marketing, sales and production are those that provide the biggest skills challenges for SMEs.

“Given that founders of SMEs often originate their enterprises through a strength in one of these functions, it may suggest that the absence of additional talent in these areas might limit expansion or imply longer-term succession challenge,” the report said.

Skills gaps vary according to company size, the report said, but marketing was the most glaring, with two of five firms saying there was not enough skills. 

Retaining talent was a bigger problem for SMEs than larger organisations, the report said.

The attraction and retention of talent is a substantial challenge facing organisations at all levels, but perhaps more concentrated for SMEs who may not have dedicated resources to address it. The cost of lost opportunities and over-burdening existing employees can be hard to quantify but can be significant.

Wage increases are the most commonly relied upon staff-retention strategy, used by a quarter of firms, while one in six said location is a primary pull factor.

Incentives by firms in Connacht and Ulster such as flexi-time, pension schemes and health insurance have proved to be the carrot to retain more staff than Munster and Leinster, the report said.

Head of manufacturing at Bank of Ireland, Brian Evans, said the findings in Munster reflected what SMEs on the ground had been reporting anecdotally.

“The reality is that manufacturing companies will miss opportunities if the skills gaps are not filled. Retention of staff is going to be critical for business sustainability.”

The research surveyed over 250 manufacturing SMEs in the top five sectors, including building materials, print and packaging, equipment assembly, timber and food.

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