Cost of living in Ireland a turn off for skilled foreign staff

Income tax levels and the general high cost of living in Ireland are hampering firms’ chances of recruiting specialist staff from abroad, a study has highlighted.

While the latest HR directors survey from PwC shows that Irish firms are ambitious about hiring staff, more than 60% said they are experiencing talent constraints and are struggling to find skilled workers for jobs in the technology, R&D, commercial, and digital areas in particular.

Four out of 10 survey respondents said these skills shortages seriously impacted their performance in the last year, leading to the delay or cancelling of key initiatives and a fall in innovation levels.

“The digital age has shifted the skills shortage from a nagging worry to something more challenging and organisations desperately need people with strong technology skills who are adaptable and can work across different industries,” said Gerard McDonough, PwC director of people and organisation.

“However, these people are hard to find and can afford to charge a premium for their skills.

"Having a good mix of talent, and the ability to alter the mix depending on busines needs, is critical as companies look to apply their capabilities in more innovative ways, partner successfully and harness technology effectively.”

As much as 75% of firms plan to increase their workforces in the next 12 months, which is well up on just 37% in 2013.

However, the ability to harness skilled workers is getting trickier and income tax levels (up from 46% to 78%) and the cost of living (up from 31% to 66%) have spiked as factors cited as inhibiting the attraction of key talent from abroad.

The report also highlights the need for companies to rethink their HR and performance management systems.

Nearly a third of respondents said their firm’s reward strategy for employees is not aligned with their business strategy, while almost half (45%) admitted to not being satisfied that it appropriately remunerates their best people.

Considerable changes to reward schemes are being planned for the year ahead, with many firms expecting to change their bonus offering and healthcare schemes.

Almost half of HR managers have not gathered feedback from employees on the strength of current benefit offerings.

“HR is clearly looking to the future, embracing new ways of working and the future skills needs,” said Mr McDonough.

“The top priorities for the next three years, according to the survey, are retaining crucial skills and experience in their organisations and focusing on succession planning for key executives.

"Embracing and adopting new technologies in HR is also very much on the agenda for HR leaders, as they seek to finally get to grips with the data analytics agenda.”