Employers say housing is as big a challenge as talent retention
Social shift: One in five Irish households are now living in rented accommodation, compared with one in ten in the 1990s, just one indication of the challenges that employers face in helping their employees find a home. Picture: iStock
Ireland’s housing crisis poses a challenge to employers as it hinders their ability to attract and retain talent.
According to Chambers Ireland (CI), a shortage of available talent fuelled by Ireland’s housing crisis is the biggest threat to Ireland’s small and medium enterprises.
That some multinationals have considered buying out entire housing estates to accommodate their workers, is a fact recently advised by CI to the Oireachtas joint enterprise trade and employment committee. This, and the fact that housing is by far the most common issue being brought to the attention of its 28 affiliated chambers across the country.
Nationally, rent levels in both new and existing tenancies have increased, with rents for new tenancies being the highest ever recorded. According to the Rent Index Report for the second quarter of 2023, new renters are paying 18% more each month than existing tenants.
The national standardised average rent was €1,574 per month for new tenancies and €1,332 for existing tenancies — a difference of €242.
The report, which was published in December, by the ESRI and the Residential Tenancies Board (RTB) shows that year on year, rents in existing tenancies grew by 5.3%, compared with 11.6% for new tenancies.
The inclusion of a right to housing in the Constitution and the removal of “no-fault” eviction from the Residential Tenancies Acts, are two key recommendations made in the report.
Another, on the topic of addressing affordability issues is threefold and advocates: the expansion of Rent Pressure Zones (RPZs) nationally, greater enforcement of RPZs and the development of supports for renters that accrue rent arrears.
Also stark were some of the findings in the Renting and Risk report, published in October by the national housing charity, Threshold and the Citizens Information Board (CIB): One in five Irish households are now living in rented accommodation, compared with one in ten in the 1990s. The figures are indicative of a significant shift in tenure pattern being experienced in Ireland.
The age profile of those living in private rented accommodation is also changing, with people now living in that sector for longer.
While almost 80% of people over the age of 40 in Ireland own their home, barely a third of adults younger than 40 are homeowners here, according to the data. The finding that more single adults under 40 still live in their parents’ home in Ireland, than do a similar cohort in any of the other 14 EU countries polled, tells its own tale.
Recent Morgan McKinley research makes reference to a ‘brain drain’ associated with the continued migration by Irish legal professionals enticed by higher compensation, to US law firms based in London. Salaries remaining stable in Ireland, prompted junior lawyers to seek higher pay and a perceived, more affordable standard of living in the UK.
The research confirmed that accommodation issues continue to hinder the hiring of overseas talent into Ireland. Also, the retention of young construction professionals in the country, with many seeking opportunities in the USA and Canada.
Companies looking overseas for local automation engineers face complications due to the limited availability of accommodation, according to the study, which warned that addressing the housing crisis ‘is essential’ to retain and attract talent across various sectors, and to create a more attractive environment for professionals to build their future here.
For the many workers living in their childhood homes across the country, being permitted to work from home saves many the fiscal stress of trying to find affordable rent adjacent to their workplaces. For those and more, the recent announcement by Facebook owner Meta, that it will be reversing its working-from-home policy, has doubtless caused upset.
This is an emotion that possibly also descended upon the Zoom employees who live near their workplace, having recently been advised that they must show up onsite two days per week.
Of course, under Irish law, employees have the right to ask their employer for a remote working option. But this right is weaker than weak, given that employers are within their rights to say ‘no.’ EU regulations and risk exposure are two of the reasons why some employers are turning away from remote working.
Employers don’t always know where remote workers are located. So if an employer was unaware that their employee was domiciled elsewhere while working for them, that employer may find that they are regarded as having set up a permanent office in that country, and are subject to corporation tax there as a result.
In fairness, this sort of situation is not likely to be something that occurs often and it seems wrong that the slim chance of it happening should bar all employees from working remotely, at least some of the time.
That said, it is a legitimate employer reservation. As is the five-day office-based working week for an increasing number of employees, who can pick and choose jobs, at a time when unemployment here is at a record low of around 4%.
Referring to Ireland’s near ‘full employment economy,’ in an interview, Enterprise Ireland CEO Leo Clancy said: “That means that we need to still bring a lot of talent to Ireland, and that’s where housing bites specifically.” That we Irish are keen on working from home was confirmed by a recent report by BNP Paribas Real Estate Ireland, which showed that Ireland was the fastest among the 27 EU member states polled, to adopt remote working.
According to the CSO Population and Migration Estimates (April 2023) an estimated 30,500 Irish people emigrated — the highest number since 2016.
Dubai, Canada, Australia and New Zealand are just some of the destinations to which highly qualified Irish professionals are emigrating. While they head for the airport, their former employers are increasingly being left with roles they can’t fill because of skills shortages.
This is where Ireland’s housing crisis impacts again, as while hiring employees from abroad is the obvious solution, this is increasingly not an option, when those workers learn how difficult it is to obtain affordable housing here.
In September, while reporting on housing shortages turning rental apartments into a scarce commodity across Europe and the severe supply shortage pushing prices to record high, Bloomberg referenced the ‘skilled foreign workers who can often pay more than locals’ in Dublin, Paris, Berlin and Lisbon.’ Also, the apartment hunters in Zurich, who take wine and chocolates to viewings in an effort to stand out from the crowd.
Of course the housing crisis is widespread. In England, average monthly rents are at record levels, while the average home costs roughly nine times the mid-range income.
In Australia, according to a 2023 Anglicare survey, early childhood educators, nurses and aged care workers in full-time work ‘can only afford as little as one in 100 rentals.’ In Greater Minnesota, when the housing crisis found workers struggling to find housing and employers struggling to find workers, the Minnesota Democratic–Farmer–Labor Party (DFL) lawmakers (an affiliate of the U.S. Democratic Party), stepped in to help. They did that by expanding a state programme that subsidises ‘workforce housing.’ This is rent based on what local employers are paying in the area.
In its report on this development, The MinnPost referenced the case of a manufacturing plant in the region that was attempting to hire two workers, only to find both were bidding on the only available house. The one that didn’t get the house turned down the job offer and didn’t move to Minnesota.
Also referenced, were the workers in that region that live in hotels while searching for housing, only to be displaced when hockey tournaments come to town.
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