Employers expect to ramp up hiring despite deepening talent crunch

Employers in the Republic are expected to continue ramping up recruitment over the next 12 months despite a worsening talent crunch and mounting challenges associated with the rising cost of living, new research from Hays Ireland has indicated.

Based on a survey of more than 1,450 employers and professionals, the recruitment company’s latest salary and recruiting trends guide suggests company leaders are anxious but optimistic about the hiring outlook for the next year.

Some 85 per cent of respondents said they expect to increase their organisation’s headcount, a slight drop-off from 90 per cent last year, which was a six-year high.

Two-thirds told Hays they expect to hire staff on a permanent basis while 34 per cent are looking for temporary solutions, “a significant change” from last year, Hays said, when three-quarters of employers were looking for permanent staff.

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Employers are, however, concerned about the ongoing shortage of skills within the Irish economy, which they say deepened in 2023. More than half said talent identification was the biggest external threat to their organisation with 94 per cent indicating they faced a skills shortage in 2023, up from 92 per cent last year.

Talent retention is another source of anxiety, employers said, with 62 per cent citing it as the biggest challenge to their business. Among the main reasons cited by employees for their decision to change jobs in 2023 was lack of career progression and development. “In welcome news for employers, 56 per cent of employees feel positive about their career prospects this year, however this has dipped slightly from the year prior,” Hays said.

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Meanwhile, the cost-of-living crisis remains at the forefront of both employers’ and employees’ minds. Some 79 per cent of employers said they had increased pay for staff in 2023, down slightly from 84 per cent last year, with more than half citing rising consumer prices as the main impetus for the decision.

Inflation remains a significant concern, yet 58 per cent of respondents said they are optimistic about the wider economic climate.

Maureen Lynch, Hays Ireland managing director, said the survey reflects a sense of optimism within the jobs market. “However, challenges will persist in the upcoming year as both employers and employees grapple with economic challenges like living costs and inflation. A talent and skills shortage continues to be a concern for employers, with many having to raise wages to both attract new talent and retain existing employees.”