A survey by employers' body Ibec says Irish companies need to be more focused on training and development, writes Gabrielle Monaghan.

Ireland's tight labour market and the ensuing difficulty in attracting and retaining staff means the top challenge for human resources professionals next year will be providing employees with training and development opportunities, a survey by employers' body Ibec has shown.

The number of organisations experiencing skills shortages has increased by more than 30 per cent in the last two years, climbing from 42 per cent in 2004 to 58 per cent this year, according to Ibec's 2006 Human Resources Management Survey.

Six out of 10 organisations polled in the survey said they had increased their workforce in the past year and 49 per cent plan to add more staff in 2007. However, 53 per cent of companies expect staff shortages will continue to be a problem in the coming 12 months.

"Ibec would be the first to acknowledge that if we are to encourage people to be more productive and more flexible at enterprise level, it's important that staff have the confidence and skills necessary to do their job," said Brendan McGinty, director of Ibec's industrial relations and human resources service. "All international evidence shows that companies that invest in training get that back in terms of return on investment and business performance."

The survey found that the level of investment by Irish firms in training rose 25 per cent to 3.91 per cent of payroll from 2004, when Ibec last issued a survey on the subject. Almost three-quarters of organisations in Ireland now have a specific budget for training, while 89 per cent support employees who pursue education outside the workplace.

Unfortunately, there has been little if any improvement in the number of training days provided by Irish employers since 2002 - the average range has remained at between three and five training days per annum for each employee in the past four years, the survey found.

"The extent of training tends to be greater among sectors such as financial services or among companies that have benefited from foreign direct investment," McGinty said. "That is reflective of their outward perspective.

"One challenge we have to meet is to get indigenous companies more focused on training, and the signs are there that this is starting to ring true.

"There are 250,000 small businesses out there and it's important they are all equally committed to training as larger companies are."

It can often prove difficult for human resources professionals and trainers to demonstrate the link between investing in people and organisational success and to persuade managers and employees that it is worth their while taking time out from their jobs to develop their career, the survey showed.

As spending on training increases in private sector Ireland, it is likely that this link will need to be demonstrated in more concrete terms than in the past to sustain this investment.

Training staff is just one of the growing responsibilities of the HR department in the modern Irish workplace.

Organisations are increasingly being forced to adopt a more focused and coherent approach to managing people as the competition for talent intensifies and labour legislation becomes more complex.

While a substantial amount of a HR practitioner's time is still spent on traditional aspects of personnel management, such as recruitment, administration and pay, HR management has become a more vital component of the Irish organisation's broader business strategy.

"There's no doubt as that as the economy has grown, businesses are increasingly seeing value in spending more on HR and general management issues," McGinty said. "Even the HR function itself is much more likely to be represented at a senior level of management at larger organisations and that's significant."

Over nine out of 10 companies with a HR strategy have aligned the objectives of this strategy with their overall business objectives.

Indeed, 64 per cent of the organisations surveyed by Ibec have a designated HR department, and the average number of HR personnel has risen to 1.7 per 100 employees from 1.5 in 2004.

Where there is a separate HR department, that function is directly represented at senior management at 86 per cent of the organisations responding to the survey. Responsibility for HR usually rests with the chief executive or managing director at companies without a designated HR department.

There are discrepancies, though, in HR management between foreign and Irish-owned organisations and between companies operating in the high-tech sector and those engaged in manufacturing.

"Naturally, American multinationals or those from mainland Europe have a legacy of wanting to promote best practice in HR," McGinty said.

"So we have the opportunity to benefit from best practice from around the world and it is being translated into what works in an Irish context.

"Foreign IT and pharma companies have linkages with small and medium-sized Irish businesses, so there's a huge opportunity for Irish companies to learn about best practice from multinationals."

Some 45 per cent of the organisations surveyed by Ibec are foreign-owned.

The majority of non-Irish companies are US-owned, at 45 per cent of the total number of organisations in Ireland, while UK companies, at 17 per cent, are the second-most common foreign employers.

Ibec polled 326 organisations employing a total 88,000 people for its survey.