As outsourcing continues to grow, the pressure is on to align graduates' skills with changing industry needs, writes Caroline Madden

IDA Ireland chief executive Seán Dorgan did his best this week to quell fears over the recent spate of high profile job cuts in the multinational sector, insisting that Ireland remains an attractive location for foreign direct investment.

However, Paul Ryan, a vice-president at the global headquarters of US multinational Avocent, in Shannon, argues that a major overhaul of our education system is essential if we are to retain such companies.

Avocent is a leading provider of IT infrastructure management solutions and has outsourced its manufacturing functions to low-cost locations in Asia and Eastern Europe. Shannon is now responsible for quality control.

Ryan, whose father Michael worked for the IDA and was instrumental in creating the Plassey Technology Park beside University of Limerick, explains that the company's outsourcing model - which is being adopted by more and more companies with operations in Ireland (both foreign and indigenous) - creates a demand for Irish employees with an entirely different skillset than in the past.

"We need recruits to have a broad knowledge set in relation to design, manufacturing, component, processing technologies and customer management skills," says Ryan. "We are faced with a real difficulty in terms of recruiting people experienced in such breadth in a region like Ireland."

Staff are effectively engineering from a distance, he says, and the specific skills required to do this makes it extremely difficult to find suitable recruits.

The lead time to source engineers for quality assurance roles can be up to 12 months. This delay creates "an opportunity for the job to drift away if you can't fill it quickly", Ryan says, as the reality is that his peers in the US could probably fill the same role for the same price within a much shorter timeframe.

"The danger is, if you take exchange rate issues, and potential changes to corporation tax, that from a pure financial perspective you become less competitive," he continues.

"Ireland did extremely well in the early 1990s producing a cohort of the most educated graduates in the world for the technology sector, and that's one of the primary reasons we managed to attract so many multinationals here in this sector," he notes.

The difficulty now is that the third and fourth-level institutes are not producing graduates that meet industry needs.

Instead of hiring junior engineers as they emerge from university, Ryan has had to recruit engineers at the higher end of the pay scale with several years' experience under their belt.

He believes that, with a better balance between training and education at undergraduate level, it would be more feasible for technology companies such as Avocent to hire graduates fresh out of college.

The crux of the problem is that industry is not liaising enough with third-level institutions, nor is the Government taking the initiative on this, he argues. A national framework is required to support this effort but at the moment there is no cohesive effort to assess the current and future needs of industry.

A long hard look needs to be taken at the various curricula universities have in place, particularly for technical degrees, to ensure that they not only support the technical skills required, but also to ensure that students' business aptitudes are being developed.

"The future for Ireland's technology sector has to be in this area, particularly given the challenges from abroad regarding labour costs that has made manufacturing here unsustainable in specific industries," he says.

"We need to develop skills to support outsourcing models so we can retain high value jobs in this country."

"We need to be careful of complacency. My biggest concern is that the methods that stood us well in the past might not necessarily be those that will stand to us in the future.

"We need to keep looking forward to the next five and 10 years, and be prepared for what's ahead."

It's not all doom and gloom though. Ireland has a reputation for being creative thinkers, Mr Ryan says.

"We have an ability to bring creativity to companies we work for and demonstrate new ideas that can be turned into something sustainable for industry and the country, and that is a reputation that is held in very high esteem abroad."

Nevertheless, as more companies adopt Avocent's outsourcing model, we cannot afford to rest on our laurels, and the pressure is on to align our graduates' skills with changing industry needs.