Shortages in skills likely to remain for the near future

Dear Santa,

Dear Santa,

Please could you give me 50,000 skilled professionals. I am particularly looking for ones with IT, accounting and finance skills. I promise to give you a healthy benefits package and ample bonuses if you help me out with this, and with our share option scheme you will surely benefit from our future expansion. Lots of love, The Irish economy.

So would run Ireland's Christmas list if it were written by the personnel directors of most Irish companies. The shortages of skilled labour have continued alongside the expansion of the economy this year, and look unlikely to be resolved in the near future.

The Minister for Finance, Mr McCreevy's plans for the individualisation of taxation were clearly one attempt to address this problem, by encouraging people working in the home to rejoin the labour force. Another important element was his move to lower the tax burden, particularly for high income earners. Whatever your view on the equity of this move, it has been welcomed by employers who are increasingly looking to recruit from abroad, having exhausted all the available options within the State.

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For people thinking of moving to Ireland from say Britain, or the US, Ireland's income tax regime has looked particularly punitive, and the indication that the top tax rate will continue its downward trend will help encourage those with skills to move to Ireland.

Last year more than 40,000 Irish returned to work here, and this trend is likely to continue. Organisers of the High Skills Pool Recruitment Fair expect their annual conferences in Dublin and Cork, aimed at tempting emigres who have returned for Christmas to stay for good, will be better attended than ever.

Ms Caroline Leacey, managing director of High Skills Pool, draws attention to a recent Economic & Social Research Institute (ESRI) report which showed serious labour shortages in the economy, particularly for computer professionals and workers in related technical areas.

"We have got to find ways to encourage Irish professionals living abroad - and professionals of other nationalities - to come here for at least a few years as part of their career development," says Ms Leacey.

Tempting people to move to Ireland seems to be the main short-term solution to the skills shortage. Enterprise Ireland has addressed the skills shortages in the software and electronics industries by setting up its Opportunity Ireland website to recruit people from abroad. Within its first year, 1998, the site registered more than 3.5 million hits. Jackie Fitzgerald, director of the project, liaises with companies who are looking for staff, and posts are advertised on the site.

By May of this year 122 people were recruited through the site. Although there were a number of Irish people returning, the site had also attracted a number of foreign nationals including software professionals from as far afield as Russia and India to come to work in Ireland.

One problem for employers has been the length of time it has taken for work permits to be processed, although this has recently been reduced from a number of months to a matter of a few weeks. To recruit an employee from outside the European Economic Area (EU countries plus Norway, Liechtenstein and Iceland) employers must demonstrate that they have made every effort to recruit someone from within the EEA. Increasingly the authorities are recognising that companies cannot fulfil their labour requirements in some areas from within the State.

Cylon Controls, a company which develops computer equipment for building control systems, has used the Opportunity Ireland site in its recruitment efforts. It now has employees from South Africa, France, Italy, New Zealand and the US. Operations manager Mr Gerald Mulvey says that unfortunately recruiting is taking up far more time and money than it had planned for.

"It's an employee's market if you've got the right skills to sell," says Mr Mulvey. He points out that the biggest winner of the current shortages is the large number of recruitment agencies it has spawned.

Ms Olivia Galvin, manager of software development recruitment at IT recruitment specialist CPL, confirms that it has been a very busy time in the recruitment business.

The main area of shortages, according to Ms Galvin, is IT professionals with two to five years experience. Recent graduates are obviously always in demand and with a good IT-related degree they can command starting salaries of £17,000-£21,000 (€21,585-€26,664), but the real shortage is in people who have already worked for some time in the IT field.

CPL recruits extensively abroad and has recently found eastern Europe a good source of highly skilled computer professionals. Persuading Irish people to return is again an important target for the company, and Ms Galvin says that people are particularly keen to return home if they are settling down and starting a family.

Looking to next year Ms Galvin believes that the demand for people is going to continue to grow. A lot of companies are waiting until Y2K fears have passed before starting on new projects, she says, and the approaching introduction of the euro will require further updating of computer systems.

The two big issues for people coming to Ireland are high tax rates, and high house prices. Ms Galvin believes the Budget was a step in the right direction, but will not resolve the demands of her clients overnight.

"I'd love to talk to anyone with software skills," she says, "it's what keeps me awake at night."

Looking to the medium and long-term future the Government has set up a strategic group to help plan for the future labour needs of the economy. The Expert Group on Future Skills Needs was formerly chaired by Mr Chris Horn, chief executive of Iona, but now has Dr Daniel O'Hare at the helm.

One of the group's first initiatives was the recommendation of an increase in the number of third-level places on IT courses. Dr O'Hare predicts that this will help bring the demand and supply for IT graduates into balance by 2003. However in terms of companies looking for workers with experience, he points out that it's a worldwide problem that the industry is facing which will take time to resolve.

One area that companies can take the initiative in is by improving the skills of their current work force. Dr O'Hare believes that offering employees training is an important way of encouraging them to stay with the company, whilst also providing potentially large rewards to both parties.

As an example he cites Motorola's commitment to seven days of training per year per employee which it plans to increase to 10, with professional staff receiving 30 days per year.

"That's the kind of investment in staff training we need to see," says Dr O'Hare. "I would think that IBEC and ICTU could see common cause in that."

One of the next big items on the Expert Group's agenda is to increase the numbers of chemical and biological science graduates. With a big investment in these sectors projected in the National Development Plan it is hoped that though planning the education system can prepare to meet any anticipated skills shortages in advance.

Unfortunately the rapid pace of growth in the economy meant such foresight was not possible in the past and hence some of the current problems. In the meantime recruitment agencies can keep rubbing their hands together, graduates can cherry-pick jobs of their choice, and employers will have to cross their fingers and keep writing those letters to Lapland.