As businesses emerge from the pandemic, they are looking for growth opportunities and new areas to invest in. The strong economic recovery during 2021 has driven increased consumer expenditure as well as business growth, and this is creating new opportunities for companies throughout the country and particularly in the regions as populations were swelled by workers returning to their home places to work remotely for Dublin based employers.
However, many businesses are struggling to avail of those opportunities due to the severe talent shortage. “The biggest obstacle to growth for many businesses is finding talent,” says Austin Sammon, partner, Audit & Business Advisory at Mazars Galway. “Growth opportunities are being stifled by it. It’s a big challenge. I recently spoke to a client with a chain of stores in the food retail sector who has decided to close two of them because he can’t find trained staff. The decision will not have much effect on the bottom line of that firm, but it really isn’t a good solution for any business. It’s certainly not good for the local economy.”
The retail sector is by no means the only one affected, according to Richard Maguire, partner, Audit & Business Advisory at Mazars Limerick. “The issue is not sector-specific,” he says. “We are seeing it across the board in indigenous businesses as well as FDI companies. They are now finding that people from the regions are being poached by firms based in Dublin on the basis that they can work remotely.”
That blade cuts both ways, however, and it is generating new opportunities for professional services firms and other service providers in the regions. “One solution to the issue is to outsource key activities like accounting, finance, recruitment and payroll to trusted partners,” says Sammon. “Outsourcing such activities allow organisations to focus on their core business activity and operations, meet compliance obligations, access specialist expertise without significant investment, increase efficiency and control costs while maintaining continuity of service.
Such clients are not only solving a talent headache but are deriving genuine business benefits because of outsourcing. “By reducing the administrative burden, companies can focus on other areas and growth opportunities,” Sammon points out. “Also, international companies establishing in Ireland can focus their time and energy on setting up and recruiting talent for their core business areas at the same time as streamlining their shared services operations for the EMEA region, which we can manage for them. Those companies tend to have a heavy compliance burden and need the support of taxation and finance professionals who can deliver their reporting requirements.”
Outsourcing to locally based partners in the regions has several advantages. “The shift to remote and hybrid working means there is no longer a need to centralise functions like finance and payroll,” Sammon continues. “Regionalising makes sense for cost and talent access reasons. Outsourcing teams can be located in the regions regardless of where their employees are based. Furthermore, regional locations have become a lot more attractive for employees since the shift to remote working.”
And companies that have traditionally carried out those functions internally are now turning to outsourced solutions due to difficulties in retaining key staff.
Sammon believes locating in the regions will become increasingly attractive in future for both people and companies. Almost 150,000 people are employed by multinationals in Ireland’s regions, accounting for more than half of all multinational employment. The availability of a highly educated and talented workforce and quality of life are reasons why places like Cork, Galway, Limerick, and Waterford are becoming more accessible and highly attractive to workers and multinational companies. Technology hubs like the Limerick Innovation Hub and the Portershed in Galway also play an essential role in offering coworking and collaborative spaces to facilitate our new way of working. “The National Development Plan will inevitably strengthen the regions. Improved infrastructure will make Galway and Limerick more attractive to FDI, and we already have a great educational infrastructure in the west with TUS, UL, GMIT, and NUIG. We are also well supplied with legal and professional services firms to provide the full range of services those companies require.”
The regions are very much on the map for FDI now, Maguire adds. “They may not have been before now, but Limerick was the fastest-growing region in the country for FDI a few years ago. Despite the pandemic, Limerick performed well and welcomed numerous job creation announcements from companies including Regeneron, Legato and Indigo Telecom Group. House prices are also substantially lower than in Dublin, and that is another positive aspect.”
The future looks very bright for the regions, communities, workers and businesses located here
The regional economy is also on the up, Maguire notes. “While many businesses may have struggled in 2020, there was definitely a bounce-back in 2021. It will be interesting to see if that will continue when the Government and other supports fall away. But people are spending more, they want to spend more, and businesses are certainly benefiting from that. You would have thought there would be a lot of nervousness, but we are not seeing it so far. Limerick 2030 will also play a leading role in ensuring the remarkable revitalisation of Limerick city, county, and region.
Sammon concurs. “Galway businesses are also bouncing back. I would have expected people to take the opportunity to reflect and slow down, but they seem to have gone back to their old busy lifestyles. Many businesses are finding it a challenge to keep up with demand now and are turning to Mazars for help. There really has been a significant increase in activity. Look at Shop Street in Galway; it was eerie 18 months ago; it was so quiet. It’s a very different place now. The future looks very bright for the regions, communities, workers and businesses located here.”