Skills shortages undermining productivity, business growth, revenues and profitability in 2021
91% of Irish-based employers have experienced recruitment challenges in the past 12 months. These skills shortages have had significant material impact for Irish businesses, impacting productivity, growth and profitability, according to recruiting experts Hays Ireland.
A total of 50% of Irish-based employers claim ongoing skills shortages have had a negative impact on organisational productivity, 39% say it has undermined their ability to deliver key projects and 30% claim it has stalled their plans for expansion. One in five employers suggest recruitment challenges were impacting their profitability and revenues.
Other prominent challenges cited by employers due to skill shortages include: Employee morale (38%), Business development (27%), Customer / client service (24%), Innovation / creativity (16%), Absenteeism due to stress (14%).
REASONS FOR SKILL SHORTAGES
The majority of employers (68%) cited competition from other employers as the primary cause of their inability to meet their recruitment and retention goals. Other prominent reasons cited included a shortage of new talent entering their industry (33%), individuals leaving to work in other industries (17%) and people moving to other geographic regions (13%).
Significantly, 7% percent of employers cited the reduced access to migrant workers from overseas as a key challenge.
LOOKING AHEAD TO 2022
Over the next 12 months, 84% of employers intend to recruit staff, rising from 78% in 2021. This represents the highest levels of recruitment activity in the last five years. Permanent recruitment is expected to be more widespread, rising to 69%, from 56% last year. Meanwhile, 31% are planning to hire temporary staff, slightly down on 34% in 2021.
In response to ongoing talent shortages, Irish-based employers are currently 35% more likely to make a counter-offer to resigning employees, compared to before the Covid-19 pandemic. The considerations for doing so were, according to those surveyed, to keep talent from leaving (86%), it was the most cost-effective thing to do (51%), to avoid talent gaps (29%) and it provided an opportunity to rebalance salaries for individuals (13%).
UNREALISTIC SALARY EXPECTATIONS
The survey was carried out in early September 2021, also found that overall, 73% of employers expect a continued shortage of suitable applicants in 2022, with 56% anticipating unrealistic salary expectations on the part of applicants.
“The competition for talent has been a universal challenge for Irish-based employers throughout 2021 and we expect this trend to continue into the New Year,” according to Maureen Lynch, director at Hays Ireland.
“In line with the report’s findings, it is telling that nearly two in five Irish employers are more likely to make counter-offers to resigning staff than they were pre-pandemic. This development points to employers’ acute awareness of the ongoing competition for talent, and the time and resourcing that goes into replacing in-demand skillsets”.