Close to half of HR professionals in Ireland believe the remuneration packages they are offering their best employees are no longer sufficient, according to a new survey which highlights a jump in skills shortages locally.

The majority of HR leaders surveyed by PwC said they intended to amend their reward system over the next 12 months to take account of a changing labour market with 43 per cent set to make changes to annual bonus plans. Forty percent said they are also likely to tweak healthcare benefits over the next year while 37 per cent had plans to adjust performance measures to incentivise pay.

The study reveals that almost half of respondents have not gathered feedback from employees on current benefit offerings in the last two years while 77 per cent do not tailor reward offerings to take account of the different generational needs of their workforce.

Three-quarters of HR leaders said they plan to increase headcount this year, compared to just 37 per cent two years ago. However, some 61 per cent said they are experiencing difficulties hiring with acute shortages particularly evident in the technology, commercial and digital skills areas.

Some 40 per cent of those mentioning shortages said these are impacting on their business with some key initiatives having to be cancelled or scaled back.

One in four of those surveyed said that recruiting specialists and those with leadership skills to Ireland is proving a challenge, although this has eased from 44 per cent a year ago. Income tax levels and the high cost of living in Ireland are cited as major drawbacks in attracting talent.

The study indicates that less than half of companies measure employee engagement annually or more frequently.