Ireland was recently ranked first in the world for attracting and retaining talent by IMD, an international business school. In a tight labour market, that’s a great advantage to have. But what’s driving it and is it at risk?
“Ireland is a great place to work and live,” says Anna Scally, head of technology and media at KPMG. “A winning combination of talented people, an enduring commitment to the EU and international trade and an exceptional track record sets us apart.”
The exceptional level of talent available is a key factor. “The Irish workforce is highly skilled and adaptable,” says Scally. “Attainment in higher education is high among 25 to 34-year-olds in Ireland at 58%, which is 17% above the EU average. All of these factors continue to attract investment from multinationals, who continue to not only utilise our exceptional domestic talent but also bring new talent into the country from every corner of the world.”
Ireland also offers a great quality of life.
“The United Nations Human Development Index places Ireland eighth in the world for quality of life based on each country’s health, education and income. While job losses have recently been announced in some tech companies, it is really hoped that those who find themselves out of work will remain in Ireland and help fill some of the other open positions in similar companies,” says Scally.
In addition to a high-quality workforce, Ireland is the fastest-growing economy in the Eurozone and offers easy access to the EU market and international supply chains.
“The quality of our professional services ecosystem is of a very high standard in Ireland, creating a pipeline of talent that US multinationals can rely on. For example, at KPMG, we’ve had over 400 recent graduate hires. Post-training, many of our graduates end up working in the US multinationals across all sectors, so having that consistent access to quality staff is a major bonus for them when setting up in Ireland,” she adds.
In addition, Ireland’s corporate tax and incentives for business such as the R&D tax credit and Knowledge Development Box (KDB) create a very business-friendly environment.
However, while Ireland’s personal tax system is highly progressive, “the entry point for paying the top rate of tax is relatively low, notwithstanding the fact that the bands were increased somewhat in the recent budget to counter inflation. The problems currently facing the Irish economy are largely out of our control and due to global events and, unfortunately, they are not going away any time soon, so more will need to be done to keep Ireland competitive for talent,” she cautions.
Finance Minister Paschal Donohoe’s comments in the budget speech were a very welcome indicator that the government is going to explore more ways to maintain Ireland’s competitive edge, says Scally.
“One such measure mentioned was a potential move towards a territorial tax system, which would help to simplify our tax regime, which would be a very welcome. The minister also announced that the government will create a medium-term roadmap for personal tax reform considering the findings of the Commission on Taxation and Welfare. We suggested in our pre-budget submission that Ireland should introduce a medium tax-band for middle-income earners and that the government should also consider enhancing the R&D tax credit for sustainability-related R&D activities, which would not only enhance our competitiveness but also encourage a more sustainable future in Ireland,” says Scally.
Ireland has a proven track record as a hub for investment. “Our nation’s attitude enables companies to set up swiftly, with minimal red tape, in a connected English-speaking and common-law environment. We offer certainty to the multinationals, certainty of our commitment to the EU, certainty of legal and tax treatment, and certainty of access to the EU’s single market and global talent and skills,” explains Julie Galbraith, employment law partner at law firm Eversheds Sutherland.
“Our talented and youthful workforce is well-educated, mobile, ambitious and adaptable. As a country, Ireland combines competitive salaries with a high standard of living to attract talent from every corner of the world. It is the people, rich with creativity, skills and culture, who drive Ireland’s and its FDI investors’ success.”
Despite all the challenges of the past couple of years “and notwithstanding the ongoing accommodation situation”, Galbraith believes that Ireland will continue to develop as an international platform and legal hub.
Ireland has also long been known as a hotbed of creativity and innovation, says Mitchell Cash, director of talent acquisition and people analytics at Fidelity Investments Ireland.
It has an international reputation for producing some of the best scientists, engineers and technologists in the world. “But with this reputation comes a responsibility: it is vital that Ireland has a strong pipeline of STEM talent and cohorts of academically outstanding future research leaders with the skills and knowledge required to address the future challenges of an ever-changing work environment,” says Cash.
His company’s feedback from relocating talent is that Irish people are by and large warm and hospitable. However, he cautions that “systematically Ireland is less welcoming”. Concerns with the housing shortage, the cost of living and the complexities and inefficiencies within the immigration process are among the most-cited reasons talented people have declined opportunities here.
“Ireland is a great place to live and work but we need to make it easier for new talent to move and settle here,” says Cash.
As well as being the only English-speaking country in the EU, the Irish market is unique in that it is the European base for several global organisations across many industries, including technology and pharmaceuticals, points out Valarie Daunt, partner and human capital management lead at Deloitte Ireland.
“The Irish market has experienced continued economic growth and increased demand for talent. We have had great success in attracting FDI to our shores, with the 2021 Global Talent Competitiveness Index ranking Ireland as number one globally in this regard. To put this into perspective, the American Chamber of Commerce, in its 2022 US-Ireland Business Report, stated that US multinationals alone have 190,000 direct employees in the country with an aggregate payroll spend of circa €12.4 billion annually,” says Daunt.
For Ireland to remain attractive in what is an increasingly global talent pool, we need to reflect on not just our successes but also our areas of improvement. “The strong FDI we have experienced in recent years has prompted a strong inward migration of talent to the country. This influx of workers, coupled with a pre-existing shortage of housing in Ireland, has dampened the demand to move into an already saturated market. These factors are reflected in the Deloitte 2022 Gen Z and Millennial survey, which found that 56% of Irish millennials consider the cost of living to be the greatest challenge for their generation compared with a global average of 30%,” says Daunt.
