The Institute's Head of Northern Ireland, Zara Duffy, considers the employment market and wonders whether we need more jobs or more people.
Businesses across Northern Ireland report recruitment as one of their biggest challenges, noting difficulties in talent attraction and retention in the current market. In March 2022, record high levels of employment were recorded across the region with the latest estimates indicating the number of payrolled jobs in Northern Ireland standing at 775,000. Rising wage costs are not helping and in this ongoing period of high inflation, three quarters of businesses across the UK are concerned about the impact labour shortages are having on their competitiveness.
This is a relatively new problem for Northern Ireland. Historically, we have been more concerned with job creation than filling jobs. It may well be time that policies designed to attract investment are re-examined, leaning more towards value than role creation.
In the meantime, however, is the solution to the region’s worker crisis already staring at us? Businesses starved of workers could recruit from the one third of women who have left the labour market to look after family and home. Many of these women cite childcare availability issues as a barrier to re-entry so a plausible solution would seem to be a government that invests in better childcare and improves access to paid parental leave.
A medium-term solution to the problem might be to revisit the caps on the number of students Northern Ireland’s universities can accept. Unlike in England where full fees apply, students are only responsible for a portion of the cost of attending university in Northern Ireland, with the remainder covered by the Department of the Economy. To allow Government to control its spend on these grants, this approach results in a limit in the number of Northern Ireland students that can attend university in Northern Ireland.
Some research suggests that these caps encourage nearly a third of Northern Irish students to pursue third-level education in other parts of the UK and once they leave, only 12% return. More encouraging numbers from the Higher Education Statistics Agency show that only 16% of 2018/2019 graduates from Northern Irish universities left the region for work.
Northern Ireland’s ability to attract foreign direct investment, particularly in the technology sector, has resulted in a huge demand for qualified candidates. Last year alone, 23% of jobs advertised in Northern Ireland were digital technology roles. If the region is to continue to be the number one international investment location for US cybersecurity firms, we must establish how we plan to continuously grow and nurture our people to give them the skills required to fill these roles.
In the short-term, businesses might need to look outside of Northern Ireland to bridge the gap. Newcomers from outside of the UK and Ireland will need a visa to work in the region and employers will in some cases need a sponsor licence to employ workers. The length of time this process takes will be central to the success of getting workers in to fill roles. Removing some of the red tape to make it easier for businesses to meet their staffing needs will need to be explored to open the doors to global talent.
In the background, the trend towards automation continues. Additional capital expenditure in this area is expected, as employers look to find ways to minimise their dependency on employees, with the belief that this investment will provide long-term dividends.
The growth in opportunities for skilled employees has resulted in difficulties in staff retention. Businesses with deep pockets may be able to meet the calls for higher wages, but not all can. Alongside this, some smaller businesses are losing staff to those offering more flexible working arrangements. Candidates are holding a lot more cards, leaving employers in a tricky position.
In the end it will all come down to the economic theory of supply and demand. At the moment, we have the jobs, we just need the people.
Zara Duffy
Head of Northern Ireland at Chartered Accountants Ireland
First published in The Irish News on 24 May 2022
LOADING...