Subscriber OnlyIreland

More jobs than workers: can Ireland’s tight labour market be fixed?

Shortages are becoming ‘normalised’ in some sectors, with housing high on the list of chief culprits

One of the more glaring ironies amid all talk in recent weeks of worsening labour market shortages around Ireland is the suggestion that the country requires an additional 10,000 or so one-bedroom apartments to accommodate the overseas construction workers it needs.

Unemployment is now at record-low levels, with the 3.8 per cent rate reported in May eclipsing the figures seen in the early 2000s at the height of the Celtic Tiger. With such numbers already in work, there are challenges for businesses seeking to fill roles. The most recent Central Statistics Office figures, contained in its Labour Force survey for the first quarter of this year, put the total number of vacancies across the economy at 30,300.

Trayc Keevans, global foreign direct investment director at recruitment firm Morgan McKinley, mentions the housing estimate as she lists the many sectors in which clients are experiencing difficulties getting staff.

She talks about the particularly acute shortage of quantity surveyors and the fact that overseas candidates hear about the salary on offer and assume it will bring them a certain quality of life, then realise they will have to share a house with strangers due to the accommodation situation here and, in some cases, lost interest.


“It’s a type of housing people used to moving around for work expect to have access to,” says Keevans, “and providing more of them here would free up existing houses that are being shared for families while making it easier to attract more to Ireland to fill the roles.”

Engineers, project managers and cybersecurity specialists are three of many roles in heavy demand. “We are taking calls from very stressed clients in some instances saying ‘we need this talent now’ ”

—  Trayc Keevans of recruitment firm Morgan McKinley

This is one of many factors contributing to labour shortages across the economy as unemployment drops to a level most would have believed unthinkable just a couple of years ago.

Engineers, project managers and cybersecurity specialists are just three of many roles Keevans says are in heavy demand. “We are taking calls from very stressed clients in some instances saying ‘We need this talent now’.”

Skill shortages are also biting across sectors as prospective employers struggle to find fits for specific roles. Mary Connaughton, director at the Chartered Institute of Personnel and Development (CIPD), says 90 per cent of companies in a recent survey conducted by the institute say they have these issues. “It’s getting worse and it’s becoming normalised,” says Connaughton, adding that 40 per cent of firms say the location of their business has become a significant factor as people increasingly seek to avoid places with scarce or very expensive accommodation.

“We had the Minister [of State for Employment Affairs, Neale Richmond] at our conference last month talking about the prospect of 5 per cent growth, and then we have 3.8 per cent unemployment and those two things are difficult to gel,” she says.

The tightness of the market varies from sector to sector. With 2.61 million people in employment, it is one of the lowest vacancy rates in Europe, but it is more than double in public administration and defence (3 per cent) what it is in information and communication technology (1.2 per cent) after what has been a comparatively rough few months for employment in the tech sector.

In health it is just 1.1 per cent, but the scale of the problem in that sector was highlighted at a HSE board meeting in March, which heard that although the organisation needed to recruit the equivalent of 11,991 full-time staff in 2023, it estimated it could get just 6,010.

In the case of hospitality, the CSO suggested there were 1,100 vacancies at the end of March. However, those in the industry suggest the figure does not give a full sense of the problems being experienced by bars and restaurants a few months on, as the summer gets into full swing.

Paul Lenehan says hiring staff for his four hospitality businesses in Kildare is not really the big challenge: it’s keeping the ones who show real talent after starting.

Lenehan, who is also president of the Restaurants Association of Ireland, has about 150 staff in his three gastropubs and one cafe/delicatessen, which also offers some accommodation. He says students tend to be far less keen to take on bar or catering work than when he was starting out.

In the short term they could fill gaps in his rosters, but the bigger issue, he says, is that such shifts were previously a way into a sector that a portion of part-time workers then decided they would like to make a career for themselves in.

“I think Covid sort of accelerated that process,” he says. “We lost a generation of 18-, 19-, 20-year-olds who weren’t looking for those jobs. We’ve missed them.”

The changing nature of vocational training has had an impact too, he says, with the likes of trainee chefs now far harder to find for shifts at weekends.

He says education should have a huge role to play in making young people more aware of the potential for careers in a sector that employs about 175,000 people.

Apprentices are not covered by minimum wage legislation. Why would a young adult sign up to work in all weathers for a fraction of what the local German supermarket will pay? So a simple answer is decent pay and conditions

—  Laura Bambrick of the Irish Congress of Trade Unions

For Laura Bambrick, head of social affairs and employment policy at the Irish Congress of Trade Unions, the key issue is more immediate. “The sectors struggling most to fill vacancies are those with the worse pay and working conditions – hospitality, homecare, childcare etc,” she says.

“Construction also. Apprentices are not covered by minimum wage legislation. Why would a young adult sign up to work in all weathers for a fraction of what the local German supermarket will pay? So a simple answer is decent pay and conditions.”

Lenehan says there “is good money to be made” in bars and restaurants. “There’s 18-, 19-year-olds working for me probably coming out with a net income of €350-€400 and then making a fair whack of tips on top of that. So the money at that stage is quite sustainable, and then as people move into other roles, cheffing, junior managers ... it improves quite a bit. I think most people in the business would say that, if we can get the right staff, we will pay the money.”

Bambrick points to the relatively high numbers of people in Ireland who are not currently available for work but would be if issues such as caring responsibilities or disabilities could be accommodated. Connaughton says this has, over the past two years or so, become something that more companies are seeking to explore, with a growing number making more targeted efforts to recruit older workers, parents or people who might feel they lack the skills required to find a job.

Providing more training is an important part of the approach, she says.

Ictu says the Government’s role is crucial, with the provision of more affordable childcare just one example of how some people, mainly women, could be helped move into employment or shift from part-time to full-time work.

Richmond insists this is a priority, as is improved accessibility to work permits where they are needed, along with visas. Some 70,000 people came to work in Ireland last year, 40,000 of them from outside the EU.

A public consultation on the critical skills list is planned for autumn, says Richmond. The transferability of visas is to be provided for under legislation working its way through the Oireachtas, and a pilot scheme involving 200-220 seasonal permits in the horticulture sector will be operational in 2024, he hopes.

The Government is increasing college and other training places in nursing and other areas, he says, and investing to help those marginalised back into the workforce. But while the economy remains strong, large numbers of new arrivals are likely to be needed and that will be facilitated.

“It’s about societal as well as economic needs,” he says. “We need x amount of nurses, we need x amount of care workers and that’s not necessarily an employment or economic driver, that’s a massive social driver.

“We’re a rapidly growing economy, a really rapidly growing society. We do have a young workforce but if we have ambitions to grow society further, we do have to be open.”