Employees in Ireland are working on average two hours less a week than before the pandemic, according to a new report by the Department of Finance.
While the State’s labour market has recovered strongly from the effects of the pandemic, adding about 440,000 new jobs since 2019, the report found the number of hours people are working per week has dropped from 33.5 to 31.2.
This trend was - in part - linked to an increased incidence of remote or hybrid working arrangements, which now apply to 35 per cent of workers compared to 21 per cent before the pandemic “indicating a lasting shift in working patterns”, the report said.
The drop in hours worked was found to be greater among employees with flexible arrangements compared with those who are office or site-based.
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However, average hours worked also declined among on-site workers and across nearly all sectors of the economy “suggesting that flexible working arrangements are not the primary driver of declines in working hours”.
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Average hours worked tend to fall as countries get richer, the report said.
“As people achieve a certain level of income and comfort, they tend to place a higher value on leisure, leading them to work fewer hours even as their income continues to increase,” it said.
If the decline in hours worked was driven solely by remote work, sectors more amenable to it such as IT (information technology) should have experienced much greater declines in average hours worked, it said.
“This however has not been the case, with the fall in average hours worked broad-based, despite considerable differences in uptake of remote working practices across sectors,” the report said.
It found that the average hours worked fell by about 6.5 per cent in the food and hospitality sector and by 5 per cent in construction, sectors that do not typically lend themselves to flexible working arrangements.
Agriculture had the biggest reduction in average hours worked – down 12 per cent – but this is likely to be explained by the high share of self-employed workers in the sector.
The report, entitled Continuity and Change: Examining Recent Trends in the Irish Labour Market, found that the Irish labour market was in a stronger position now, with a record 2.8 million people at work, than before the pandemic.
The key driver of this employment growth has been inward migration and increased participation particularly by women.
The report noted that net migration of over 75,000 was recorded in both 2023 and 2024 as the economy grew rapidly which “helped meet high levels of labour demand”.
At the same time female participation in the labour force has increased by almost 4.5 per cent since just before Covid. This trend was also linked to the increased availability of more flexible working arrangements.
“While the participation rate of all groups increased, the largest gains were concentrated among cohorts who traditionally have a lower attachment to the labour force, namely women and older workers,” it said.
The report also warned that the State’s headline productivity metrics masked “a persistent productivity gap evident between multinational and domestic firms”.
With employment growth expected to slow as a result of an ageing population and lower levels of inward migration, “productivity growth will therefore become the primary driver of growth over the longer term”, it said.
