Nearly half the companies surveyed for a report to be published today say they plan to increase their employees in the next year, wrties Chris Dooley, Industry and Employment Correspondent.

Staff shortages, however, continue to be a significant problem, particularly for employers in the hotels and catering sector, the report concludes.

The survey of 400 companies, employing a total of 145,000, was carried out by the employers' body, IBEC, and focused on human resources issues.

The findings are indicative of "a renewed confidence in the Irish economy", said the organisation's director of human resources, Mr Brendan McGinty.

Almost half the participant companies said they increased employee numbers in the past 12 months, while 42 per cent said they expected to do so in the next year.

While 30 per cent reduced employee numbers over the past year, only 19 per cent expected to do so over the next 12 months.

A "surprisingly large" number of companies reported staff shortages over the past 12 months, according to the survey report's author, Ms Anne Coughlan, senior research executive with IBEC.

More than a third expected the staff shortages problem to continue over the next year.

It was most acute in the hotels and catering sector, in which 92 per cent of respondents reported difficulties in this area in the past 12 months.

The healthcare and pharmaceutical sectors also experienced significant staff shortages and the survey participants did not foresee a radical improvement in the situation over the next year.

The majority of the companies concerned said the shortages were of skilled, rather than unskilled, staff.

The report, "Human Resources Management Survey 2004", follows a similar exercise by IBEC two years ago and provides a comprehensive picture of trends in human resources.

An increasing number of companies, for example, are operating performance management systems for staff at all levels. In the past, such schemes were restricted to senior managers.

Seven out of 10 companies surveyed have formal performance management systems in place.

An increasing importance is also being attached to reward schemes as motivational tools and to improve performance and productivity.

As was the case in the 2002 survey, commission and individual merit-related schemes were found to be the most effective.

Gain-sharing was reported in the survey to be the least effective scheme.

There has also been an increase in the use of flexible working arrangements, the survey suggests.

Some 82 per cent of companies - up from 78 per cent in 2002 - now have such arrangements in place, and within those companies an increasing number of staff are availing of them.

The most common arrangements were part-time working, flexi-time, job-sharing, career breaks and personalised hours, the survey showed.

There has been no increase in the amount of training time provided for employees.

The average number of training days per annum, which ranged from three to five, was the same as in 2002.