High income tax a barrier to hiring in tech sector

The skills gap cited as a potential threat to the State’s ability to attract new job- creating investment is narrowing, but a new survey has found that barriers to luring talent here remain.

A report published on Monday, Opportunities and Challenges for European Tech Employers, shows that 29 per cent of the Republic's workers are employed in science and technology roles, 23 per cent more than in 2010 and 80 per cent more than at the beginning the century.

According to the figures, the Republic has the fastest growth rate in the number of people working in high-tech posts compared with four other countries also surveyed: the United Kingdom, France, Germany and the Netherlands.

Of the five countries covered, only the UK outperformed the Republic in attracting international job-seekers, with just London’s “silicon roundabout” beating Dublin’s “silicon docks” for the proportion of technology job searches with online hiring agency Indeed, which published the study.

A shortfall in the number of graduates in science, technology, engineering and maths is frequently cited as a threat to the State’s continued ability to draw the multi-nationals on which the State relies heavily to create jobs.

Newly-elected president of the American Chamber of Commerce Ireland, Bob Savage, said over the weekend that a lack of these skills remains a problem. "It's not just the skills themselves, but the creative and artistic skills in that space, that we lack," he said.

Mr Savage, whose organisation represents the 700 or so US companies that employ more than 140,000 people in the Republic, added that more needed to be done to tackle the problem.

Economist with Indeed Mariano Mamertino, acknowledged that the State's skills gap had narrowed in recent years, but warned that the demand for staff with science and technology backgrounds was ahead of supply.

He added that this is good news for those seeking work in those industries in the Republic, as it means that they can get attractive terms and conditions.

“Dublin is now positioned as one of Europe’s leading tech hubs, reaching a critical mass of tech sector activity that drives a virtuous circle of new companies arriving and new demand for skilled staff,” he said.

However, Indeed vice-president, Gerard Murnaghan, said that high income tax was a problem when it came to attracting talent from outside that is needed to help anchor high-tech employers in the Republic.

“The main recurring piece of negative feedback we hear when speaking to potential recruits is the relatively low income level at which the highest rates of income tax kick in,” he said.

“The IDA has flagged this has an issue worth reviewing as the economy improves, and I think that is sensible.”

He noted that those looking to come work in Ireland also raise the availability of accommodation. A shortage of housing has forced up rents and prices in many parts of the State.

“People coming to work in Dublin’s tech hub want to live in attractive apartments, near where they work and pay reasonable rents,” he said.

Indeed is a multi-national on-line job agency with its Europe, Middle East and Africa headquarters in the Republic. It recently announced plans to recruit a further 300 people here by 2017.