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Shift in hiring focus may help fill gaps amid global talent shortage

With growth outstripping workers, building strong talent pipelines is also key to continued success

According to recent figures published by Manpower Group, 77 per cent of employers globally report difficulty finding the skilled talent they need in 2023. This has jumped from 35 per cent a decade ago.

The biggest impacts were reported in Taiwan, Germany and Hong Kong, with figures in Taiwan reaching 90 per cent. Meanwhile, here in Ireland we are above the global average, with 81 per cent reporting difficulties filling roles.

The domestic impacts of this have the potential to be far reaching, from threatening our position as an attractive location for foreign direct investment (FDI), which IDA Ireland has worked so tirelessly to secure, to the chronic skills shortage in the construction sector stalling momentum in the National Development Plan and stymieing our ability to pull ourselves out of the housing crisis.

Hazel Ahern-Flynn, an economist specialising in tax and fiscal policy at Ibec, says that even though the past few years have seen huge growth in our labour force, with more women and younger workers in particular, the growth in jobs still outstrips the number of workers.


“Strong growth both in FDI and among domestic business, and a rapidly growing economy have all contributed to the employment boom,” says Ahern-Flynn. “The Irish labour force is highly educated and record numbers are currently in work, so it’s not a lack of skills so much as incredible growth in demand that’s leading to shortages.”

She warns that one of the big challenges for Ireland in the medium to long term will be “how to accommodate the kind of strong growth we’re seeing in our economy with a labour-force that hasn’t kept pace”.

The challenges around housing are a big constraint. “Ireland is a comparatively attractive place to live in terms of quality of life, with high employment and wages, but when a potential employee can’t find housing or secure a school place for their child, it becomes difficult to bring in additional skills from abroad,” says Ahern-Flynn.

Tackling the gap

Employers are strategising on how best to tackle this gap, by upskilling and reskilling their current workforce and investing more in technology to augment processes.

Katie Ryan, manager in Deloitte’s human capital consulting practice, suggests that employers may need to shift their focus away from traditional hiring models in order to fill skills gaps.

“Often, selection criteria lean towards qualifications and past experience rather than observable skills and capabilities. This offers a narrower view of candidate potential and limits the talent pool,” she says.

Adopting a skills-based lens when recruiting talent, she advises, will provide a broader view of the work candidates are able to do, rather than what they historically have done. Retraining existing staff and developing their careers is more effective than hiring and training new staff – both in terms of cost and the depth of knowledge and experience in-house.

“Organisations who adopt a skills-based approach are 107 per cent more likely to place talent effectively and 98 per cent more likely to retain high performer,” says Ryan. She notes that, post-pandemic, offering flexibility is also key. “Offering flexible work environments that meet the needs of your employees is one of the top ways to retain high-performing talent,” she adds.

The reskilling revolution

Aoife O’Sullivan, head of network development and innovation at Skillnet Ireland, has seen this so-called reskilling revolution in action. “Businesses recognise the important role that reskilling and upskilling play in driving career progression, productivity and employee engagement,” says O’Sullivan. “We are seeing that many of our Skillnet business networks have successfully developed competency frameworks, career pathways and skills taxonomies for their sector or region to clearly map out role-specific skills and associated skills gaps.”

Organisations partnering with education providers and Skillnet Ireland to build talent pipelines is essential to identifying and developing the necessary skills for the future workforce. According to O’Sullivan, sustainability and digitalisation are the two big areas of importance to businesses across all sectors.

“Participating businesses are given the flexibility to determine how, where and when programmes are delivered, in a way that suits the requirements of their business and their employees,” she says. “Our data shows that there is a greater proportion of companies investing in their people each year, with more than 20,000 employees supported through Skillnet Ireland programmes in 2021 alone.”