As an international trading economy, Ireland is heavily dependent on foreign trade and influenced by global markets. Ireland is regularly cited as one of the most open markets in the world and rates highly in globalisation indexes.
Despite recent disruptions in global employment, the Irish labour market remains extremely tight, with a January unemployment rate of 4.3%. In recent months, new job creation has slowed after almost two years of rapid growth. However, rather than a decrease in demand for labour, this is likely driven by the difficulty of filling roles in a labour market where the large majority of the workforce is already in employment. High employment, rising wages and more active recruitment among employers are leading to sharp decreases in people remaining on unemployment supports along with rapid growth in the overall labour force. Ireland’s comparatively young population is entering working age and inward migration of working-age adults into the labour force remains below levels needed to meet skills demands. As immediate concerns around energy costs and supply chains are easing, a dwindling pool of available labour will likely remain a key constraint on growth for the Irish economy over the years to come
Due to the significant changes to the landscape of the Irish economy over 2020 and 2021 as a result of COVID-19, an analysis of potential shortages at occupational level was not possible. However, an outlook for occupations is provided in light of the impact of COVID-19.
Science & Engineering Occupations
Employment grew strongly in this occupational group over the five-year period, particularly in the year since 2020 with an additional 16,000 persons employed. This has been driven primarily by growth in employment in high tech manufacturing. Provision from the third level education system for science and engineering graduates remains strong. However, the strong employment growth for these occupations and the demand for the skillsets associated with scientists and engineers (e.g. critical analysis, problem solving) across a range of other occupations (e.g. public administration professionals, teachers, among others), will ensure continued demand and job opportunities for these roles. Furthermore, the shift towards a low carbon economy is expected to result in a demand for additional skills amongst scientists (e.g. ecology, environmental, conservation), electrical engineers (e.g. renewable and high voltage) and technicians (e.g. solar/wind). Future demand for these occupations is anticipated to be strong, with shortages likely to continue. The shortages are expected to be small in number and, for some, will relate to those with experience in niche areas.
§ analytical, process, and medical scientists
§ engineers (quality control/assurance, process, design, mechanical, electrical, automation, validation) § maintenance/lab technician
ICT occupations had both the highest annual average growth over the five-year period compared to all other occupational groups and the highest absolute growth since 2020. The growth in 2021 was driven primarily by those employed as programmers and software developers and IT technicians. This occupational group had the second highest share of new employment permits issued in 2021, after healthcare occupations. Supply from the education/training system continued to grow steadily with almost 8,000 graduates emerging from the third level system in 2020, primarily at NFQ levels 8-10. The COVID-19 pandemic does not appear to have negatively impacted employment for those in ICT occupations. The significant take-up of working from home amongst those in ICT occupations may have alleviated some of the issues in sourcing suitably qualified staff for these roles through accessing skills from outside Ireland without the requirement to be located here. If employment continues to grow at the rate seen in recent years, however, significant shortages for those with the specific skills in demand may intensify. Skills shortages:
§ IT project managers
§ Software developers/engineers
§ IT analysts/engineers
§ IT technicians with foreign language
Business & Financial Occupations
Employment has grown strongly in this occupational group, particularly since 2019. Just over a third employed in these occupations were in the financial sector with the remainder spread across a range of sectors. Skills gaps in financial services include data analytics, digital transformation, risk and compliance, leadership, and GDPR/cybersecurity. Enterprise Ireland’s Spotlight on Skills data highlights a demand for financial skills, including relationship management, critical thinking, negotiation, commercial acumen, business analysis, financial forecasting, and communication. The imminent closure of Ulster Bank and KBC, along with restructuring within the remaining banks, will impact on future demand for retail banking skills. Many roles within this group have been identified as being at risk of automation, particularly financial administrative roles.
Those employed in healthcare occupations have been particularly impacted by the COVID-19 pandemic in terms of both increased demands for services and exposure to infection. Overall employment levels fell in 2020 but had almost recovered to pre-COVID-19 levels by 2021, with growth particularly evident in the latter quarters of 2021. The employment permit system continues to be a main source of skills for these roles with almost 5,000 new permits in 2021, accounting for over a third of all new permits issued. In June 2022, a number of healthcare occupations including pharmacists, cardiac physiologists, occupational therapists, physiotherapists, podiatrists/chiropodists, psychologists and speech and language therapists, were added to the Critical Skills Occupations List in response to issues in sourcing suitable candidates for these roles. Demand for healthcare services continues to be high as the system deals with the backlog as a result of the pandemic and is likely to continue to be strong for future years given Ireland’s ageing demographics. Future expansion, for the most part, will be dependent on the availability of government funding.
Skills shortages: medical practitioners, nurses
Social & Care Occupations
The majority of those employed in social and care occupations work in the health sector providing care typically for the very young and the older age cohorts. In 2021, some of those employed in the health sector continued to avail of income support payments (PUP and EWSS). Although there is no occupational breakdown for persons on income support payments, it is likely that many of these occupations included here would have had some share in receipt of payments. The impact on employment levels when the schemes ended in 2022, particularly in relation to EWSS, has yet to be realised in the data. National Skills Bulletin October 2022 7 The changing demographics in Ireland (both the fall in the number of 0-4-year-olds and the increasing number of those aged 65 years and older in the population) will be primary drivers of employment for these occupations in the coming years. Skills shortages: healthcare assistants
Labour shortages: care workers
Overall employment levels grew strongly over the five-year period with an average annual growth of approximately 7,600 persons. Future demand for these roles will be very much driven by demographic factors and the availability of government funding. Enrolments in primary schools are projected to decline annually to 2033 which is likely to have an impact on staffing requirements. In post-primary schools, enrolments are forecast to continue to grow to 2024, declining thereafter. At third level, an additional 1,000 places have been announced for 2022. Furthermore, the war in Ukraine has had an additional impact on enrolment figures in the education and training system, as the official enrolment projections pre-date the war. This will create additional demand for teachers across all levels of the education system
Although overall employment grew in 2021, it remained below pre-COVID-19 levels. At the end of 2021, over 14,000 persons in the construction sector were availing of income support payments (a combination of both PUP and EWSS). Government targets in relation to housing and climate action will continue to drive demand for construction-related skills across a variety of occupations (operatives, skilled trades/supervisors, engineers) with future skills and labour shortages potentially emerging. The transition to a zero carbon economy has significant implications for construction-related skills, from green buildings to renewable energy generation; while a small number of relatively new occupations (e.g. wind turbine technician, retrofit coordinator) are likely to grow in size, the most significant impact will be changes in the skills mix of a range of existing occupations (e.g. civil engineers, plumbers, roofers, glaziers, etc) as well as an increased demand for some. The increased construction activity observed since the last financial crisis has resulted in growing numbers of apprentices in construction related trades. Further increases in apprenticeship registration is likely to be required to meet the additional demands arising from Government ambitions. Issues with the supply and increased cost of construction-related materials could dampen demand in the short-term, although Government targets are likely to see continued demand for construction skills in the short-medium term.
Skills shortages: quantity surveyors
Potential skills shortages: civil engineers & construction project managers, plumbers, carpenters
Other Craft Occupations n.e.c.
The five-year annual average employment growth was negative for this occupational group with employment falling between 2020 and 2021. Employment in these occupations was across industry, construction and wholesale and retail, with each of these sectors impacted by COVID-19 at varying levels. A significant share of persons from these sectors remained in receipt of income support payments (both EWSS and PUP) in 2021, with the impact of the withdrawal of these payments in 2022 on employment numbers unknown as yet.
Skills shortages: CNC programmers
Potential skills shortages: welders, electrician
Agriculture & Animal Care Occupations
Employment numbers for agriculture and animal care occupations were lower in 2021 compared to five years’ previously, despite an increase in the most recent year since 2020; this increase was driven primarily by a recent rise in the number of farmers. Brexit, Government targets in relation to climate action, and disincentives to engage in low paid work are likely to impact on employment numbers for these occupations in the coming years
Employment in 2021 for hospitality occupations remained below pre-COVID-19 levels although the significant levels of rehiring for the accommodation and food sector, particularly for part-time roles, was evident in the employment data in the latter half of the year. A high share of those in the accommodation and food sector (where the majority in these occupations were employed) were in receipt of income support payments (both EWSS and PUP) in 2021. The impact on employment levels of the withdrawal of these income support payments in 2022 have yet to be realised in the data. The rising business costs and the potential fall in disposable income due to increasing inflation will likely impact on any further recovery of the sector and demand for these skills.
Skills shortages: Chefs
Transport & Logistics Occupations
Overall employment levels fell for this occupational group over the five-year period, driven primarily by a fall in the number of other drivers/operatives. Employment in the transport sector, in which many of these workers were employed, was slow to return to pre-COVID-19 levels, although the latter quarters of 2021 saw growing employment levels. The continued knock-on effects of Brexit, the supply chain issues that emerged during the COVID-19 pandemic, rising fuel costs and the increasing levels of inflation, will all have an impact on the overall demand for these occupations. Changes in the nature of the roles, due to factors such as automation, technological changes, and the implementation of the Climate Action Plan, will result in upskilling/reskilling requirements across all occupations in this field (e.g. enhanced digital skills, green skills for business).
Potential skills shortages: HGV drivers
Labour shortages: taxi driver
Sales, Marketing & Customer Service Occupations
Employment growth over the five-year period remained below the national average, although overall employment in 2021 exceeded that of 2019. Over two-thirds of persons employed in these occupations were in the wholesale and retail sector, which has been particularly impacted by COVID-19, accounting for a high share of those in receipt of income support payments (both EWSS and PUP). The impact of the cessation of these payments in 2022 is yet to be realised in the data. Rising inflation and a fall in consumer spending will impact on future demand for these occupations. For those employed outside the wholesale and retail sector (e.g. industry), demand for a combination of sales skills with specific industry knowledge and technical expertise persists. Analysis from Enterprise Ireland’s Spotlight on Skills data highlights the fact that skills including consultative sales, technical sales and digital marketing are in demand across a variety of sectors and occupations. The demand for those with both sales and language skills is primarily related to the ICT sector, evidenced in the employment permit data, although the numbers employed in sales in this sector are comparatively small. The difficulty in sourcing candidates with these skills will vary across occupations.
Where are the Workers?
Available additional labour Looking to remaining pockets of the population which could potentially enter the workforce to meet future demand, last year there were about 105,000 people aged 15 and up who self-report that they would like to work but are not available to do so for reasons such as education, disability or caring responsibility, down from 164,000 three years ago. Within this group, the number of people in Ireland who would like to work but are unable to do so due to their illness or disability fell by a third since the beginning of Covid. Likewise, the number of people unable to work due to a caring responsibility has fallen by 14%. The move to remote and flexible working arrangements has likely removed key barriers to these groups participating in the workforce. The social benefit of high employment is also evident among the numbers of discouraged workers and the long-term unemployed, both of which have decreased sharply in recent years.
Migration The recent census estimates a net increase in the population due to migration of 190,000 over the past six years, representing about half of the total population growth over that period. The large majority of these are of working age and in employment, with estimated immigration of 144,000 adults aged 25 to 64 between 2016 and April 2022. As a result, inward migration is a vital component of what little labour market slack remains after several years of rapid job growth. Migrant workers make up a key source of skills within several sectors including healthcare and ICT, with vital roles heavily dependent on sourcing skilled workers through visa programmes. Within healthcare and social work, the 29,600 work permits recipients from the previous five years are equivalent to 9% of total workers in the sector. Similarly, the strong growth of Ireland’s ICT sector and its domestic supply chain has been made possible by the additional injection of international skills complementing the indigenous workforce. Of just under 40,000 employment permits granted last year, ICT, social work and healthcare employees made up a little over half. Other significant sponsors of employment permits are the construction and agriculture sectors.