Take a stroll down any commercial street in Ireland and you’ll be hard-pressed not to pass a string of “staff wanted” signs. Businesses have been grappling with staff shortages since the lifting of Covid restrictions last year. Restaurants, bars, gyms say they’re having to curtail services or run their businesses with skeleton teams because they can’t get the manpower.
According to recruitment website Indeed, job vacancies are about 50 per cent above pre-pandemic levels. And yet we’re told by the Central Statistics Office that the number of adults at work in the Irish economy grew by 275,000, or 12.3 per cent, to a record 2.5 million in the first quarter of 2022. Not only that, unemployment, which had soared to almost 30 per cent at the height of the pandemic, has now fallen back to a near-record low of 4.7 per cent.
Experts suggest some workers may be sitting on the sidelines, weighing their options, rethinking their work-life balance, bolstered perhaps by lockdown savings. But that’s too woolly a notion to explain why we have a record number of people working alongside a record number of vacancies. KBC Bank Ireland’s chief economist Austin Hughes suggests “that while the supply of ‘new’ workers is growing substantially as seen in increased participation [in the labour force], demand for labour is growing even faster”. Difficulties in moving from part-time to full-time because of constraints such as childcare and/or benefit entitlements might also be a factor.
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Hughes also highlights the possibility of “geographic mismatches”. Over the past two years, employment in Dublin is up slightly less than in the rest of the country.
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“The likelihood is that post-Covid, demand for labour is probably increasing faster in the capital than elsewhere but housing costs and increased opportunities either local or remote elsewhere mean vacancies in the capital are amplified,” he says.
There could also be sectoral mismatches. “In hot areas such as construction and healthcare as well as ICT, the underlying pace of demand growth is so rapid reflecting structural change, that even with significant increases in labour supply, a shortfall of workers is inevitable,” he says.
Another consideration is that pay rates in some areas may not have adjusted to reflect a shift in the balance of labour market conditions in favour of workers as well as increased living costs.
