Buoyant labour market lets employees work their way to the top

Increased opportunities and the relatively young nature of the workforce means that Irish workers have the lowest job tenure …

Increased opportunities and the relatively young nature of the workforce means that Irish workers have the lowest job tenure in Europe, writes Claire Shoesmith

Irish and British workers have the lowest job tenure in Europe, according to a study by the OECD, which found that in 2005, Irish workers spent on average just over eight years in the same position.

This compares with almost 12 years in France, more than 10 in Germany and almost 13 in Greece, which ranked top of the job tenure table. In the US, the average was just four years.

The findings are not surprising. Labour laws in France and Germany, especially those that pertain to recruiting and dismissing staff, are much stricter than that in Ireland and the UK.

READ MORE

Add to that the large number of new jobs that have been created here due to strong economic growth and the ensuing increase in confidence that has been lacking in other European countries, and the findings are self-explanatory.

"In Ireland, it's much more of a 'plug and play' environment," says Mary Keating, senior lecturer in human resources management at Trinity College Dublin. "People put themselves out there and behave as an individual commodity."

There is no doubt that the employment market in Ireland today is one dominated by the employee. Where workers were once grateful to have a job and companies had the pick of a large selection of hopeful candidates, firms now have to fight hard to attract and retain the best workers.

While this situation is synonymous with a healthy economy - Irish GDP increased 6.1 per cent last year, compared with 2.7 per cent for the euro zone as a whole - it has also been helped by high levels of employment. The unemployment rate in Ireland stood at 4 per cent in 2006, according to the OECD, compared with more than 10 per cent in Germany and 9 per cent in France.

"There was a time when we would have looked at a CV, seen three jobs in six years and have considered that abnormal," says Keating. "Now it is usual. The boot has moved from the organisations holding all the power to the individual."

Another explanation for Irish workers' desire to move on could be the relatively young nature of the Irish workforce, says Prof John Geary, director of doctoral studies at the College of Business and Law at University College Dublin. According to Geary, young people are much more likely to move jobs than older workers and given that Ireland has the youngest population in Europe - just 11 per cent is aged 65 and over, compared with the EU average of 17 per cent - it is no surprise that the working population is more mobile.

Ireland's scale and size may also play a part when it comes to deciding whether to move jobs, says Keating. She believes workers in Ireland are lucky as most business activity takes place in Dublin, meaning that individuals often have the opportunity to move jobs without having to move home.

According to Geary, there is also a difference in the way workers progress up the career ladder in the UK and Ireland compared to continental Europe.

"Management competence is much less related to the sector in the UK and Ireland than it is in continental Europe," he says. "Here, you can become an accountant, do an MBA and have a ticket to a management position in any industry. In continental Europe, you would study engineering, do a masters and a PHD in engineering and then progress only in that particular industry."

Immigration and the high levels of job creation in the economy in recent years are also likely to have played a part in lowering the average job tenure here, says Prof James Wickham, director of the Employment Research Centre at Trinity College, Dublin.

In 2004, when the 10 new accession states joined the EU, Ireland, the UK and Sweden were the only countries to fully open their labour markets and according to the latest census figures, as of April last year, there were 278,000 foreign nationals in the Irish workforce. In general, these people tend to spend less time in a particular job and as a result, could distort the OECD figures.

The high level of job creation also means that some jobs have only existed for a short period of time, another factor that could reduce the overall job tenure of Irish people.

Still, there seems to be little cause for concern. According to Dr Don Thornhill, chairman of the National Competitiveness Council, eight years is a respectable length of time to stay in one position and a duration that shouldn't cause businesses unnecessary costs. He also says it shows that people are searching out the best opportunities and are more likely to be working to their maximum potential, a factor that is healthy for the economy in the long run.

Adele Bergin, a research analyst at the ESRI, agrees. "A flexible labour market shows that the labour is moving to where it is needed, which is good for the economy," she says, but warns that if everyone is moving for higher wages, then this could put pressure on competitiveness.