The creation last year by enterprise agencies of more than 34,000 jobs "masks record job losses" of almost 21,000 in agency-supported companies in 1999, according to a Department of Enterprise, Trade and Employment document.
The document, prepared for consideration last month by senior officials in the Department, also states that skill shortages and the tightness of the labour market are "fast becoming a significant impediment" to attracting multinational companies to establish or expand operations in the Republic.
Success in attracting foreign investment in the past "was due in no small part to the availability of a pool of skilled labour, an asset that no longer exists", according to the document. Yet continued foreign direct investment is needed to replace the high level of job losses in the lower-skilled sectors where "we are no longer competitive".
Continued foreign investment is also needed for more balanced regional development, according to the paper, The Tightening Labour Market, released following a freedom of information request.
The paper points out that during 1999 the IDA-supported firms lost almost 9,400 jobs, Enterprise Ireland lost almost 10,000 and Shannon Development lost more than 1,600. "A rising trend in redundancies is now apparent. Notified redundancies in 1999 were 6 per cent higher than in 1998. In the first two months of this year, notified redundancies were 26 per cent up on the same period last year."
In a reference to such companies as Fruit of the Loom, the document points out that alongside the boom in the high-tech sector, other sectors are experiencing great difficulties.
"As redundancy typically occurs in declining sectors such as clothing, footwear and textiles, particular attention needs to be paid to assessing/improving the skills of these people."
The Irish clothing and textiles sector is currently considering options for outsourcing some of the lower value-added and lowskill components of its value chain to low-wage locations in eastern Europe and north Africa. This is a consequence of labour/ skill shortages and market pressures for range enhancement, according to the document.
Training for people laid off from these sectors is required. Also "many individuals, particularly poorly qualified young people, are taking up low skilled employment in the current boom. They may not have the skills to find employment if there is a downturn in the economy. Flexible training options, with an emphasis on progression routes, are required to assist these people in upskilling."
The document notes that in response to skills shortages and skills gaps, education and training policies retain a key role. In relation to the general labour shortage, "the key aspect of the policy mix is maintaining the thrust of actions aimed at increasing the reward for work, through fiscal measures (e.g. reducing the burden of taxation on labour)", and providing employability supports.
The document notes that the tight labour market has created opportunities to draw inactive and marginalised groups into the workforce, such as lone parents, women returners, the disabled and young people with weak formal education.
Immigration policy can also play an integral role in meeting labour force needs. A new policy development section is to form part of the Department's Labour Force Development Division. Work permits are to be issued to employers where skill and labour needs cannot be met from within the Republic and the EU. "It is anticipated that some 9,000/ 10,000 permits will be issued this year."
As part of the wider process of mainstreaming services for people with disabilities, responsibility for the employment and vocation training of disabled people is to be transferred to the Department from the Department of Health and Children. Strategies to encourage the employment of people with disabilities have been developed.
"Enhanced childcare provision together with individualisation within the tax code are key policy instruments aimed at increasing female labour force participation," the document notes.
