Possessing a good corporate reputation ranks higher as a strategy for retaining staff than competitive pay packages, a survey of Irish business has found.
The finding was part of an international survey of owners of medium-sized businesses by Grant Thornton.
The Autumn 2004 survey found that 25 per cent of Irish respondents felt a skills shortage was hampering their expansion plans.
More than half of the Irish respondents were found to be more focused on attracting and retaining key staff, than they were a year ago.
When asked what factors were most important in retaining staff, owners said the top five strategies were: good corporate reputation (69 per cent); mentoring for leadership positions (60 per cent); ensuring understanding of the company's core values and goals (59 per cent); monitoring employee perceptions and acting on results (50 per cent); and competitive compensation packages (46 per cent).
Mr Gearoid Costello, of Grant Thorton Dublin, said particular sectors are suffering more than others, citing engineering, construction, financial services and certain high tech sectors.
At a launch of the survey in the Chambers of Commerce of Ireland office in Dublin, Mr Costello said employers and employees were realising the importance of corporate reputation as opposed to relying only on money to retain staff.
Mr Conor Brennan, deputy chief executive of the Chambers of Commerce of Ireland, said the current skills shortage was a direct result of Ireland's current full employment.
He said the current influx of highly qualified non-national workers in Ireland was an invaluable resource to Irish business.
"The Government must act to reduce the red tape encountered by non-national workers and create an environment in which they encounter fewer barriers to working in Ireland," he said.
The International Business Owners Survey 2005 also reported on the average increase in stress levels in the 24 countries surveyed, compared with the previous year.
Ireland's increase was just above average, at 30 per cent. Taiwan, Russia and the Philippines recorded the highest increases, at 61 per cent, 48 per cent, and 46 per cent respectively. The Netherlands came at the bottom of the table, at 5 per cent.
Ireland came third in the survey in terms of optimism, scoring a 79 per cent increase in optimism, as against a 7 per cent increase in optimism among Irish respondents the previous year.
The optimistic outlook among Irish business owners was exceptional in the euro zone.
Only India and South Africa scored higher for optimism than Ireland did.
