PricewaterhouseCoopers’ latest ‘Managing Mobility Matters’ report highlights the fact that many employers throughout Europe are struggling to meet skills shortages, with the greatest barrier being the inability to attract foreign born workers to fill senior management positions. Increased labour mobility is a key to attracting these highly skilled workers and part of the solution is a relaxation or removal of some of the regulatory barriers. The launch of this report is timely in the context of the new employment permits regime which came into force on 1 February in Ireland.
The new regime indicates a shift away from traditional work permits in favour of more targeted schemes which focus on high value jobs and skills shortages. The arrangements are designed to facilitate employers who need to source scarce skills from outside the EU area but how successful the new provisions will be in filling some of the higher value job vacancies remains to be seen.
Philip McDonagh, Director, PwC Economics and Public Policy Consulting, and author of the EU sponsored PwC report “Managing Mobility Matters” said:
“In an insufficient EU wide labour pool, managing mobility in an Irish and EU context is critical to getting the right skills where they are most needed. Our report, however, confirms that this does not happen easily and the relaxation or removal of regulatory barriers to allow for greater mobility of workers must be part of the solution. The easing of obstacles to allow for the movement of skilled people from outside the EU will also help to grow the labour pool in Europe.”
Anne Bolster, Director, PwC HR Services, Global Mobility Group said:
“The new regime for employment permits comes at a very welcome time as Irish employers continue to cast their net outside the EU in the search for highly skilled people and will go some of the way in making it easier for companies to recruit abroad. However, this new regime also places an increased onus on employers to comply with immigration legislation. In addition, we urge Irish business to make sure that other factors such as employment tax, social security, pensions and labour law are not compromised when deciding the appropriate employment permit route”.
“The challenge of attracting and maintaining key talent is a cornerstone in maintaining Ireland’s competitiveness and a favourable tax regime that supports organisations who are migrating workers into Ireland is critical. It is ironic that in 2006, which was designated European Year of Workers' Mobility, one of the tax changes introduced by the Irish Government was one which resulted in hampering businesses from importing badly needed skills and experienced resources. The curtailment of the remittance basis of taxation was believed by many multinational employers to be a negative step. To continue to facilitate vital sectors of the Irish economy to assign seasoned executives & specialised resources from the EU and beyond into Ireland at an acceptable cost, we believe that some form of measured alternative tax relief is vital. The recent relaxation of the tax rules relating to assignment expenses for employers bringing supported assignees into Ireland for up to two years is welcome but we believe that more could be done which would further assist the Government’s professed policies relating to developing critical skills and creating high end jobs. It should not be beyond our capacity to create an alternative regime with built in controls, which would assist equity and transparency.”
McDonagh added:
“To facilitate intra EU worker mobility, other crucial steps need to be taken at an individual member state level, such as providing easily accessible information about working and living in different countries. Currently, the process can be intimidating and complex. Employers that want to attract professionals from across borders need to provide assistance for foreign workers to deal with unfamiliar tax and employment systems, and also support them in finding suitable housing and schools.
“Lack of cross border recognition of professional qualifications and barriers to the use of services from other countries have been stumbling blocks in the past, but these are beginning to be addressed. Goods, services and capital flow freely throughout the EU. If workers did the same, European businesses would reap substantial economic dividends.”
ENDS
Notes to Editor:
The lessons learnt from the research which included 445 HR personnel across the EU including 30 companies in Ireland included:
- Cost of labour is now a major business driver;
- European and Irish employers expect to draw from a pool of mobile labour;
- Individuals and employers see many barriers to mobility;
- Mobility is higher at senior management level – raising issues for management development
- Business in Ireland and Europe expect their need for mobile labour to grow in the next five years but there is a mismatch with intentions of individuals.
Key Findings in the research included:
The report indicates that barriers to mobility remain significant. Language skills remain a major obstacle to employee movement for employers across Europe and in Ireland, with over three quarters of Irish companies surveyed citing language skills as a hindrance to recruiting from overseas. Differences in tax systems, healthcare, benefits, the lack of EU-wide integrated employment legislation, and patchy cross-border recognition of professional qualifications can also be a disincentive. The report further highlights how more practical issues such as work and careers for spouses, the availability of housing and schools, and being cut off from family and friends are also significant, with almost one-third of Irish employers surveyed citing those issues as discouraging potential overseas candidates from taking jobs in Ireland.
The Irish companies who participated in the survey were very positive about the benefits of mobility.
Over 50% of Irish companies said that when recruiting, mobility of new employees across the EU was important. Reasons cited for this included:
• To build up business internationally – 57% for Ireland compared to average of 39% on a European basis;
• To obtain appropriate skills – 73% for Ireland compared to 33% on a European basis;
• Improve customer services – 43% for Ireland compared to 33% on a European basis;
• To standardize operations across the EU – 57% for Ireland compared to 24% on a European basis.
However, Irish companies have the most difficulty in recruiting foreign born workers to senior management and professional positions. For example:
• 47% of Irish companies said it was difficult to recruit senior managers compared to 22% at European level;
• Nearly 50% (47%) of Irish companies said it was difficult to recruit professionals compared to 20% at European level.
For the full report contact Johanna Dehaene on 086 810 6542.
