Skills shortages push up wages - but many prefer to 'gig' it

There could be a skills shortage in the future in Northern Ireland in sectors like manufacturing and engineering, according to PwC
Gary McDonald Business Editor

BOSSES in Northern Ireland are abjectly failing their employees by refusing to provide them with the necessary skills to do their jobs.

But as a result, they're having to pay nearly a third more in salaries to retain their best talent, as wages generally stay on an upwards trajectory.

And in the coming years, the local workforce could be dominated by so-called 'gig' workers, operating on short-term or freelance contracts, who instead of a regular wage will get paid on an ad-hoc basis for set tasks like food delivery or short-term service.

The findings of two separate industry surveys - one from Brightwater Recruitment and the other from business advisers PwC - have laid bare the changing face of the north's working environment, and pinpointed the sectors where there'll be growth or paralysis.

Brightwater's annual salary survey claims skills shortages and a growth in manufacturing have combined to boost salaries in that sector by up to 28 per cent in roles such as project engineer and environmental engineer, while there's been a significant uplift of between five and 16 per cent across engineering.

The demand for skilled workers reflects the fact that manufacturing in the north has grown almost three times faster than the rest of the UK, with the sector now accounting for 11 per cent of local employment, and forward-thinking employers are having to be more flexible in selecting candidates with transferable skills.

Mid-Ulster is offering some of the best engineering and manufacturing salaries thanks to a growth in demand and lack of skilled staff, and workers say they're happy to commute longer distances for the bigger pay packets.

In general terms, engineers are willing to travel more than 30-45 minutes to work and location is fast becoming an engineer's most important motivation when considering a new role.

The report found that overall Northern Ireland salaries saw a steady rise of around two to five per cent across finance, HR, manufacturing, engineering, sales, marketing, supply chain and accountancy sectors, as employers continue to compete for skilled workers in a high-employment market.

But hard cash, pensions, healthcare and life assurance aren't the only draws particularly for younger workers, Brightwater found.

Because to stop their best people being poached, companies are having to tack on additional perks like free on-site breakfasts, workplace gyms, free fruit, subsidised canteens, yoga sessions, remote working and even duvet days.

Brightwater's regional director Cathal O Donnell said: “The recruitment sector has always been a strong barometer of social and economic trends and this salary survey continues to reflect wider issues and predict future developments.

“Uncertainty around Brexit and the ongoing impasse at Stormont may slow things in the first quarter of 2019, but the signs are that Northern Ireland will become a far more attractive place to do business, and we're already seeing considerable positive movement, particularly within the within back office, shared service centres, engineering and legal sectors.

“All indications are that recruitment requirements will continue in an upward trajectory and that organisations will seek to hire those who will give their companies a competitive edge.”

Meanwhile in PwC's study, just 41 per cent of employees believe employers are providing them with the skills they needed for work in the future while 55 per cent of 18-34 year olds in the UK say they would work in the gig economy.

Janette Jones, partner at PwC NI, said: “HR departments must lead the way in growing and building the capabilities the workforce of tomorrow will require.”

On gig working, she said the flexibility desired by younger generations is recognised by business and HR leaders as increasingly important in attracting and retaining talent (70 per cent). Yet less than half (45 per cent) currently give their employees a high degree of autonomy and control around when and where they work.

Ms Jones added: “Firms need to think about how they embrace flexibility while ensuring workers get a fair deal. Businesses are missing a trick by ignoring the huge value gig economy workers could add to a company and are failing to invest in tapping into this workforce.

"With attitudes changing, and gig working seen as a positive alternative employment model, it should fall to HR to design the recruitment, reward and recognition elements that will attract gig workers and see them return.”

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