ZARA DUFFY: Investment Summit highlights the need for skills
THE recent investment summit was a real positive for Northern Ireland, but it does highlight one area where we need to improve if we are to keep attracting investment. Worker retention and attraction continue to pose major problems for businesses here.
Some 68 per cent of organisations are reporting skills shortages and despite best efforts, the situation shows little sign of improving. Added to this, digitalisation and automation continue to augment the demand for skills that are already in short supply.
This is a relatively new problem for Northern Ireland. Historically, we have been more concerned with job creation than filling jobs, but recent statistics indicate the number of payrolled jobs in the region stands at 814,000; an increase of 1.7 per cent over the previous year. 70 per cent of these jobs are in the private sector.
Northern Ireland’s ability to attract investment in the technology sector has resulted in a huge demand for qualified candidates.
Last year alone, almost one quarter of jobs advertised were digital technology roles. If the region is to continue to be the number one international investment location for US cyber security firms and also enhance growth across other industries, innovative ideas are needed to seek out not just hidden talent but also ways to train and upskill current workers.
Businesses starved of staff could also look to recruit from the one third of women who have left the labour market to look after family and home.
Many of these women cite childcare availability issues as a barrier to re-entry so a plausible solution would seem to be a government that invests in better childcare and improves access to paid parental leave.
In addition, research suggests that the cap limiting the number of Northern Ireland students that can attend university in Northern Ireland encourages these students to pursue third level education in other parts of the UK and once they leave only 12 percent return.
Another way to attract and retain staff might be to enable workers to take a share in the business that they work for.
Employee ownership is an idea that works economically, but it’s not an area that’s given a huge amount of attention. With skills shortages at crisis point in many industries, and wages failing to keep pace with the increased cost of living, it might just be worth considering.
And employee ownership is an area that has piqued the interest of the UK government. A consultation examining whether employee share schemes can be shaken up to help boost economic growth is currently open.
While these arrangements are often viewed as complicated to understand and tricky to implement, a study by HMRC earlier this year showed that 81 per cent of organisations said these schemes have helped them retain staff and in turn boosted their business.
Examining the reasons behind setting up a share scheme, half of companies said that they wanted to create a feeling of ownership among their workers, to attract skilled workers and to improve morale.
Figures for 2020-21 show that 380,000 employees were granted Save As You Earn share options worth nearly £2.6 billion in the UK for that year while employees participating in Share Incentive Plans (SIP) schemes received shares worth £780 million.
At a time when there is a need to experiment with new approaches to address skills gaps, and poor benefits and salary expectations are often reasons for staff turnover, share schemes may be part of the answer.
Research in other countries shows that businesses with employee ownership schemes show better productivity and retain top talent for longer. That’s a win-win.
:: Zara Duffy is head of Northern Ireland at Chartered Accountants Ireland