It’s no secret that Ireland suffered during the financial crisis and struggled to climb out of an economic slump. But the tide has definitely turned with the country now reporting significant growth, rising business confidence and increasing corporate investment. So where is this boom in activity and what do recruitment firms need to know when placing contractors across the border?
According to the latest figures from the Central Statistics Office (CSO) Ireland’s economy grew by 1.4 per cent in the second quarter of 2017. While this follows a quarter which saw a contraction in activity, the overall picture for the year looks good, with the economy growing at 5.8 per cent annually. When we look at specific industries, the CSO data revealed that almost every sector experienced growth during Q2, with construction and real estate the only fields bucking this trend.
Information Technology is particularly busy at the moment, perhaps unsurprising in a country that has long been considered a global hub of tech innovation. Indeed, the country is home to a number of high profile tech firms including Amazon, Facebook and Google. And judging by latest investment reports, Ireland’s dominance in the IT sector looks set to continue expanding, with venture capitalists investing €499 million into Irish tech firms in the first half of this year.
With this increase in activity comes a growth in demand for specialist contractors. Given the fact that STEM talent is in short supply in Ireland, and indeed across globe, it’s no surprise that international contract professionals are widely used across the industry.
According to a recent survey from Irish-based resourcing firm, Sure Skills, 90 per cent of Irelands’ medium and large organisations use IT contractors, with almost 15 per cent claiming to have in excess of 100 such professionals on their books. This trend certainly looks set to continue with 88 per cent of those surveyed expecting to increase contractor numbers in the very near future.
The hospitality field is also one to watch out for in Ireland. While there will be a level of caution and concern given the possible impact of Brexit on the country’s tourism, there are projects in the pipeline which could result in a real uptick in activity. In particular, if Ireland’s bid for the 2023 Rugby World Cup is successful, the country will not only see a €1.5 billion boost to the economy, but also a vast number of jobs created in numerous sectors, including hospitality.
While construction didn’t perform as well as other fields in Q2, the future certainly looks bright for this sector. In the first five months of this year 7,533 plans were submitted to begin building work, up from the 2,949 reported for the same period in 2016.
And of course the 2023 Rugby World Cup bid also holds the potential to further boost activity in the sector. When we consider that construction has long experienced a skills shortage, we can certainly expect to see demand for contract professionals in this field increase as more projects secure funding.
Tax concerns rife
Ireland has, however, long made headlines in the global clampdown on tax evasion. Large corporates based in the country have faced multiple investigations by the EU for the incorrect payment of taxes, with Facebook, Google and Amazon all coming under fire in recent years for taking advantage of Ireland’s low-tax regime. While some such companies remain under investigation, the fact that tax evasion is such a high priority for European authorities means that we can only expect to see more businesses facing prosecution in the near future.
When it comes to placing contractors here, it comes as no surprise that Ireland has a relatively similar set up as the UK, however recruiters should not be lulled into a false sense of security as a result of this. As part of its commitment to preventing fraudulent activity, the country has signed up to the Common Reporting Standard, allowing for the automatic exchange of tax information across borders. For recruiters this means they can find themselves on the wrong side of the law or facing a possible penalty due to a contractors misdemeanour in another location, so having an expert on international contractor management solutions on hand is certainly recommended.
There are also further calls to overhaul existing tax structures in Ireland in order to produce a ‘fairer’ and more sustainable system, all of which could have an impact on contractor compliance that recruiters need to be aware of. On top of this, Brexit negotiations may impact future movement in and out of the country.
While it certainly looks like change is afoot, particularly in the world of tax, Ireland holds a lot of potential. Recruitment firms can certainly expect to profit from operating in such a booming and innovative economy, provided they develop the partnerships they need in order to stay ahead of tax and employment legislation.