Business lobby group IBEC has said that skills shortages and upward wage pressure is leading to an increasingly fierce talent market.

Hybrid working is increasingly seen as key to securing talent for businesses who want to expand headcount, the business lobby group has said.

While hybrid working is a dominant trend in IBEC’s latest HR Update survey, employers also recognise the importance of other employee supports and benefits, such as wellbeing, the right technology, training and appropriate physical work environments.

Attracting talent a priority

Attracting talent is a priority for 59% of survey respondents. Sourcing critical skills, along with upwards wage pressures due to competition for labour, will be among the top recruitment issues for the next 12 months.

Heightened competition for labour is leading to an increased focus on pay and benefits, in particular variable pay and non-pay benefits.

IBEC believes that revitalising the labour market in a new world of work is key to preparing the economy for emerging competitiveness challenges.

Leadership summit

The lobby group is hosting its annual HR Leadership Summit, virtually, today.

IBEC’s Maeve McElwee said: “Relative to our international peers, as an economy, Ireland currently stands to experience significant competitiveness challenges from Brexit, from international tax reforms, and our existing laggard status in completing the low-carbon transition.

“Enacting policies that protect our competitiveness will be the key to weathering an exceptionally volatile external environment, and reaping the long-term opportunities economic re-opening can bring.

“This can only be done by controlling costs where we can, and prioritising strategic investments in innovation, digitalisation and skills,” she said.

Companies need support to meet ambitious low-carbon targets, and targeted interventions in housing are also part of a new economic model, IBEC has said.

Report’s key findings

Other key findings from the report include:

Pay trends – In 2021, a total of 65% of companies increased basic pay, with an average increase of 2.8%. The proportion of employers awarding pay increases will be 75% in 2022, with a reported average increase of 2.71%,

New ways of working – most respondents (62%) will implement hybrid working in their organisation, recognising flexible working as a competitive advantage,

Employee engagement – employee engagement ranks third highest in priority for employers,

Leadership and social influence – leadership is the top area of skills investment (42%) planned by organisations.

The research was conducted in September and included 346 senior HR leaders.