Take a walk down any shopping street in Ireland and you’ll find it hard not to pass a series of “Staff Wanted” signs. Companies have been dealing with staff shortages since the lifting of Covid restrictions last year. Restaurants, bars, gyms say they have to cut services or run their businesses with reduced teams because they can’t get the labor.
According to the recruitment website Indeed, job postings are 50 percent above pre-pandemic levels. And yet the Central Statistics Office tells us that the number of working adults in the Irish economy grew by 275,000, or 12.3%, to a record 2.5 million in the first quarter of 2022. Not only that, unemployment, which had spiked to nearly 30 percent at the height of the pandemic, has now fallen back to a near-record low of 4.7 percent.
Experts suggest some workers may be sitting on the sidelines, weighing their options, reconsidering their work-life balance, perhaps bolstered by savings from the shutdown. But that’s too vague a notion to explain why we have a record number of people working alongside a record number of job openings. KBC Bank Ireland Chief Economist Austin Hughes suggests that “while the supply of ‘new’ workers is growing substantially as seen in a greater share of [in the labour force], the demand for labor is growing even faster.” Difficulties transitioning from part-time to full-time due to limitations such as child care and/or benefit entitlements may also be a factor.
Hughes also highlights the possibility of “geographical mismatches.” In the last two years, employment in Dublin has increased slightly less than in the rest of the country.
“Most likely, post-COVID-19 labor demand is likely to grow faster in the capital than elsewhere, but housing costs and increased opportunities, whether local or remote in other places, they mean that vacancies in the capital are expanding,” he says.
There could also be sectoral imbalances. “In hot areas like construction and health care, as well as ICT, the underlying pace of demand growth is so fast, reflecting structural change, that even with significant increases in labor supply, worker shortages are inevitable. “, He says.
Another consideration is that pay rates in some areas may not have adjusted to reflect a shift in the balance of labor market conditions in favor of workers, as well as a higher cost of living.