A third of firms are struggling to access the workforce across the island, according to a new report from IntertradeIreland. Data from the organisation, which helps small firms trade across the whole island, shows that 145 businesses are struggling to find people to fill long-term positions while some 55 businesses have short-term gaps in their companies.
Impact on Sectors and Businesses
The latest findings from the survey, which takes the temperature of 750 SMEs every quarter across the island highlights that a third are in growth mode, while 56 per cent are stable, continuing a positive trend since the start of 2024. However, a persistent issue is access to people. 1 in 3 firms are struggling to find the right skills for their business. Over half of these (58 per cent) are experiencing long term vacancies while nearly a quarter (22 per cent) are dealing with short term skills gaps.
The construction, manufacturing and leisure, hotels and catering sectors along with companies reporting growth and those with 11-49 employees are feeling the impact of a tight labour market.
Finding Solutions: Embracing Technology and Increasing Recruitment
When asked about the steps that firms are taking to address any skills gaps, close to a third (31 per cent) of all businesses with more than 3 staff said they are embracing new technologies. For those that are struggling to access skilled labour, just over half are increasing recruitment activity and widening their search. Fewer (16 per cent) are investing more in training and development.
Economy Minister Conor Murphy said: “The employment figures are extremely strong at the moment, which is a signal of a buoyant economy across the island. As part of my focus on good jobs and regional balance, we are working closely with employers to ensure a correct skills match-up for their needs. I have recently announced a number of skills academies across the north which help to provide employers with the skills talent that they require.
“I would encourage businesses to avail of supports available from economic agencies, including InterTradeIreland, that focus on improving innovation, efficiency and driving productivity.”
“My Department will also continue to work with InterTradeIreland, Enterprise Ireland and Invest NI to ensure businesses are able to fully maximise the opportunities that dual market access presents.”
Beyond the Skills Gap: A Positive Outlook for Businesses
As an indicator of economic demand, over a quarter of businesses saw sales rise in Q2 while 1 in 3 expect sales to rise in the next 6 months. 7 in 10 are profitable, helped by the easing of the significant energy and wider cost pressures that have pervaded the business economy over the last couple of years, although cost pressures remain the most important concern for businesses.
The survey also asked businesses how they have adapted to Brexit – a third responded that they are not impacted, 46 per cent indicated they have adjusted in full or to a large extent while 21 per cent say they have only adapted to a small extent or not at all.
Precision Engineering firm Exact Group from outside Newry works in the agriculture, aerospace, medical and marine space. It’s NI Director of Operations, Ronan Callan, says “We are invested in up-skilling staff and we are also taking advantage of dual market access to grow our business further as we supply right across the island and Great Britian. Our order book is in a strong position.”
A Lack of Awareness: The Windsor Framework
Overall, 62 per cent of businesses surveyed say they have no knowledge at all of the Windsor Framework. While it is not applicable to all, it is still likely that a significant proportion of firms would benefit from a better understanding of the outworkings of the Windsor Framework.
Director of Strategy for InterTradeIreland, Martin Robinson says “InterTradeIreland has developed a Trade Hub which is a powerful resource for business, providing information, advice and support for SMEs who want to know more about customs, VAT and cross-border employment and includes a fully funded trade health check. There are also changes coming in for businesses receiving parcels from Great Britain. If any firm needs help to prepare for these changes we can provide practical support. I would encourage businesses to contact us to see how we can help provide the answers to their questions and the practical support they need to grow their cross-border trade.”
Looking Ahead: Opportunities and Challenges
The report highlights that while businesses are generally stable or growing, the ongoing challenge of accessing a skilled workforce remains a key concern. The ability to address this skills gap will be crucial in ensuring sustained economic growth for businesses across the island.
However, the report also points to positive signs, such as increasing sales and profitability. The easing of cost pressures is another positive factor. Businesses need to continue to adapt to the evolving economic landscape, including the impact of Brexit and the ongoing challenges in the global economy.
This report presents a mixed picture for businesses across the island. While there is evidence of growth and stability, the skills shortage remains a significant obstacle for many firms. The ability to overcome this challenge will be crucial for businesses to capitalize on the opportunities that lie ahead.
