A recently released report from the University of Limerick’s Kemmy Business School explores the current and possible future impacts of several key developments affecting the Irish labour market. The research, carried out on behalf of the Workplace Relations Commission (WRC), looks at the effects of inflation, recruitment and retention challenges, technology, and climate change on work in Ireland in the coming years.

The research consisted of two parts. The first was academic research drawing upon a wide variety of international sources from across a number of disciplines, and the second part consisted of interviews with representatives of organisations and state bodies, ranging from the Department of Enterprise, Trade & Employment, to the National Women’s Council and Fórsa. The responses from interviewees paint a clear picture of workers’ concerns.

Inflation

Of the four key factors, inflation was seen as having the greatest priority for employers and workers. This was in part due to “its immediate impacts on business costs, incomes, and related wage negotiations.”

Inflation was found to be “inextricably linked” to recruitment and retention challenges. There was little hope of a quick resolution to the problems this presents, with interviewees expecting inflation to be an ongoing issue for the medium term. 

Currently the labour market, while strong, is tight, that is expected to continue and will contribute to wage growth. This is expected to be nominal with “growth of 5.0 per cent in 2023 and 5.5 per cent in 2024.”

Although to date there has been little evidence of inflation causing significant workplace conflict, it is leading to tensions. If inflation continues workplace conflict will become a more real possibility as workers’ wage demands increase to meet continued rising cost-of-living.

Recruitment and retention

The effects of a tight labour market are not being felt evenly across all sectors. The vacancy rate in the Information and Communication sector has halved since 2016, while the rate in Public Administration and Defence has doubled in the same period.

There is evidence of skills gaps across all sectors. This issue is exacerbated by difficulties in recruiting and retaining workers from other parts of the country and abroad.

The cost-of-living crisis is an ever-present deterrent to attracting new workers. The availability and costs of housing and childcare likewise make moving for work an unattractive prospect.

As employers compete against each other over a smaller pool of potential workers, there is a worry that this may cause friction as new hires get offered better pay and conditions than pre-existing staff.

Interviewees were in agreement that greater social dialogue is needed to properly address the issues facing recruitment and employment.

Technology

Digitalisation and automation were seen as both a threat and a possible benefit for workers. There is a clear potential for technology and automation to make workers’ lives easier, make workplaces safer, and allow workers more leisure time.

Upskilling/reskilling was cited as one way to offset the potential threat to jobs. This comes with the danger of ‘skills churn’ increasing in pace. Skills churn is “the necessity for workers to constantly update skills to maintain employability.” This puts pressure on workers over who funds their learning, and whether they are expected to undertake upskilling in their own time.

AI was frequently cited as likely having the greatest consequences for work. Of particular concern was AI being used in managerial or HR contexts which are “high-risk in these contexts because they can potentially lead to discriminatory outcomes impacting workers’ careers, livelihoods, and rights.”

Climate change

Interviewees thought that with proper planning mitigation and adaptation, measures could be introduced without creating significant conflict.

There was an impression that implications of climate change for workplace relations “had not been given significant attention by actors with limited national level dialogue.” Interviewees saw the immediate ‘here and now’ issues such as inflation being prioritised over long-term planning.

Lack of proper planning was expected to be exacerbated by the wider impacts of climate change which have yet to emerge and won’t be seen for 10-20 years. There were worries that an insufficient amount of strategic planning and action had taken place, despite the size of the crisis and its potential to impact the labour market.

Overall, the report provides fascinating insights into the concerns workers in Ireland have, and the solutions they believe could address workplace relations challenges.

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