Ireland set for net jobs growth of over 230,000 by 2022

19 July 2018 Consultancy.uk

After a decade of economic turbulence resulting from the global recession, Ireland’s employment rate has finally pushed past the figure of 2008. While the improvement points toward a fast growing economy, however, a tightening labour market in line with those of the rest of the developed world could see this trajectory stifled.

Professional services giant EY has authored a report anticipating a net jobs growth of 236,700 across the whole of Ireland between 2017 and 2022. The Economic Eye Summer Forecast 2018 shows that after 10 years of slow recovery from the 2008 financial crisis, Ireland’s employment has finally surpassed its levels of a decade ago. Further to this, the Republic of Ireland specifically can expect GDP growth of 4.9% in 2018 and 3.8% in 2019. This is more than three times the rate that those in Northern Ireland is forecast to see, at 1.1% in 2018 and 1.2% in 2019, likely resulting from the North’s remaining ties to Brexit-stricken Britain.

However, according to EY, some of the Republic’s impressive growth has also been buoyed by opportunities offered by Brexit. Recently, EY’s Brexit Tracker revealed that since the day of the infamous referendum result, 21 financial services firms have confirmed that they will move some or all of their UK operations to Dublin, surprisingly making Dublin the most popular post-Brexit location, exceeding the number of institutions headed for Frankfurt (12), Luxembourg (11) and Paris (8).

Employment forecast- ROI and NI (2000 - 2027)

Brexit planning has also helped many firms build an overarching approach to ensure an ability to trade in both the UK and EU post-Brexit, which has led to a few new partnerships and a slight uptick in M&A activity, EY found. However, while this activity, along with Dublin’s top-table position as a preferred Brexit destination could be seen as a cause for celebration, the Big Four firm’s study also warned that this state of play is a long way from being a return to the Celtic Tiger era, particularly as – despite the benefits of planning – the majority of firms have left their future in a cloud of uncertainty.

5% of firms in the Republic have Brexit plans in place, while an even sparser 3% are similarly prepared in Northern Ireland. The researchers believe that this is partly a reflection of the dominance of small firms – which may not rely on cross-border trade – in the total business population on the island, although even less than one fifth of the larger businesses they analysed had a dedicated strategy in place. Even more strikingly, considering once Brexit becomes a reality, in whatever shape it takes, these firms will need to develop a plan, and yet the vast majority of businesses are not engaging with advisory experts in order to prepare for this. Instead, a staggering 85% rely on television and 80% on newspapers to deliver intelligence on the Brexit process, compared to the 15% willing to look to business support organisations and agencies.

Firms with Brexit plans in place + Where firms source information on the potential impact of Brexit

Without a plan for post-EU life, Northern Irish firms in particular will likely not have a backup mechanism in place for tightened restrictions on the flow of talent from the continent; while businesses in the Republic could also see the creation of a hard border suddenly restrict access to talent from the UK. Amid a growing shortage of labour in the developing world, this could notably set Irish growth back.

Michael Hall, Head of Markets, EY Ireland, said, “Although growth remains sluggish in Northern Ireland, the overall corporate mood is much more positive than might have been expected, just one year out from Brexit and with little sign of clarity of the final terms of the UK’s exit from the EU. This reflects the ‘here and now’ of doing business, and the need to make ‘no-regrets’ decisions, regardless of the uncertainty that Brexit, or fears over global trade wars, bring.”

EY Chief Economist Neil Gibson was quick to warn against becoming overly delirious about the potential growth of Ireland in this context, however. He said, “Ireland’s impressive growth may be somewhat overstated by headline GDP figures, but data on job creation levels and tax receipts all point to a fast-growing economy. The forecast is for headline growth rates to fall back from current levels and job creation will also moderate as a tighter labour market begins to impact.”

Top 10 Challenges identified by Business Leaders + Unemployment rates (Q1 2000 - Q1 2018)

Bringing in and keeping the best labour is top of the corporate agenda for the majority of firms across the whole of Ireland.  64% of executives polled by EY in the region noted a concern at bringing in the next generation of leaders, while a further 60% were worried about a failure to attract and retain talent more generally. Along with an ageing population, which is making it harder to replace staff reaching retirement age, having the ‘right’ people is vital as it can help companies navigate almost any challenge in a rapidly changing business environment.

“In a modern, knowledge-driven economy, talent is key to growth,” Neil Gibson stated. He added, “Refreshing talent strategies is essential for businesses looking to compete effectively. This is more than simply looking at recruitment practices; the talent journey starts before businesses even know they need to hire, and continues long after staff leave.”

Related: British CEO positivity falls, but 2018 outlook bright for Ireland.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”