Recent global tech sector layoffs have hit Ireland’s workforce hard. Prior to these job cuts, the Irish digital sector directly employed more than 270,000 people, as well as creating many more ancillary jobs.
Tech jobs pay an average annual salary of €74,000 (£64,000) in Ireland and cover 11% of the country’s income tax revenues. While gross pay increased across all sectors in 2021 compared with pre-pandemic levels, tech salaries grew by an impressive 28%, compared with 1% for hospitality workers.
Equipped with superior spending power, these well-paid tech workers have also been better able to afford Ireland’s high rents and house prices – even during the recent housing, energy and cost of living crises. Although, these were arguably boosted by the growth of high-paying sectors such as science and technology in the first place.
These jobs often come from foreign firms. Last year broke records for foreign direct investment employment in Ireland. Multinationals employed more than 300,000 workers, with information and communication firms accounting for 116,192 of those jobs.
Much of this is activity concentrated in Europe’s “Silicon Valley”, the Dublin docklands area that hosts major offices for many of the world’s largest tech companies including Google’s parent Alphabet, Apple, Meta, Microsoft/LinkedIn, Stripe and Twitter. But with just ten firms accounting for 36% of all the tax paid in the country, Ireland’s economic vulnerability in the face of a global recession and the current tech downturn has caused some concern.
Before these job cuts, however, continued employment growth from multinational firms has left home-grown tech companies – and many other sectors – with record job vacancies. Indeed, the head of industry body Technology Ireland pointed out recently that indigenous firms have “found it challenging to hire at pace over the last two years”.
Ireland hit a record high for job vacancies right across the economy this year. This means there could be a silver lining to recent layoffs by global tech giants, particularly if locally based talent is freed up for indigenous tech firms. It could also create opportunities for employees that are currently underrepresented in the workforce such as women and older people.
The great reshuffle
Almost half (45%) of all Irish workers returning to employment post-pandemic
changed jobs, with 69% of those also changing economic sector. This labour market upheaval is quite remarkable, pointing to a post-pandemic reassessment of why, how and where people work. Indeed, instead of the “great resignation” experienced by other countries, Ireland has seen more of a “great reshuffle”.
And while some of these workers are leaving good jobs for great ones, others are leaving bad jobs for slightly better work or exiting the labour market completely. The competition for both top talent and low-skilled workers continues unabated.
This churn has also revealed a growing duality in the Irish labour market. Despite high remuneration packages for multinational and tech sector workers, recent OECD data shows that the problem of “low pay” (earnings below two-thirds of the country’s median income) is much more acute in Ireland than in many developed countries. At 18%, Ireland has the highest rate of low pay among western EU states. This problem is more acute for migrant workers (almost one-fifth of Irish workers), women, younger and older workers.
Hospitality employees are among the lowest paid in society, typically earning one-third of tech workers’ salaries. Recent analysis shows that half of all hospitality workers in Ireland changed employer post-pandemic. Two-thirds of these workers moved to other sectors such as retail and administrative or support services.
Finding decent work
All of this indicates a change in workers’ idea of “decent work” or a good job in places like Ireland. While previous definitions typically included fair wages and employment benefits such as a pension and healthcare cover, recent research suggests workers are reassessing their jobs and demanding more flexible and better-quality jobs in which workers are appreciated, fairly compensated and properly supervised.
Elon Musk’s recent ultimatum requiring all Twitter employees to return to in-office work and commit to working in a “hardcore” fashion certainly appears to have backfired. When workers reacted with the departure of key personnel and litigation threats, Musk appeared to relax his outright ban on remote working.
But, despite the obvious advantages of hybrid working for both employers and workers, there is more potential for long-term career damage, unfair treatment and unequal access to opportunities for remote workers. A recent global survey by consultancy firm Deloitte found that 58% of female hybrid workers felt excluded from access to leaders and key meetings. Also, some research suggests less than 40% of jobs can be performed remotely.
Where to from here for Ireland?
Given the record levels of job vacancies in Ireland – even with recent foreign tech company job cuts – two untapped labour sources are right under our noses:
1. Women workers: Faced with the majority of caring responsibilities, the exodus of women from the labour market during the pandemic was striking. In the first half of 2020 alone, more than 70,000 women left the Irish job market. This trend has since been partially reversed with a 59% female labour force participation rate in 2022.
But women still face barriers to decent work including unpaid caring duties, interrupted work histories and being more likely to be underemployed or stuck in precarious or low-paid employment.
2. Older workers: People in the developed world are also living longer, more active lives. As a result, governments in many OECD countries are encouraging continued participation in paid work.
But this is challenging for employers and employees. Result’s from Ireland’s first Longitudinal Study on Ageing shows workers approaching pension age tend to work fewer hours or part-time. Workplace ageism also remains a barrier to work for this section of the population – while many firms employ older workers, few recruit them.
The world is reeling from recent tech job losses and the global recession. But Ireland is well positioned to respond to these challenges if it can address its labour market inequality.
by : Maeve O’Sullivan, Assistant professor of Decent Work & Human Resource Management, University of Galway