Following an insightful piece from Deloitte Partner Padraig Cronin in the Irish Times (10th Nov) ‘Ireland Needs a Trade Strategy to Avoid getting Trumped’
“We do not know whether Trump will do in office all the things he said he would do during the campaign… Most critical now is for us to take a fresh look at our market position and foreign direct investment (FDI) strategy to ensure they will continue to work well for us in the changed US political landscape.
There are a number of options open to us including lowering our corporate tax rate of 12.5 per cent, seeking a more flexible application of EU fiscal rules which currently limit capital investment in infrastructure, and increasing our efforts to support the re-emerging indigenous sector.”
What has stood out most from the range of meetings and itineraries with the CEO, CFO and key decision makers of US Multinationals considering various locations for a European base is that while the tax rate plays a part in the early discussions, the reason they stay and grow here is often more focussed around what they classify as Staffing/Resourcing/Talent.
While Ireland is much vaunted for our educated workforce, we look at factors that may be prominent in the months to come for Ireland to continue our FDI growth:
Labour Laws – not often headline news but the reality is that Employment Law in Ireland is ‘closer to Boston than Berlin’ which benefits employers who like to be able to make strong and decisive people decisions if things are not working out, without legal headaches.
Regulation and Speed – it is imperative for companies considering Ireland as a location that ‘red tape’ does not become a discouraging factor. A recent piece from Gerry Cross, Director of Policy & Risk at the Central Bank of Ireland is encouraging:
“We are also asked whether the Central Bank is in a position to cope with a large influx of applications over what might be a relatively short period of time. And then to carry out the oversight activities that will be required.
The Central Bank is committed to meet these challenges. Our workforce planning for next year, which is currently being finalised, reflects the additional resources needed to deal with applications that will come our way.”
Work Ethic and Attitude – obviously we hear what we want to hear but the reality is that the culture in modern Ireland is less about clock watching and more about productivity. There is an emphasis on successful firms to build a culture that inspires employees to achieve their goals without working hours that are unsociable to family, extracurricular activities, etc. This level of empowerment offers by the best companies attracts the best people and tends to be found less in ‘lower trust’ economies.
Location & Language – regularly mentioned but worth mentioning that Dublin remains a very popular location for European Shared Services Centres based on our ability to attract various European natives. Having English at the core of the initial discussions when setting up major centres is a significant advantage.
Key Areas of Consideration
R&D Centres for Pharma and Technology – More than ever we need to shine with our ability to provide and attract the best people in Europe for these opportunities. There is likely to be a significant push in the US by their stakeholders/community to set up Global Centres back in the US and therefore our third level institutions and facilities need to be ‘top of our game’ to attract the best. Decisions on Major Investment’s on this on this scale may be made based on facts outside of a 4-year term of US Presidency.
Salaries between 2002 and 2008 rose by 50% in the professional sectors in Ireland, significantly reducing our competitiveness. While inflation has remained low since, there is continuing pressure on this front. Ask someone working on €25,000 a year who is keen to live within a reasonable commute to Dublin and they will tell you by the time they pay rents (increasing annually) and the various taxes and charges there is very little left over. It may be a housing/accommodation shortage but this is a key factor for Ireland now if we are keen to continue to attract companies hiring Graduate level roles.
Paul McClatchie, is the Director and founder of Engage People.
Engage People is a specialist Irish recruitment firm, connecting ambitious career orientated candidates and clients.
We have deep expertise across two niche strands:
- Accountancy & Financial across Commercial organisations & Professional Services
- Banking & International Financial Services.