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Manufacturing SMEs widen incentives in bid to attract key staff

Small and medium-size manufacturers in Connaught and Ulster rely on a greater mix of incentives to keep employees – including flexitime, pension schemes, and health insurance.

They also report the highest levels of staff retention in the country, while, in Dublin, money is seen as key to keeping staff.

That’s according to the latest ‘Skill Gaps & HR Challenges Facing Irish Manufacturing SMEs’ report commissioned by Bank of Ireland and recruitment firm HRM.

As the jobless rate plunged in recent years, staff recruitment and retention are becoming big issues for many businesses.

The Skills Gaps report found manufacturing SMEs in Dublin are most likely to provide monetary incentives to keep staff.

In the longer term, training and development of current employees through both apprenticeship schemes and staff engagement initiatives are key to retention, according to HRM Recruit CEO Michael O’Leary.

“Nationally, a quarter of Irish manufacturing SMEs engage in some form of apprenticeship, but upping the availability of apprenticeships in skills where SMEs are currently seeing gaps would provide a valuable stream of future talent across an increasing range of industries and sectors helping to bridge the gap,” he said.

Overall, SMEs in the manufacturing sector have cited marketing as the area where they are experiencing the most significant skills gap, with just under 40pc of SME manufacturers citing this gap as a concern, according to the report.

This is followed by a skills gap in the areas of sales and production, a concern for a third of the 250-plus companies surveyed.

Larger SMEs reported particularly high skills gaps in areas such as research and development and engineering, cited by 47pc and 50pc of manufacturing SMEs respectively as a concern.

“A combination of skills is crucial to sustained business success and the reality is that manufacturing companies will miss opportunities if the skills gaps are not filled,” Brían Evans, head of manufacturing at Bank of Ireland, said.

Overall, staff acquisition and retention are cited as the biggest current and future human-resource challenges facing manufacturing SMEs.

Despite over one in four manufacturing SMEs hiring new staff since the start of the year, 44pc of those surveyed say that maintaining and hiring a skilled workforce is a real concern for the future, according to the report.

For businesses in Munster and Leinster (excluding Dublin), the issue of employee retention is of particular concern, with more than half of businesses in the two areas of the belief that finding a skilled workforce will be problematic in the future.

“With unemployment in Ireland at the lowest level since before the financial crisis in 2008, competition for skilled workers is increasing across industries with recent research from the construction sector also highlighting major challenges,” Mr Evans said.

Looking at the various regions around Ireland, and in Leinster, more than a third of manufacturing SMEs reported a gap in research and development talent.

In Connacht and Ulster, firms reported planning and maintenance gaps, while Munster-based SMEs see quality, engineering, and finance as significant skills gaps.

The research surveyed SMEs across the top five sectors, including materials and products, print and packaging, equipment assembly, wood and timber products, and food.

A separate report from the Society of Chartered Surveyors Ireland and PwC earlier this month found more than eight in 10 surveyors in Ireland say the building sector is experiencing a skills shortage – an increase of 7 percentage points in the last six months.

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