DUBLIN/LONDON (Reuters) - Ireland’s allure as a post-Brexit base for global financial firms has driven wages for some roles considerably higher with some positions offering 15 percent more than a year ago.
Risk and compliance staff are particularly sought after, five of Dublin’s leading recruitment consultants told Reuters. Expertise in data science and newer technologies such as payment platforms is also in demand.
And upwards pressure on wages could continue, with the central bank expected to approve more firms’ expansion plans in the coming months.
While the higher pay is good news for workers, it can bring concerns for others. International financial firms only account for 2 percent of Irish jobs but have contributed to a sharp fall in the overall jobless rate. The central bank said last week the economy could overheat if capacity constraints emerge in the labor market.
“Financial services is one of the areas seeing a definite spike in recruitment,” said Gerard Murnaghan, vice president at job search site Indeed. Its first-quarter postings were up 15 percent year-on-year.
Although Ireland is widely considered the most vulnerable among EU members to any change in trade after Brexit, the financial services firms want to keep close access to clients after Britain leaves the European Union in 2019.
Barclays, Legal & General Investment Management and Standard Life Aberdeen are among companies to pick Ireland as a post-Brexit base against stiff competition from rival centers including Luxembourg, Frankfurt and Paris.
Robert MacGiolla Phadraig, Sigmar Recruitment’s chief commercial officer, said headhunted personnel were securing increases of between 10 percent and 15 percent, with front-office staff able to command the highest salary jumps.
Two thirds of employers surveyed by Sigmar and accounting firm EY earlier this year said they expected to give staff a pay rise in order to stop poaching by rivals, a practice already accounting for one in four hires.
“We have reached a tipping point.. this is a talent crisis.”
Around a fifth of vacancies are being filled from abroad and more employers were also offering flexible working to help seal the deal.
Andrew Crawford, head of Experis Ireland, said applicants were coming from as far afield as Australia and the United States, after many had left following the 2008 financial crisis.
Ireland’s economy has grown faster than any other in the European Union for the last four years and is forecast to expand by 5.6 percent in 2018 against 2.1 percent for the region.
The central bank last week said that fast growth could lead to “full capacity” in the economy with a risk it overheats and creates a boom-and-bust cycle.
But Brexit also brings with it some uncertainty for Ireland.
The central bank estimates that if neighboring Britain leaves the EU without a formal divorce agreement in March, it would shave 3.2 percent off economic growth over 10 years, and result in the creation of around 40,000 fewer jobs.
An economy is considered at its limit when unemployment is so low that rising wages push up prices. Ireland’s jobless rate has dropped sharply in recent months to 5.1 percent, in part due to hiring at fund managers, insurers and foreign-owned banks.
Irish business lobby IBEC said it has also seen steep pay rises for specialist positions in other areas such as Ireland’s large pharmaceutical and medical device sectors and for IT roles in retail. That was due to faster growth, rather than Brexit, however.
For those hiring, the wage rises can also bring problems. MacGiolla Phadraig said he was worried about the knock-on effect of defensive pay hikes on the competitiveness of the economy, which relies on foreign firms for almost one in ten jobs.
“The indicators are honestly quite worrying,” he said.
Estelle Davis, managing partner at Brightwater Executive, said she had seen a near-20 percent rise in financial services job vacancies, with almost a quarter of senior roles placed in the second half of 2017 directly attributed to Brexit.
The buoyant economy and attractive market outlook was also encouraging ex-pat Irish workers to move back home, she said, particularly for more experienced hires, “someone who has 8 years plus senior management experience under their belt”.
Returnees commanding higher wages nevertheless have to dig a little deeper to find a place to live as property prices, both commercial and residential heat up.
While average house prices are still 20 percent below their property bubble peak, they rose 11 percent in Dublin in the year to end-May. Residential rents have already passed the previous peak.
That, said Mark O’Donnell, a partner working in financial services in the Dublin office of Odgers, was the “biggest impediment” for some financial services firms.
“Rents have sky-rocketed and this has already put off potential new entrants.”
Additional reporting by Carolyn Cohn; editing by Anna Willard
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