Finally, a solution to the economic crisis!

Is it me or are people much happier and more positive this week in comparison to last week?

While out for a stroll at lunchtime today I couldn’t help but notice that most of the people I passed were either smiling or at the very least presenting a far more cheery disposition than that of the previous week. There was also more of an air of positivity around - people’s strides were more purposeful… more of a spring in their step.

And this glow wasn’t just confined to people in the street, shop assistants also appeared to be more friendly and helpful. Even the lady who prepared my sandwich greeted me differently – “How are you today sir? What can I get you?”  instead of the usual snap “What can I get ya?!?”

So what has changed from last week? Let me see…..

Has our national debt been wiped out? Have we miraculously found another 400,000 jobs returning us back to full employment? Nope.  It’s simply the case of the sun coming out!

This got me thinking....what power this natural force has over the Irish people’s psyche. If some nice weather can make such a positive difference in peoples attitudes, why haven’t we been taking advantage of this when its comes to Government strategy? It’s worth a shot!!! Wouldn’t we stand a far greater chance of negotiating a better Croke Park deal if we held emergency meetings this week rather than on a dark, dreary wet week in November? ( I am sure some of those people I passed at lunchtime were members of our union movement!).

Imagine what could be achieved if we brought the Troika and representatives of the ECB over here this week? They say there is no better place than Ireland when the sun is out. Let them get a feel for the real Irish 'cead mile failte' in overdrive. I’d say we would cut a far better deal.

But let’s not stop there. Imagine if the Island of Ireland was located on the west coast of America? We probably would have never have gotten into this bloody economic mess in the first place!

Am I placing too much trust on the affect of the sun on Ireland OR could this be the way forward?


Eamonn Wren
Finance Director
Ireland

HAYS Recruiting experts worldwide
Dublin

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It's always darkest before the dawn

In recent weeks contrasts within the Irish economy have continued to emerge. At a glance you could surmise that we continue to be amongst the basket-cases of Europe. Gloomy growth forecasts from trusted sources such as the ESRI predict the economy will grow by 0.9% next year, a downgrade from a previous prediction of 2.3%.

The unemployment rate refuses to abate. In fact the media is getting so tired of the figures they are becoming more creative. Recent reports claimed the number of women out of work for more than a year has soared by a fifth. Official figures show overall unemployment remains at 14.2% in February. We have seen record numbers attend emigration jobs fares such as the Working Abroad Expo across Ireland. Moody’s predict Ireland will face tough challenges regaining market access in 2013 - which might well lead to yet another trip to the Troika. The European crisis roars on and although early media indications suggest a yes vote, the implications of a failure to ratify the upcoming referendum on the Fiscal Treaty suggests a rather worrying few years for our economic prosperity.

With all of this in mind, I think of a line from Florence and the Machines’ song “Shake it out” - It's always darkest before the dawn. We’re bombarded with the depressing news headlines listed above but I get a sense of contradiction when you consider the following recent headline stories. Abbott invests €85 million to expand Irish plant, Allergan invests €350 million, Sanofi unveils €150 million to expand Irish plant, Merck opens €100 million R&D Centre, Pfizer to spend €200 million and so on and so on. Now, consider that this is just in one sector which confirms Ireland as the world's biggest net exporter of pharmaceuticals. We can also look at other stand out sectors in terms of current output and future expectations. The funds industry for example – now employing over 11,000 people in the administration of €1.8 trillion of assets. PepsiCo, Lilly, Microsoft and Paypal are all more amazing stories of 2012, which is just over two months old!

And the best news is that it’s not just the capital reaping the benefits - Sligo, Cork, Westport, Waterford, Carlow and Dundalk are the locations welcoming this major investment, which will also lead to knock-on jobs throughout their local communities. In my neck of the woods, Galway and Limerick are seeing the fruits of a strong multinational market, coupled with inward investment and commitment by large organisations to the region. Galway is now firmly established as the medical devices capital of Ireland, with companies like Medtronics and Boston Scientific acting as the pillar to many other organisations in the same sector. They take full advantage of the availability of skilled labour in a range of technical areas including R&D, design and manufacturing. Limerick and the mid-west is probably best served from the financial services sector which includes of course, the funds industry. Northern Trust continues to expand in the region and GE has an ever-growing presence as well as a substantial aircraft leasing industry in the Shannon Free Zone.

There are many challenges ahead, of that there is no doubt. But we cannot control the European issue and it’s too late to ‘un-guarantee’ the banks. While these and related issues are not going to go away anytime soon we should focus our attention on the positives and the potential it brings - the aggressive investments, the government focus on entrepreneurialism and the solid industry infrastructure that is now emerging across the country. If we all keep our focus on that, the dawn must surely be very close by.

Bobby O'Connor
Business Director
HAYS Recruiting experts worldwide

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Jobs Initiative: Costing more than the job’s worth

After well over 100 days in office, the Government needs to get stuck into fixing policies that are impeding job creation instead of creating new ones, writes Paul O'Donnell for Business & Finance.

Paul O’Donnell is business director with Hays Ireland

There is no greater issue facing the country than the jobs crisis. The Government is clearly aware of this but the content of the Jobs Initiative highlighted some ambiguity over its  role is in handling the problem. The question of governments directly creating employment has historically been an ideological position, with the right arguing they should have nothing to do with it and left advocating a more hands-on approach.

Given the depth of Ireland’s jobs crisis, we do not have the luxury of adopting ideological standpoints but instead need to be entirely pragmatic.

Government-created jobs or “make-work” schemes tend to be unsustainable and only serve to paper over the problem that is the alarming Live Register figures, while work created through private enterprise is sustainable and generally leads to more job creation. The Government could significantly help by creating a set of conditions that give private enterprises –  both new and existing – the best chance of surviving and generating profit and growth. This is what will put a dent in the 440,000 Live Register figure, not proposals put forward by the Jobs Initiative.

The proposed €30 million investment into a schools project illustrates this point. Building schools only makes sense within the context of an overall educational infrastructure development strategy. It should never be used as an initiative to help create work for unemployed builders. If that’s the case, the money would be better spent elsewhere. We would all agree that the construction industry needs all the help it can get, but a more productive proposal would be to tidy up the policy and legislation which concern this decimated sector.
An example is the procurement process for public construction jobs – just like the proposed schools projects. Departments currently operate on a ‘lowest bid wins’ policy. This has created a situation where building contractors are in such fierce competition to win the work they are submitting tenders at 30% below the cost of delivery. This invariably leaves the contractor, all their sub-contractors and their suppliers in an extremely precarious position. And as recent evidence has shown, the financial burden of under-cutting becomes too much and the contractor goes out of business. So everyone in the supply chain loses their job and their income.

This problem has been well publicised by the CIF and other bodies, since the start of the recession. So why does the issue still exist? Cordil Construction went bust as recently as May 2011 while in the process of delivering more than €20 million worth of State projects – most of them schools. Is it wise to release a further €30 million worth of school projects for the purpose of increasing employment if the procurement issue remains unresolved? Construction companies that get these “created” jobs will just continue to go out of business and take many others from the business with them.

Another interesting part of the Jobs Initiative is to ensure that jobseekers have access to relevant training programmes to produce the requisite skills to fill the current jobs on offer. The Government’s pledge is to create more than 20,000 internship placements. The goal of keeping people’s skills fresh is very valid and internships are a useful way of achieving this. The problem is that FÁS will be charged with delivering this. ESRI research has recently noted that jobseekers going through the National Employment Action Plan are 17% less likely to secure onward employment than those who complete their job-hunting on their own. So it seems that using the FÁS service actually harms your chances of securing employment.

We have had internship programmes for some time now. Much was made of the last one that commenced in 2009. This was also managed by FÁS and appears not to have achieved much – the Live Register still looks much the same. There is nothing wrong with internships – they make sense, especially in this economic context, but until FÁS is completely overhauled there is no point in creating another internship programme.
However, it seems that meaningful transformation continues to evade FÁS. A gruelling change programme is certainly what is needed. Minister Burton has vowed to complete it but we haven’t seen any details or timeframes. Announcing training and internship initiatives is fine but is it not a case of putting the cart before the horse?

After well over 100 days in office, the Government needs to get stuck into fixing policies that are impeding job creation instead of creating new ones. Is it a case that pouring over processes and legislation doesn’t grab the positive headlines the way a ‘Jobs Initiative’ does? But this is why we have a government, is it not? Research by Vision Net in May shows that a drop of 42% in first-time business directors from the same month last year. An interpretation could be that the morale of entrepreneurs seems to be breaking. There is a growing frustration that the wheels of change and reform move too slowly in Ireland. A worrying thought – as it is innovative entrepreneurs that are going to lift us out of the economic crisis, not government make-work schemes.

Instead of trying to create jobs, the Government should have a series of projects aimed at fixing the broken systems and processes in the country. Engaging and consulting with affected businesses and representative bodies is crucial. Once the strategy is formulated then communicate the details to the public. Our own research in Hays highlighted that almost two in three Irish professionals don’t know what the Jobs Initiative is. This would suggest a growing cynicism towards initiatives that seem to focus on sound-bites.
The electorate is sophisticated and well-informed and the appetite is there for a really detailed plan, so give them the minutiae.

Knowing that the people charged with running our country have a real handle on the details would provide comfort and encouragement no end.