Silicon Republic had a great article recently reporting on the explosion of jobs in the tech sector. The IDA chief appears to be postively crowing about his success. Well that’s great, but it won’t move the unemployment needle one basis point.
Why? Because The tech in Ireland sector has virtually 100% employment, take a look at the indeed.ie search for software engineers to see the indigenous requirements.
It takes 4 years to make a new graduate engineer and the current intake of computer scientists and engineers is a fraction of what it was ten years ago. This means we get the same number of technical experts chasing a vastly expanded universe of technical employers.
The last time this happened was in the previous tech boom in 2000. Then, TCD was stamping out over 150 computer scientists a year from various different disciplines (Maths, Computer Science, Engineering). Today I think the total output each year is less than 50. Other colleges has experienced similar downturns.
The net effect of this is a spiralling wage inflation for technical staff, which is good if you are an engineer, but rotten news if you are an employer and an absolute disaster if you are a start-up competing for technical expertise.
Foreign Direct Investment companies (think Google, Oracle, Intel, IBM etc. etc.) who are moving here because it is a “low cost” development centre are in for the same surprise that companies who opened up in India got. Huge velocity of staff between jobs, sign on bonuses and rapidly inflating salaries.
In the noughties we could address shortages by importing expertise from overseas but who wants to move to a country that everyone in the world thinks is an economic basket case?
What to do? First of all understand that bringing in FDI companies that pay practically no tax revenue to the Irish government are of little utility to Ireland inc. from a balance of payments perspective. Second of all they create an unbalanced market as they can continue to afford to pay inflated salaries which squeezes the price up for indigenous companies competing for staff. Those companies are generally in worse shape financially and less able to withstand the stress of these salary increases.
Secondly we need to make more techologists and make them faster. In the 80’s companies like Nixdorf ran conversion courses for the thousands of arts graduates who couldn’t find jobs in our devastated economy and the tech colleges provided a huge array of cross training. Their is a huge opportunity to retrain those that are capable of switching to a technology career (like most career choices its not for everyone).
Pity our training agency FAS is a such a busted flush, we could really do with them right now.
Copacetic 
I’m not sure it’s as difficult to convince people to move to Ireland as you say, although I’m willing to be swayed on this. Have Google reported greater difficulty attracting people since 2009? They would be a good barometer I think, as they are so heavily dependent on labour from abroad. Last I heard, their only gripe was losing senior management to Google ops elsewhere because marginal tax rates here are high when you earn a six figure sum.
LikeLike
Hi Ronan,
Not hard now, but will get harder as taxes increase and the economy gets more depressed and them the nation as a whole gets depressed.
Joe.
LikeLike
Hi Joe,
There are some fair points there but I think the killer approach would be to see the National Training Fund Levy which funds FAS from the PRSI bucket targeted more particularly at a massive effort to do the bulk technology conversion courses that seem to have tapered down a bit since the mid 90s. I still think that over the last 10 years we have singularly failed as IT / software professionals to engage with secondary students and the media to reverse the bad PR about the sector that was a residual effect of the dot bomb. I am not completely convinced about the wage inflation but I guess when its not just the likes of Google but of Corvil or Demonware or yourselves who are rapidly expanding particularly when everyone wants the top 5 or 10 of the pool. If I had to choose between a software engineer off a one year course or one who has finished a four year degree unless there was something particularly unique I would take the degree candidate. I will be bold and suggest that this is one for a coffee at the Science Gallery or a beer at the Gingerman and we can bring SOS in to judge the arguments!
Eoin
LikeLike
Hi Eoin,
Not saying one year courses will replace graduates. More a case that their is scarcity at all levels from basic IT management up to significant IP creation. IT is broad church with room for all 🙂
Joe.
LikeLike
hey Joe —
Well, from my point of view in the trenches hiring for our team in Amazon, I can tell you that we have been looking for software engineers for a long time, and still have LOTS of open positions. it’s been hard to get staff. We’ve also been putting people in career fairs to try to get interns and recent graduates — and the majority of people floating about those have been non-techies. Definitely a lack of CS grads from the Irish system.
On the other hand: we’re not really seeing people job-hopping all that much. as far as I know, all the coders we’ve hired have stuck around.
Also, re immigration, we’re hiring heavily from overseas — lots of Italians in particular, recently! However Ireland is a hard place to live for immigrants due to stupid laws like that one that dictated that gardai could stop and demand passports at any time, capricious bureaucracy when it comes time to renew visas, etc. I’m worried that this problem will become worse, and we’ll effectively wind up shooting ourselves in the foot by forcing FDI companies to leave in some stupid effort to preserve “jobs for the Irish” or similar.
LikeLike
Hi Justin,
The scarcity issue hits everyone, and Amazon like everyone else cannot fill all its slots in any reasonable timeframe. As regards job hopping, techies do this a lot less than they probably should in Ireland 🙂
The current immigration laws and how they are enforced are farcical, but don’t expect that to change anytime soon.
Joe.
LikeLike
It might be easier to fill the roles if they were more evenly distributed around the country. Dublin was great in my 20’s but I don’t want to live there now, which means my choice of jobs shrinks dramatically.
LikeLike
Hi Jamie,
Yes, but the reality is much gets more. If I start a software company I want to place in a catchment area that maximises my opportunity to recruit. In Ireland that means Dublin.
Also, to succeed my markets are all export led so I generally need to do a lot of overseas travelling to succeed, again that leads to a default of choice of Dublin/Eastern Seaboard.
IDA funded tech companies almost exclusively choose Dublin as their base. EI is more regional and tries to promote development outside Dublin and their grant structures were skewed in the past to reflect this. It hasn’t made much difference and the majority software companies in ireland are still based in Dublin.
Joe.
LikeLike
I agree with Jamie, not everyone wants to live in Dublin (or should have to). Many people want to live in rural/town Ireland as a lifestyle choice, and for good reason in my opinion. Surely by now, and especially in this industry, companies should be comfortable with employees living and working remotely – at least on a most-of-the-time basis!? After all, the majority of places are within a 3/4 hour journey of Dublin if a face-to-face meeting is really necessary …
LikeLike