American Chamber of Commerce Ireland Ireland: A Global ... attracting talent, retaining talent and exposing talent to challenges around the globe. Ireland: A Global Centre for Talent

American Chamber of Commerce Ireland

Ireland: A Global Centre for Talent.

www.amcham.ie

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Ireland: A Global Centre for Talent

■ Lower the tax burden on talent

■ Share the productivity gains

■ Establish a world class assignee regime

■ Continue permits reform

■ Advertise our strengths internationally

■ Make it easier to access schooling

■ Reform driving licence requirements for US citizens

■ Support negotiations on mutual recognition of qualifications (TTIP)

■ Address supply difficulties in the housing market

■ Provide a one-stop-information-shop for incoming assignees

■ Promote a culture of outward looking talent development

■ Modernise the immigration system

The American Chamber believes, in an ever changing global economy, that a

focus on talent will distinguish Ireland from the competition. Our recommendations

to Government are aimed at creating awareness of the need for a joined up

approach to bolstering our talent offering. The Chamber will pursue a number of

specific recommendations with Government. We believe that business will in turn

do its part to drive this agenda forward.

Recommendations

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Ireland needs talent. It is the driving force behind the success of American businesses in Ireland and what keeps Ireland ahead of the game. For Ireland to continue to compete we must be able to attract and retain leadership and specialist talent in a highly competitive global market for skills.

US foreign direct investment (FDI)

is hugely important for Ireland. The

American Chamber of Commerce

Ireland represents 700 US businesses

that directly employ 130,000 people,

while US firms account for 26% of

Ireland’s GDP, representing a significant

proportion of our high-tech industry.

The economic ties between Ireland

and the US have resulted in an FDI

stock of $240b in Ireland, 235,000

direct jobs in both countries, and an

unquantifiable number of business and

personal connections that deliver new

and exciting opportunities for both our

countries.

Underpinning all of this is our ability to

get the job done. Having the right talent

in Ireland is essential. We expect ever

more opportunities to arise in leadership

and specialist roles. We have a great

opportunity to attract and retain people

for those positions while developing our

local skills base. This strategy paper

will identify how we can seize that

opportunity.


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Executive Summary■ Ireland benefits hugely from the presence of American foreign

direct investment, the jobs and business opportunities it creates and

the boost to our economic growth it delivers.

■ As a unique gateway to Europe for American business, Ireland

delivers exceptional value in the global marketplace. To continue to do

that it is essential that our excellent talent pool continues to expand.

This means boosting both our domestic and international skills supply.

Simply put, Ireland thrives on talent.

■ We anticipate even more growth in specialist and leadership

roles. Ireland must remain at the forefront of delivering and attracting

skilled individuals to meet business needs. To capitalise on global

opportunities now the right strategy is to continue growing domestic

talent and attracting more talent from outside Ireland.

■ Attracting and retaining talented people in Ireland is a national

priority, as important as developing our domestic skills base. In itself,

a diverse, globalised workforce is a strong positive for Ireland.

■ As the global economy continues to evolve, successfully bidding

for global projects, regional headquarters and boosting the leadership

profile of Irish operations are all important elements in continuing the

Irish success story. This means getting the environment for attracting

talent right.

■ Ireland’s personal tax burden is a barrier to attracting and retaining

talent. The American Chamber regards reducing the tax burden

on individuals as a key priority and we welcome An Taoiseach’s

announcement at our 2014 Thanksgiving Lunch of the Government’s

intention to reduce the marginal tax rate to ‘at most 50%’ for middle

income earners.


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■ Delivering and maintaining a world class employment permit

regime, improving access to education, and providing a more

welcoming environment for globally mobile talent are also part of a

more attractive environment.

■ Moreover, it will be important to make sure that the world

knows about continuing improvements in our offering. Promoting

international knowledge of business friendly reforms is essential.

■ Just as important for Ireland as attracting talent is improving our

ability to develop talent. Increasingly businesses based in Ireland – in

both the domestic and multinational sectors – are seeking to expose

their staff to global opportunities or to holding global roles. Doing this

boosts our leadership and specialist skills potential. However even

greater opportunities are there to be seized. More business leaders

need to seek out these global opportunities and, critically, their talent

planning process should support this global outreach.

■ Ireland is currently ahead of the pack. Staying ahead will mean

constant renewal of what makes Ireland a unique destination for

foreign direct investment: our blend of skills, business competitiveness

and world leading research and innovation. Ultimately, if Ireland is

to remain ahead of the pack we must position Ireland as the global

location of choice for talent.

Stress on skills

We are engaged with a number of

education stakeholders to address

the domestic supply of skills, have

consulted on the Action Plans for Jobs

and ICT Skills Action Plans, and support

the CSR activities of our members which

are overwhelmingly focused on the

education sector.

However, there will remain a need to fill

open positions for any number of reasons

with staff from outside of Ireland. This

is a positive for our country. A diverse

globalised workforce is one that allows

for a broader range of activities in our

business sectors, introduces new ideas

and approaches to work, and delivers

a greater global reach for industry.

These openings are often for leadership

positions or specialists who boost our

members’ ability to establish teams and

grow product and service lines. Some

economists attribute a “value to ethnic

diversity in terms of an improvement

in innovation capability through

knowledge sharing…and have argued

that an immigration policy that targets

individuals possessing high or scarce

skills can have a significant, positive

impact on economic performance1”.

Beyond attracting Irish graduates and

talented individuals from abroad, our

member firms are focused on boosting

the skills and leadership capacity of

their existing employees. Employees

are any company’s greatest resource

and continually upgrading their ability to

deliver business excellence is essential

to staying ahead of the competition.

Increasingly this includes sending

staff on assignments to other global

locations broadening their experience,

their cultural awareness and honing

their leadership skills. This also allows

for vitally important knowledge, and

technical, transfers.

The American Chamber strongly supports on-going efforts to boost the supply of well qualified Irish graduates in key sectors, alongside delivering greater employability skills to them.


81. Forfás (2005) ‘Skills Needs in the Irish Economy – The Role of Migration’

Ireland’s recent gains in competitiveness

have reinforced its position as the

location of choice for US FDI into Europe.

The American Chamber’s core mission

is to ensure that this continues. To do

so we believe that a more concerted

approach is required to ensuring Ireland

supports higher levels of talent mobility.

This will apply both across Government

and within businesses. This strategy

document explores the importance of

attracting talent, retaining talent and

exposing talent to challenges around the

globe.


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Shifting patterns of skills needsExpertise is being sought out from anywhere it can be located around

the globe, and in 2013 almost one third of all professional vacancies

in Ireland were in the broad information, communications and

technologies sectors. In addition, leadership positions in roles such as

biopharma production, senior ICT managers and financial managers

are proving difficult to fill2. Significantly where managers are being

hired in from outside the European Economic Area, close to 50% are

brought in on intra-firm transfers (IFTs), confirming the importance to

organisations of utilising their existing global talent pool. Furthermore,

Ireland has seen a shift in the profile of those receiving permits as

a concentration has emerged on ICT qualified staff. Permits were

spread relatively evenly across business sectors in 2010 but by 2013

ICT accounted for 52% of all permits issued3.

According to the Expert Group on Future Skills Needs4, employment

could increase by between 85,000 and 100,000 by 2020 in

high-growth areas such as big data and ICT, alongside continued

expansion in manufacturing. Replacement demand in these sectors is

also important to those job numbers, and underlines the importance

of ensuring that existing staff are able to up-skill and acquire the

experience necessary to make the next step up in their careers.


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Future skills needs

2. Forfás (2014) ‘Vacancy Overview 2013’

3. Ibid

4. See EGFSN Reports ‘Addressing Future Demand for High-Level ICT Skills’, ‘Assessing the Demand for Big Data and Analytics Skills, 2013 – 2020’, and ‘Future Skills Requirements of the Manufacturing Sector to 2020’

5. OECD, Migration Policy Debates, May 2014

The profile of Ireland’s FDI sector is

constantly evolving. Uniquely within

Europe we attract the full diversity of US

multinationals operating at the cutting

edge of industry. This has put Ireland in

an enviable position, but the opportunity

is countered by threats. Our rankings

as first in the world for the availability

of skilled labour, and for attitudes to

globalisation, signal a country that is

very much open and able for business.

However, any serious slippage in that

performance would cast us in a negative

light. Government has made a number

of commitments to broadening and

deepening our skills base, but the

demand for skills does not stand still

nor does it progress in a single direction.

Predicting future skills needs is difficult as

businesses evolve ever more speedily. It

is clear however that a strong cohort of

well-educated graduates in the STEM

(Science, Technology, Engineering and

Mathematics) subjects provide a solid

base for a range of high-tech industries,

supplemented of course by graduates

from a diversity of other backgrounds.

Persistent vacancies in ICT and other

specialist positions underline that need.

The Irish higher education sector is making

progress toward delivering the numbers of

graduates to fill roles that are often being

recruited from outside of Ireland. The

aspiration of the ICT Skills Action Plan

to deliver enough graduates to fill three

quarters of all openings in the sector by

2018 is welcome and a positive signal of

intent that Ireland will produce talent in the

areas of current industry need. But great

job opportunities will remain to be filled.

Filling those jobs will mean attracting staff

from outside of Ireland.

The American Chamber is clear that

attracting the talent to fill those openings

must be made easier. Attracting skilled

workers to Ireland will have many

benefits. Skilled migrants ‘supplement

the stock of human capital of the host

country. More specifically, evidence from

the United States suggests that skilled

immigrants contribute to boosting

research and innovation, as well as

technological progress.5’

According to IMD World Competitiveness Center reports (World Talent Report 2014, World Competitiveness Yearbook 2014) Ireland ranks as: 6th in the world for the availability of talent 1st for flexibility and adaptability of workforce 1st for attitudes to globalisation

1st for investment incentives


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Developing leadership talent in our

existing base is also vitally important.

Many US firms initially set up in

Ireland with a team of executives from

headquarters with the purpose of

launching the operation. However, the

transition to Irish management is often

swift as leadership talent emerges or

is sought out. This momentum must

be maintained. In order to do so it

is necessary for organisations to be

able to develop their future leaders

through internal programmes, exposing

candidates to new cultures and varying

organisational practices around the

globe.

Reputation is increasingly important in

global business and happily Ireland is

a watchword for excellence, openness

and productivity. However, no country

can stay ahead of the competition if

it becomes complacent. To continue

Ireland’s economic recovery we must

ensure that our skills base, attitude

and adaptability remain key strengths.

As one of the most open economies

in the world, Ireland is particularly well

positioned to benefit from shifting

market trends, with a responsive and

flexible workforce to ensure that we are

attractive for new business. This position

can only be maintained if we continue to

develop and welcome talented people.

There is now an opportunity to

address the demand for specialist and

leadership talent necessary to fulfil

industry needs and set the platform for

further expansion. Because we expect

US FDI in Ireland to continue to grow

significantly we recommend that our

strategy today should address the jump

in job opportunities tomorrow. This is the

context in which we need to be even

more attractive for talent to relocate to

Ireland.

6. According to the National Skills Bulletin 2014 from Forfás, in 2013 vacancies for managers were most common in retail, financial services and the IT sector. A high level of experience was a key requirement for many posts advertised. In addition, over one third of professional vacancies in 2013 were in the IT sector, followed by science and engineering, health, and business and financial services. Forfás note that a ‘significant share of vacancies is arising due to expansion demand for ICT skills. Moreover, many of the advertised vacancies are proving difficult to fill.’ According to the Vacancy Overview 2013 (May 2014) from the Expert Group on Future Skills Needs, vacancies were most frequent in 2013 for corporate managers and directors, science and engineering professionals (including ICT professionals), and business professionals.

Developing leaders, strengthening our reputation

“We need to develop and retain talent in Ireland and also attract talent from abroad

to fill the skills gaps that can emerge from time to time. What is key is that we

continue to develop our innovation led economy”

Louise Phelan, American Chamber President, VP Global Operations EMEA PayPal.


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When multinationals located in Ireland bid for new business

they are competing with subsidiaries across numerous

locations, all of whom are aiming for more high value work.

Winning those mandates is highly prized and often requires

attracting new leadership to get a bid across the line.

Having an attractive tax regime for assignees to provide that

leadership can be a key factor for bids. In this respect Ireland

must be competitive.

We must ensure that investment opportunities for Ireland

are not missed due to the reluctance of senior leaders to

relocate here. In addition, we believe that our member

organisations could be in an even stronger position bidding

for new, high-value investment if Ireland were more attractive

to the senior leaders required to lead those projects. These

projects propose in turn to create many further jobs as they

are delivered.

The recent Department of Jobs, Enterprise and Innovation

(DJEI) ‘Policy Statement on FDI in Ireland’ is a welcome

declaration of intent on delivering greater value from Ireland’s

most significant business sectors. Particularly encouraging

is the focus on making Ireland more attractive to young

start-ups, on nurturing talent as a key differentiator, and on

attracting mobile entrepreneurs. The policy statement’s focus

on research is also crucial and something that the Chamber

will address in a paper in 2015.

Attracting the best

“Attracting talent to Ireland, particularly leadership talent,

must be a priority for industry and Government. Our

members can play their part through continued excellence

in their operations, by up-skilling their employees, in seeking

out new opportunities to match their ambitions as centres

of excellence – however policymakers must also address

the climate in which businesses are seeking to add to their

existing strengths.”

Tom Mangan, Vice President Operations, Boston Scientific


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7. American Chamber of Commerce Ireland and Taxback ‘Global Mobility Survey 2014’

8. Accenture (2013) ‘Closing the Skills Gap in Ireland’

Personal taxThe American Chamber welcomes

the Government’s commitment to

lower personal taxation rates – a key

recommendation of the Chamber in

recent years, and one that will send a

signal that Ireland seeks to reward talent

and ambition, not penalise it. Ireland’s

high marginal tax rate has been a

dissuasive factor for attracting talent, as

potential employees may be sought from

countries where their tax burden is lower

– often significantly so. Moreover, recent

years have seen the addition of the

universal social charge and increased

contributions to PRSI. We recently

asked our members their views on the

issues and difficulties facing companies

when their employees cross borders7.

62% of respondents cited taxation levels

as an issue that would put off potential

assignees from coming to Ireland. In that

same survey 92% of respondents stated

that they have not attempted to bring in

leadership staff under SARP.

The Chamber believes that not alone

should there be reductions in the

tax burden on work, but in addition

measures should be taken to ensure

that productivity gains – for which Irish

operations are globally renowned –

should be recognised and rewarded.

The Irish tax system should become

known for rewarding effort and talent

and we believe there is scope to examine

benefit-in-kind provisions that support

this objective.

AssigneesReforms to the SARP regime announced

in Budget 2015 are welcome as is the

ambition to have a best-in-class offering

making a tangible contribution to

economic growth. The Chamber believe

that the reformed relief announced

in Budget 2015, while a welcome

improvement, should be further

enhanced to apply to income tax, PRSI

and USC and be increased to 35% of

qualifying income. We believe the relief

should be driven by the talent and

expertise needs of industry, resulting

in a tangible contribution to economic

growth, and should aim to be best in

class or at the very least internationally

competitive. This would be driven by the

need to remain competitive for the skills

needs of industry.

Developing our skills baseOur high tech corporate base requires

constant talent renewal meaning that we

can never rest on our laurels, particularly

while new competitor nations play catch

up, existing competitors strengthen, and

innovation continues apace. Driving our

ability to compete is our talent pool and

skill to exploit new technologies.

Renewing from withinOrganisations benefit from increased

talent, not alone in terms of productivity,

but also from creating opportunities to

renew their skills base from within. This

has been called the ‘talent flow’ – “the

movement of people and skills within

an organisation in ways that help the

company fulfil its strategic ambition”8.

Promotion from within can address

skills gaps as they appear while opening

new possibilities for staff in the future.

Managing a process of internal promotion

and retention, with the attraction of skills

from outside Ireland and the promotion

of opportunities abroad for current

employees, is a successful mix for many

leading organisations. We need to see

an expansion of this across industry.

On assignmentThere are three interlocking issues at

stake here: boosting our domestic

The imperative for Ireland


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talent supply, attracting outside talent

and retaining that talent. To ensure we

can match these objectives Ireland

needs to be both more attractive as a

location for outside talent and more

supportive of sending staff abroad. This

is not alone an issue for Government

to address. The results of the Global

Mobility Survey 2014 suggest that there

is an opportunity to improve business

readiness to ensure that assignees

leaving Ireland on time-bound projects

maximise the opportunity. Business

groups and Government have a role to

encourage high-growth firms to put in

place an assignment policy to ensure

preparedness to send staff overseas.

Through this firms will be in a position to

maximise the benefit of this investment

in talent development.

The competition withinAmong many other factors, Ireland’s

competitiveness relies on being

competitive internationally in its tax

rates and for producing, and attracting,

talented workers. A further element is the

competition between the subsidiaries

of global companies – this competition

is often just as important to Ireland as

the competition with other countries.

Ireland has a reputation as a location

for centres of excellence, for world class

manufacturing and internationally traded

services. This is a hard won reputation

and one that we must regularly

strengthen. To do so we need to ensure

that the talented workforce necessary to

enhance that reputation is available. We

must also be able to offer an attractive

destination.

An attractive place to liveThe cost of living is a key factor in

the attractiveness of a location to live

and work. As personal taxation is an

important aspect of this assessment,

a tax reform agenda to lower the tax

burden on talent will help to improve our

competitiveness. In addition, we must

not lose sight of the fact that family and

lifestyle priorities play a role in whether

staff decide to relocate or not.

■ Information portals welcoming new

arrivals, explaining the benefits of

working and living in Ireland and

the practicalities surrounding the

relocation and integration process.

■ Currently, many arrivals into Ireland

perceive the school system as

difficult to access, and this can lead

to the most expensive option being

taken as the best shortcut available

in order to minimise complexity.

■ The supply of affordable and

accessible accommodation, is at a

crucial juncture in Ireland and this

could affect our ability to attract

talent from abroad.

■ An affordable health insurance

offering will be essential to ensure

that this very important benefit is

retained as a key measure to attract

and retain talent in companies.

■ Arrivals from the US have to acquire

an Irish driving licence after a year of

residence – adding inconvenience

and expense to their time here when

the ability to exchange licences

would be more efficient. Driving

licence exchange agreements with

individual US states should be

explored to address this.


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Reforming permitsThe ease of moving is a key factor for talent

considering relocation opportunities.

Ireland has made a number of positive

changes to its employment permits

regime in the past year including quicker

turn-around times and the trusted partner

scheme – changes that we believe have

the potential to ensure we are a more

attractive location for mobile talent.

However it is not enough simply to speed

up and streamline processes – they must

be well recognised internationally and

they must be internationally competitive.

We must also ensure that our immigration

processes are fit for purpose and do not

add unnecessary delays to the arrival

process or visa renewal.

Knowledge transferOur members have been at the forefront of

knowledge transfer between operations

in Ireland and Corporate HQ in the US.

This has often involved the transfer in of

senior staff from the US to Ireland but is

increasingly coming to mean the transfer

of staff out of Ireland as well. These

transfers may be for short periods of

time or longer term assignments – what

is significant is that they demonstrate the

competitive strength of Irish operations

as centres of excellence. This kind of

knowledge and technical transfer will be

increasingly important in the future for

Ireland as a demonstration of our ability

to deliver.

“Tech transfer and knowledge transfer

work best when done face-to-face.

Intel’s flexible, people centred approach

has been a key strength in making it

possible to consistently transfer leading

edge manufacturing technology over

several generations, as well as build

our research competence.”

Eamonn Sinnott, General Manager,

Intel Ireland


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The role of the American ChamberThe Chamber will pursue a number of actions driven by the

strategic aim of attracting and retaining talent. We will promote

our priorities with Government to alter the tax system, to ensure

a world class permits regime and to pursue other public policy

changes that will aid Ireland’s attractiveness. In addition, the

Chamber will collaborate with partners to promote greater

transfer of employees into the global marketplace from Ireland.

In order to assist the attraction of talent into Ireland we will

create an online one-stop-shop for essential information on

moving to Ireland. We will roll out initiatives in 2015 aimed at

developing leadership and attracting home Irish emigrants

to avail of opportunities at home as well as highlighting the

importance of innovation in the economy. The Chamber will

continue to promote the global success story that is the Irish-

US trade and investment relationship and the profile of US firms

based in Ireland as global centres of excellence.

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Between now and the end of the decade

Ireland has the potential to create tens of

thousands of jobs, to capitalise on our

existing strengths and add new ones, to

maintain our position as a world leading

location for world class businesses and

to develop our reputation for excellence.

To do all of this we must have the right

skills and leadership in place.

We need to ensure that our permits

system remains user friendly, that

positive changes in this regard are well

communicated to business and that

this positivity continues. Developing

a world class assignee programme is

also essential. The Chamber has made

our views known on how that should

change. The next stage of development

for the FDI sector in Ireland is based on

leadership potential. For that to happen

we need to be able to develop and

attract leaders. Clearly we have more to

do and if we are to remain competitive

we will have to seize the opportunity.

The American Chamber has engaged

with a number of stakeholders in recent

years to highlight the importance of

boosting our domestic skills supply –

particularly in the STEM subjects. Doing

this will help to deliver more promising

graduates for recruitment. What is

increasingly important is the need for

companies to develop their existing

talent pool. To that end more needs

to be done to ensure that companies

maximise the experience for their staff.

This means well developed assignment

and relocation policies. Tax planning is

important in this regard; as staff move

around the world their tax bills become

more complicated. Companies can save

on such complications by planning their

assignments in advance. Importantly,

everything must be done to encourage

a global mind-set shift around talent.

This would be aided by the completion

of a Transatlantic Trade and Investment

Partnership (TTIP) which includes

agreement on the mutual recognition

of qualifications. Delivering certainty in

this area would further aid the mobility

of talented staff.

Where do we go from here?

American Chamber of Commerce Ireland6 Wilton PlaceDublin 2 Ireland

Tel +353 1 6616201 Fax +353 1 6616217 Web amcham.ieTwitter @AmericanChamber

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Documents

American Chamber of Commerce Ireland Ireland: A Global ... attracting talent, retaining talent and exposing talent to challenges around the globe. Ireland: A Global Centre for Talent