| Regionalisation: maintaining Ireland's competitiveness as a financial centre |
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| Dublin's skills shortage has proved to be a major thorn in the side for international financial services in Ireland. Companies based in Dublin have seen growing salary costs and human resource problems with increasing levels of attrition in staff. Lower costs has seen a number of firms set up offices in centres around the country. The National Spatial Strategy has identified new areas for potential growth within Ireland with population of young skilled workers available to financial services companies. |
International financial services companies are under increasing pressure to find solutions to a skills shortage for in Dublin. Brian Cowen's and Peter Robinson's initiative to give the green light for FS companies to employ undergraduates in Northern Ireland - without the risk of losing their regulatory status - an initiative involves the relaxation of the 'minimum activities' ruling - highlights the pressing need for a solution.
Outsourcing operations outside of Ireland North & South has become a looming threat for the industry with proposals for a fund management passport top of the funds agenda over recent months. The risk comes from lower cost centres in regions such as Eastern European financial centres. Global reinsurance firm Hannover Re decided against headquartering its European operations in Ireland, for the very reason of the on-going skills shortage in the financial services sector. Expert Group on Future Skills Needs (EGFSN) - The Future Skills and Research Needs of the International Financial Services Industry (December 2007) Companies are reporting serious problems with staff turnover which have been highlighted at corporate levels, i.e US.
The regionalisation of Irish financial services plays an important role in the breaking of the low skill equilibrium by infusing higher skills into the regions spurring regional innovation and entrepreneurship. The brain drain to Dublin and abroad is likely to persist without a significant deepening and widening of regional labour markets. The financial services companies who are opening offices in the regions assisted by the IDA and Invest Northern Ireland and local authorities like Carlow County council and Shannon Development are playing an integral part by deepening the skills in the industry nationally and are allowing the higher value chain jobs to be based in Ireland without losing other back office jobs.
The benefits of regionalisation to the employer are obvious with lower office rents and salaries as highlighted in the tables found in this article. For the worker regionalisation offers the option of staying 'home.'
An increasing number of financial services companies have opened up regional offices. A widely dispersed group of firms are accessing the local skills of regional centres like Cork and recently Limerick with the recent opening of Northern Trust's office there. There is the issue of capacity in each of these centres and the limits of how many staff can be based there. The aim is to balance throughout all the regions.
National policy outlined in the National Spatial Strategy (NSS) aims to achieve a better balance of social, economic and physical development across Ireland, in order to drive development in the regions; it proposes that areas of sufficient scale and critical mass will be created through a network of gateways and hubs. The NSS designated four new national level gateways - the towns of Dundalk and Sligo and the linked gateways of Letterkenny/(Derry) and the Midland towns of Athlone/Tullamore/Mullingar. In addition, the NSS identified nine medium-sized 'hubs' that will support, and be supported by, the gateways and will link/ out to wider rural areas. The hubs identified are Cavan, Ennis, Kilkenny, Mallow, Monaghan, Tuam and Wexford, along with the linked hubs of Ballina/Castlebar and Tralee/Killarney, working together to promote regional development in their areas.
Two areas that are promoting themseves as regions that are still short of fulfilling their capacity and are open to investment from financial services companies are Shannon and Carlow.
The Shannon Free Zone is a 243 hectare International Business Park adjacent to Shannon International Airport on the West Coast of Ireland. Shannon Development provides financial assistance, through a grant scheme, to companies wishing to locate or expand their operations. These include: employment grants, research and development grants, capital grants and training grants. Shannon is profiled in more detail by Halifax in their regional centre profile on page 20.
In Carlow, the County Council, upon attracting interest from a number of foreign companies in the area, but securing no investment in the area, set up the 'Click for Carlow' campaign. The rationale behind the campaign was to respond to some firms' concerns over the supply of skilled labour in the area. Since the project was established, almost 2,000 people registered their skills, 80 per cent of whom have third level qualifications.
Over the last number of years, national bodies have invested substantial interest and capital in key strategic infrastructural developments in Carlow. The IDA invested some €12 million in a state of the art 70 acre business and technology park which has been completed to a very high standard. Under the auspices of the National Development Plan (NDP), the region's road network is currently undergoing significant improvement with a €1 billion investment in the N9/N10 upgrade. Scheduled for completion by mid-2008, the 18 km Carlow By-pass, stage one of the project, at a cost of €212 million, will bring much of the traffic out of Carlow town-centre. |
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