Dr. Kara McGann:

I thank the joint committee for the opportunity to address it on this important issue for the business sector. IBEC is pleased to have contributed to the review of economic migration policy carried out by the interdepartmental group last year, which served to inform many elements of the Bill. We are familiar, therefore, with the detailed work that has gone into the development of the general scheme. We also welcome the commitment of the Department of Business, Enterprise and Innovation, notably the team in the economic migration policy unit, to engage with business.

This timely Bill seeks to build on the existing employment permits system, which has provided a strong framework to supplement skills and labour needs in the State, and ensure it will be future-proofed, agile and responsive to the dynamic Irish labour market. It will give priority, quite correctly in our view, to the ability of the system to adapt to rapid changes in the needs of the labour market of the future, something that will support the competitiveness of business in Ireland. Its success, however, will ultimately be judged by how it delivers. This complex area will require collaboration from all stakeholders, including business, if we are to respond to the changing needs of the economy and citizens.

We will be unable to comment in detail on a 117-page general scheme document in a short input and, therefore, I will highlight where the most significant opportunities and challenges exist from a business perspective. A constant challenge in this area of labour market policy is the ability to remain responsive to the changing needs of organisations and industries, and the swift administration process of various permit types. Backlogs and delays in the permit process generate uncertainty in the business community and can in some cases result in jobs or significant projects falling through, while failure to respond to growing challenges in meeting skills or labour needs has implications for the ability of business to meet existing demands or grow.

In the current economic expansion, the combined effects of EU migration and domestic labour market activation are not sufficient to meet Ireland’s rapidly growing demand for labour. The level of difficulty in filling vacancies has increased in the past 12 months, with almost three quarters of those vacancies deemed "hard to fill”, primarily due to an insufficient number of candidates with skills in the Irish labour market. The vacancies spanned both high and low-skilled roles. Industry remains committed to enhancing our indigenous skills supply to meet labour market needs through a combination of upskilling and reskilling programmes. We know, however, that given the fast-paced, changing global business model, education and training cannot meet all demands in real time. Developments in infrastructure, increased capacity, innovation and changing skills needs take time.

The general scheme has identified several areas where flexibility and responsiveness can be built into the system. They include retaining sensible rules such as the 50:50 rule, except where the individual in receipt of the permit would be the only employee; reforming the operational features of the labour market needs test to align it with the appropriate vacancy advertising practices used by employers today; and introducing a seasonal employment permit, which will help alleviate labour market demands during peak production or delivery times in specific sector. The provision of streamlined renewal processes for the permit’s users will encourage it to be used appropriately and prevent seasonal workers from overstaying their permit permissions, thus ensuring it will be retained for its agreed usage. Other areas include simplifying the administration of intra-company transfers and contract-of-services employees in line with trade agreements, which will also enhance the efficiency and effectiveness of these important processes for business; streamlining the permission of spouses, partners and dependents of critical skills employment permit holders or researchers on hosting agreements through the provision by the Minister for Justice and Equality of a visa for them to reside and work, thus supporting the aim of retaining these important skills in the State; and working on the processing system to ensure an automated system is available to reduce the administration burden on applicants, given that system that allows for auto-population and ease of completion will increase efficiencies on all sides and support the speed and accuracy of administration and reduce the backlog in this process.

Unfortunately, the general scheme does not directly tackle the issue of the low and unskilled workers who are needed to support the maintenance and growth of industry in certain sectors, such as food processing, hospitality, agriculture, social care and health care. The absence of this category of workers is not addressed by the reduced pool of resident workers and these sectors fail to be in a position to compete with higher-paying sectors like construction due to low margins. However, failing to resolve this crisis is likely to endanger existing business and limit the ability of organisations to take on new business opportunities internationally. Yet, in the context of Brexit that is crucial. In the longer term this will impact on the ability to meet Department targets set for certain sectors, e.g. Food Wise 2025. Shortages among lower-skilled workers and subsequent pressure on wages have the potential to be as harmful to the Irish economy as a shortage of skilled labour. This is particularly true for indigenous businesses predominantly based in sectors that use a higher proportion of low-skilled labour, such as tourism, care, retail, manufacturing and agrifood. These sectors then often set the cost floor and thus competitiveness in the economy as a whole. Many of these workers in the care or food processing sectors remain on the ineligible list, thus stunting the ability of businesses to meet existing needs, let alone grow. Some employers have found this is impacting workforce development as well as they struggle to staff a shift let alone release people for learning and development. Given our commitments to lifelong learning as a way to remain competitive, this is a concerning trend.

IBEC believes that a model such as the lower skilled occupations visa used in Canada or the essential skills work visa in New Zealand could offer opportunities and parameters that could suit Ireland's need for lower-skilled general operatives beyond what the general employment permit offers. Eligibility requirements include the equivalent of a high school diploma or two years of job-specific training and enable a worker to remain in the country from six to 24 months and, as such, fill immediate labour shortages where gaps exist. In addition, such visas define the duration, wages and conditions for the stay of the worker in the country. One of the challenges to the provision of low-skilled workers that arose during discussions contributing to the review of economic migration policy related to how greater access to low-skilled immigrant workers may stifle innovation and automation of certain roles. However, many of the sectors in question are sectors where future automation is not possible or where a transition to automation away from labour will be slow and costly, such as tourism, hospitality, social care and health care. These jobs require unpredictable, non-routine work involving personal interaction and emotional rather than artificial intelligence and are not easily replaced by automation. As such, the repeated reference to conditionality around knowledge transfer and process innovation to be prescribed in regulations is a worrying one that many employers may struggle to fulfil.

Immigration will remain an important source of labour for Ireland in future, one that can allow a quick response to emerging skills shortages and provide an ongoing supply of skilled workers where the number of new entrants or experienced workers is too low. The continued economic recovery means that shortages will be observed in greater number and in more occupations and sectors. In an increasingly uncertain global environment, policy must continue to innovate and challenge boundaries. New ways to attract migrants must be undertaken to meet the labour market needs that extend beyond our capacity. Competition will increase and failure to meet the skills and labour market demands will do untold long-term damage to elements of our economy.

The general scheme of the Bill is welcome. It aims to provide a more responsive and agile employment permit system for Ireland. In doing so it will support the Irish economy and its ambitions for growth while future-proofing the system for the expected ebbs and flows of the labour market. I thank the members of the joint committee for the opportunity to present the views of Ibec on this important Bill.