Businesses planning to expand their workforce over the next 12 months face a battle for talent.

New research from HSBC shows the competition for talent means companies are having to diversify how they are attracting and retaining staff.

It found that succeeding in the battle for talent will be crucial to driving long-term profitability. It also found that employees are looking for more from employers than pay and benefits.

Alan Duffy, CEO of HSBC Ireland said a narrowing of the gap between the financial compensation package and a flexible working environment has emerged post-pandemic.

"Most companies at this juncture have chosen their optimal level landing point between a full return to the office, where most people are office based, and a fully remote working environment," Mr Duffy said. "In HSBC, we've chosen a hybrid working model because that is what our staff are asking for.

"It's a personal choice for companies but we are seeing that potential employees are making their career choices based on the type of working environment that they will have as they progress their careers."

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The research on the future of work found that companies expect their workforces to increase by an average of 13% in the next 12 months, while just 12% of businesses plan reductions to their workforce.

More than three quarters of businesses see a 'strong' relationship between investment in workforce and profitability, as they target almost 19% revenue growth on average over the next 12 months.

"We are also seeing the 2,000 business leaders we surveyed across 10 global markets are investing significantly in their workforces. They're upskilling. Digitisation skills are at a premium post-pandemic.

"I really think what the research is showing is that the traditional model of just competing on salary and variable pay is no longer sufficient," he said.

There is lots of movement in the Irish jobs market at the moment, however there hasn't been a mass exodus of employees from companies, or what has been called The Great Resignation.

Mr Duffy said all of the evidence that HSBC has seen worldwide is that the pandemic, accentuated by the economic crisis, has been a pivot point for many people and they're reassessing their careers, and have chosen different career paths.

"Increasingly, we are seeing employees interrogate employers ESG credentials, sustainability credentials, they want to work for a company that has a more holistic approach to the environment.

"Essentially, they are looking to future proof; will these companies be around in 10, 15 years time as climate change bites. That's increasingly evidenced from our survey."