Business groups representing tens of thousands of firms across the country have hit out at the effects that the housing crisis is having on their operations, with one claiming it is constraining economic growth.
In a written opening statement given to the Oireachtas Joint Committee on Enterprise, Trade and Employment as part of its appearance today, Chambers Ireland said the greatest challenge facing small and medium enterprises (SMEs) is the lack of available talent, driven by affordable and appropriate housing being unavailable across most of the country.
"With a small number of exceptions, all our chambers have housing as the main cause of their businesses' challenges," said Ian Talbot, chief executive of the organisation.
There are regional differences occurring, he added, with buyers in some areas competing with State backed institutions, such as local authorities.
This, Mr Talbot said, is leading to situations where employers facing an enormous scarcity of talent cannot find anyone else in the area with the same skills and cannot afford to pay more to workers who need to earn more in order to be able to find a home.
"Those staff leave, they move to a different area, or they get a remote or hybrid job which pays them extra and allows them to stay close to their roots and their community," he said.
"It’s very hard to compete with that."
We need your consent to load this Oireachtas TV contentWe use Oireachtas TV to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
He said Chambers Ireland members are having to take on new unskilled people, train them up and then pay them more so they can cover their rent, at which point they start looking to buy a house and then move elsewhere because they cannot get anything suitable.
"This is having a tremendous effect on the productivity of the Irish labour market," he claimed.
"In the cities it’s an even greater challenge, the competition for talent is even higher, employees are able to find work in large multinationals across a wide variety of industries and sectors."
The situation means it is becoming ever harder for smaller and medium sized firms to compete, Mr Talbot said.
"Already, across the country large employers are buying up individual homes and houses so that they can ensure their employees have somewhere to stay," he added.
"Several times in the last year we were contacted by businesses hoping to make big investments, potentially supporting hundreds of jobs, that were considering buying out entire housing estates, if that would allow them to grow their workforce."
He added that Irish units of multinationals are often not competitive for further internal investments because they cannot meet their existing employment targets never mind expand their workforce.
"We are growing as an economy, but we are not growing at the pace we could grow. Our domestic market has been constrained by this lack of housing," he said.
"Up and down the country our members are telling us that businesses are busy, but they are leaving opportunities on the table because they do not have the capacity to take on more work."
The Irish Exporters Association (IEA), which also addressed the committee, said housing had been a pressing issue for its members for some time, but is now becoming of great concern.
Businesses are finding it hard to plan for the future because of the uncertainty, said its chief executive, Simon McKeever, in his written opening statement given to TDs and Senators.
"It is a subject being discussed at every level of the company. Inflation and the cost of living are major issues, but we believe it is the acquisition and retention of talent that has become the issue of most concern," he said.
"A lot of companies are talking about housing, or rather the lack of it, and the cost of it and the impact that this is having on their ability to attract and retain staff, particularly in the more rural areas."
He added that members are increasingly concerned about how they will deal with the wage demands that are associated with this acute shortage in the supply of housing.
Mr McKeever also explained that certain sectors are finding it very difficult to find general operative staff particularly due to constraints in securing visas for workers coming from outside of the EU.
While on the development of multiple generation family run companies, he said Irish policy is tailored towards encouraging the sale of Irish owned SMEs, because if a business owner hands down a company to children they face tax rates of up to 33%.
Mr Talbot also outlined how Chambers Ireland members are increasingly concerned about the capacity of the State, and the wider economy, to deliver on the aims of the National Development Plan and our Climate Action Plan.
They are also uncertain that the planning system will be able to perform as needed, if the country is to have €165 billion in infrastructure investment out to 2033, he said.
The Chambers boss also highlighted concerns about the economic environment within which businesses are operating, using the initial failure of the Temporary Business Energy Support Scheme as an example.
"The lesson that we should have learnt during Covid; that supports are only effective when they are accessible, and targeted at sectors that are vulnerable but viable, seems to have been forgotten," he said.
"Instead, we had a scheme that was available for everyone, but with such constraints put on it that it was useful to no one."
ISME chief executive Neil McDonnell told committee members in his opening statement that the fact that Irish industrial policy is structured around large businesses, and more specifically foreign owned large businesses is also a problem for SMEs.
"While this has been a great success in terms of GDP growth and the amount of corporation tax the State earns, it has come at the expense of a far less productive domestic sector," he said.
He claimed that the "fixation" on foreign direct investment means the country undervalues its domestic enterprise sector.
Mr McDonnell also highlighted concerns around domestic costs and competitiveness.
"The failure to control consumer costs is driving payroll expectations which many domestic employers simply cannot meet," he stated.
