Thursday 17 August 2017

Adrian Weckler: Beware the small print in jobs announcements

Bill Gates Picture: Kelvin Ma/Bloomberg
Bill Gates Picture: Kelvin Ma/Bloomberg
Adrian Weckler

Adrian Weckler

How much do we trust jobs announcements in Ireland? On Friday, Microsoft announced 600 new Irish jobs. But based on past form, that may not mean it's increasing its staffing levels here by 600.

Tech companies (and many other companies) often shuffle things around a bit when making a new jobs announcement. The result isn't always a net gain for Ireland.

In Microsoft's case, for example, there have been new jobs announcements almost every year in Ireland of late. In 2013, it said it would add 95 new jobs. In 2015, it unveiled 100 new jobs. And last year, it talked about 140 new jobs.

But each time, its staffing level in Ireland stayed the same - at around 1,200 people.

Now it is announcing 600 new jobs. Will it simply be hiring 600 people, while another 600 somehow exit the Irish staff count?

The company says that no, it will be hitting a higher staffing level of 1,800 soon. This is partly because 500 of the new 600 positions announced are earmarked for a separate sales facility specialising in multi-lingual support.

As for the fixed 1,200 staffing level that rarely seems to change, Microsoft says that quite a lot of its Irish staff - up to 15pc annually - migrate to other roles in other Microsoft offices around the world. So even if it hires 100 new people, the same number again might graduate over to the company's US office.

This means, of course, that the company founded by Bill Gates may have to announce a further tranche of jobs toward the end of the year, or in early 2018, to make up for the batch that have moved on to other offices.

And because State bodies such as the IDA have a committed role - either financially or organisationally - in such jobs announcements they are worthy of scrutiny.

In particular, if there is no net gain to the numbers employed in Ireland by an IDA-supported company, it might raise legitimate questions over IDA policy in relation to jobs announcements.

To be fair, it's not hard to see why a company like Microsoft is highly regarded by the IDA and Irish policymakers in general. It has been in Ireland for a long time, riding out recessions and huge sectoral shifts in the IT industry. Public visits from chief executive Satya Nadella don't hurt Ireland's image abroad, either. And it employs around 700 contractors over and above its stated 1,200 staffers.

As such, Microsoft is as close as you can get to a model for Irish industrial policy insofar as it aspires to have influential multinational players operating here.

So if it wants to make a splash every now and again over some new jobs, there's probably a lot of State goodwill in the tank, even if the overall headcount doesn't move much.

Even still, there is a sense that jobs announcements in Ireland may no longer have the impact they once had.

In fairness, there are some positive reasons for this. For example, the unemployment rate is far lower in Ireland than it was four or five years ago. And Ireland's workforce is arguably much more agile now than it was a decade ago: we are no longer quite as dependent on 'any job at all' being created in a city or town.

Even Government ministers, who still publicly equate shop assistant or call centre jobs with engineering ones in terms of industrial success, have toned down the drama when it comes to job losses and job announcements. (This is good sign insofar as it indicates we may gradually be becoming more self-confident when it comes to industry than in previous years.)

But there are also some other reasons why stories of new jobs are becoming less impactful. This is partly because of some standard features, such as seemingly elongated hiring timescales, which many jobs announcements now contain.

As a rule, companies now say that their hiring will be staggered over 12, 24, or even 36 months. This always sounds a little confusing. In the tech industry, in particular, saying you intend to take on people in three years' time smacks of aspiration over solid planning.

To be fair, hiring over a period of months (or even years) is sometimes unavoidable. It's simply not possible to get 50 or 100 new people in a week or a month. This is especially so in the context of in-demand skills. Many tech companies in Ireland spend close to a year getting just a few key individuals in place.

Nevertheless, it is now routine for companies to make splashy jobs pledges based on "the next two years". And it's not always locked down. Small firms, in particular, have taken notice of this tactic as a way of getting a quick promotional boost - even when such aspirations are based on a wing and a prayer.

None of this is to say that companies like Microsoft won't continue to hire people here or remain important players.

And so long as there is trust in the organisations making the announcements, new jobs will always be welcome. Indeed, the IDA has a pretty decent track record to fall back on when questions like this are posed of it. But it's never a bad thing to cast an inquisitive eye when companies organise set piece events to announce new jobs for Irish facilities. Sometimes there's more in the context than in the headline figures.

Sunday Indo Business

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