The IMI / NIB Survey of Multinational Corporations (MNCs) in Ireland for 2011, launched on November 8th, shows that almost half (48%) of multinationals in Ireland are expecting to grow employment numbers in the next 12 months, while only 13% of firms surveyed expect to decrease employment numbers. This is a significant improvement on last year’s survey, when approximately the same number of firms planned to cut their work force as planned to expand.
The survey also shows that the strategic importance of Irish operations to their parent companies is very high in 62% of the companies surveyed. More strategically important operations tend to provide better quality, more highly-paid employment. One fifth of companies characterised their Irish operation as the ‘strategic centre of the global company, while a further 42% of respondents described their Irish operations as being the strategic centre for a region or a particular product or service. The strategic importance of Irish subsidiaries was also reflected in the high number (60%) of firms who managed international staff from their Irish base.
A majority of subsidiaries surveyed said that the greatest competitive threat they faced was from other subsidiaries within their own company, not from other companies.
The survey showed that 61% of firms surveyed had won new mandates from within their global parent company over the past twelve months.
The 2011 survey also highlights some remaining competitiveness problems, notably in terms of labour costs. Seventy percent of respondents said that Irish labour costs were more expensive than comparable locations, while only 13% said Irish labour costs were below comparable locations. While this represents an improvement on the 81% of respondents in 2009 who thought that Irish labour costs were too high, cost competitiveness remains a worry for multinationals.
The UK was identified in the survey as the primary source of competition, and many firms are having difficulty competing with the UK following the devaluation of sterling since the onset of the financial crisis.
This is the fourth year in which the Irish Management Institute & National Irish Bank have partnered to survey the attitudes and experiences of Chief Executives and senior managers of multinational companies (MNCs) operating in Ireland. This research gathers information on the main factors that underpin Ireland as a location for MNCs, gauges the short term prospects for these companies in Ireland and highlights the main issues that are impacting on Ireland’s competitiveness.