Increase in Recruitment continues at record pace according to Bank of Ireland Business Banking

- Recruiting staff is now one of the biggest problems facing Irish SMEs

- Regional recruitment highest in Cork

Overall recruitment is up 12% in comparison to August 2004, according to the latest Bank of Ireland Business Banking Job Index. The findings of the Job Index, which were released today (Sunday, 11 September 2005), show that 17,875 recruitment advertisements were placed in the national daily and Sunday newspapers in August. Recruitment in August, which is typically a holiday month, is at its highest compared to the same months in 2003 and 2004, indcating a buoyant labour market.

Financial recruitment was up (+169%), consistent with trends for the sector over the last three months and which may be due to recent expansion across the financial services sector. Educational recruitment was also up (+41%), due to seasonal demand with schools requiring staff for the September start. Recruitment in the retail sector was up 9% from August 2004 and up 21% from last month but still struggling to match first quarter figures.

Construction figures also show a slight increase (+1%) over the same month in 2004 and, although August is typically a builders' holiday month, recruitment numbers are up (+45%) from July 2005. The leisure sector (+15%), public sector and IT/technology sector (both +13%) also boosted the overall trend.

Despite this demand for labour across most sectors, there was some downside. Manufacturing was down -37% compared to August last year, reinforcing concerns over the future sustainability of the sector. Healthcare recruitment was also down (-5%) when compared to August 2004.

The findings of the Bank of Ireland's Job Index indicate a demand for labour with employers unable to fill vacancies. This is backed up by the latest CSO figures which indicate that the economy is currently running at full employment.

On a regional basis, the Job Index now captures recruitment in the key urban centres of Limerick, Galway, Cork and Waterford. There is a strong trend across each of the cities on the key sectors driving recruitment. In Limerick, Waterford, and Cork demand for labour is highest in the professional sector, with the leisure sector driving recruitment in Galway. The leisure sector is also the second highest recruiter in Limerick, Waterford, and Cork. In total 9,498 advertisements were placed in the regional newspapers covering the four cities with the highest proportion of this recruitment in Cork (65%).

Commenting on the findings of the Job Index, Cathal Muckian, Director, Bank of Ireland Business Banking said: "Recruiting staff is now one of the biggest problems facing Irish SMEs and this issue is one that is regularly raised by our business customers at meetings with our business managers around the country. People management skills are becoming increasingly crucial for business owners in retaining key people. Business owners need to think about developing a HR strategy and understand the importance of recognition and work environment to staff, in addition to the more traditional emphasis on establishing a good remuneration package and pension plan. There is also a real need for Irish SMEs to focus on productivity initiatives by using technology efficiently wherever possible to fill staffing shortfalls".

"The outlook remains positive for the remainder of 2005 and as part of our commitment to understanding local market conditions, the regional job indexes in Cork, Galway, Limerick and Waterford will assist our business banking managers in advising clients on their business banking requirements. Whilst the findings are broadly in line with the national figures, it is a means of capturing local trends and an excellent indicator of business confidence in particular regions", Cathal Muckian added.

Dr. Dan McLaughlin, Chief Economist, Bank of Ireland said: "The Job Index implies that the demand for labour in Ireland is still growing at a pace which is keeping the economy at or below the full employment level. Consequently the challenge for Irish firms is to attract and retain workers, which inevitably puts upward pressure on wages. Calls for wage restraint are understandable but the realities of the market place are such that wage inflation is unlikely to slow substantially in the absence of a deceleration in the pace of economic growth."

Ends

For reference:

Dermot Nolan
Head of Business Marketing
Tel: 086 2429167

Note to Editors:

About Bank of Ireland Business Banking

Bank of Ireland is the number one Bank for business in Ireland with dedicated business managers available through each of its 270 strong nationwide branch network. Bank of Ireland Business Banking now provides over 100 business loans per day to all types of businesses ranging from start-ups to high-growth firms.

The Bank of Ireland business offer encompasses the full range of day-to-day business banking services as well as specialist Treasury, Commercial Finance, Credit card, Life Assurance planning services and Venture Capital. Over 60,000 customers have registered for its "Business On Line" service.