Employers endure worst skills shortage in 20 years

Competition for talent is fierce yet companies shying away from remote work as a draw

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Employers are experiencing the worst skills shortage in 20 years but are also shying away from offering remote and hybrid working, according to the latest ManpowerGroup Talent Shortage Survey.

The survey, based on responses from 420 employers across Ireland, ranked IT & data skills are the hardest to find for the fourth consecutive year. This followed by operations & logistics skills, engineering skills, sustainability skills, and customer-facing skills.

Across the Information Technology sector, 66% of employers said they were struggling to find candidates with the right IT & data skills, down from a record 69% in 2024.

However, just under half of respondents (49%) of businesses in the IT sector reported plans to hire in the first quarter – more than any other industry.

However, the percentage of employers intending to offer hybrid or remote work has halved, from 38% in 2024 to 17% in 2025. Meanwhile, just 28% reported upskilling and reskilling their employees to bridge talent gaps. Employers also listed increasing job advertising budgets and offering flexibility over working hours as approaches to find skilled talent.

“Businesses are keen to hire, but there simply aren’t enough candidates with the skills employers are looking for,” said Jonny Edgar, managing director, ManpowerGroup Ireland. “Skills needs are changing at a pace we haven’t seen in recent memory, and employers are relying on expensive and time-consuming approaches like headhunting and direct sourcing to find candidates who have the right skills… The widening skills gap demands new thinking.”

Edgar continued: “The decline in hybrid work offers may be a counterproductive move while skilled talent remains in short supply, and employers going back to basics with office-based working requirements will face increased difficulty attracting candidates. While attraction measures alone will not fix the skills gap, business leaders should not abandon such a valuable tool in their arsenal while talent shortages remain at record highs and unemployment sits at record lows.”

“To reverse the widening talent shortage, more employers have to start building in upskilling and reskilling to their workforce strategies. Hiring candidates for their potential – based on past experience, aptitude, and transferable skills – and then offering training to bridge the gaps. This gives workers the development they’re looking for and crucially increases the supply of candidates with the right skills in the labour market. To stop the skills gap widening further, upskilling and reskilling is the silver bullet.”

TechCentral Reporters

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