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Costs, staff turnover biggest business concerns

More than three-quarters of senior executives in Irish firms say that inflation is the issue that has had the biggest impact on their business over the past 12 months.

The finding comes in a business-sentiment survey published today (17 August) by business-law firm Mason Hayes & Curran (MHC) and the Irish Management Institute (IMI).

85% of businesses expect increased costs to have the greatest impact on operations in the year ahead.

Asked what their biggest challenge this year would be, 40% of managers also cited inflation, but staff turnover followed closely behind, at 29%.

Increased interest in M&A

The proposed OECD 15% tax rate of corporate profits is seen as unlikely to be an issue for investment, with only 25% of respondents citing it as a concern.

The survey signalled an increased interest in mergers and acquisitions (M&A), with almost 40% of those involved in this area predicting that it would be important for their business in the coming year – up from 23% in the previous survey.

Attitudes to remote working were largely positive, with nine out of ten businesses saying that remote working has had a positive impact on society. Three-quarters believe it has also been good for their business.

Around 20% of firms have also reduced their office space in the past 12 months.

“The natural conclusion is that this new work structure is here for the foreseeable future, and that offices will not be returning to pre-pandemic capacity,” the survey compilers comment.

Bigger investment in people

With the shift towards a hybrid working model, more than 70% of companies have increased their investment in digital channels in the past 12 months, with 70% expecting this to increase again in the coming year.

In the part of the survey dealing with managing people, more than 80% of those surveyed saw recruiting suitable staff as their biggest challenge, followed by retaining existing staff (66%).

As a result, just over three in five businesses have increased their level of investment in people development over the last two years.

Almost a quarter of the firms surveyed said that they had completed a sustainability audit, while 60% said that they were required by stakeholders to have a sustainability plan in place.

‘Stark shift’

The research was completed in June among management executives and clients of MHC and IMI, across a range of industry sectors.

Martin Kelleher (corporate partner at MHC) said that, while the findings on inflation were not surprising, the attitudes to remote working indicated that the Government’s stated intention to ensure that remote working was “a permanent feature in the Irish workforce” was having success.

Sinead Farrelly (HR director of the IMI) described the research as showing “a stark shift in the fundamental principles of work that we identified with in the past”.