The Role of Migration in the Irish Workforce

Ireland’s economic model is built on attracting multinational investment and high-skilled workers. Yet it faces mounting pressure from housing shortages, rising living costs, and an increasingly competitive global market for talent. As Paul Sweetman, Chief Executive of the American Chamber of Commerce Ireland, puts it: “Ireland’s talent is our greatest strength — but immigration delays risk losing it” [1].

Recent data reveals both the scale of Ireland’s success in attracting migrants and the emerging cracks in its competitive position. In 2024, Ireland recorded 149,200 immigrants, a 17-year high, with net inward migration of 79,300 persons [2]. Yet this achievement masks a troubling counter-trend. Namely that emigration has surged by 37% since 2020, with particularly stark increases amongst young Irish nationals and women [3]. This simultaneous rise in both immigration and emigration during a period of strong economic growth represents an unusual pattern that demands attention from policymakers and business leaders alike.

Ireland’s talent advantage

Ireland’s transformation from a country of emigration to one of immigration reflects decades of strategic positioning. One-fifth of Ireland’s workforce today is international, and this blend of homegrown and international expertise has become central to the country’s value proposition for foreign direct investment [4]. According to a recent AmCham member survey, 90% of US multinationals with a presence in Ireland hold a positive view of the country as an investment location, with 63% identifying access to Ireland’s highly educated and skilled talent pool as the country’s strongest competitive advantage [5].

The numbers underscore Ireland’s distinctive position within Europe. Graduate immigration to Ireland has been an engine of economic growth, with over 60% of working-age immigrants holding graduate qualifications, roughly double the EU average [6]. As economist John FitzGerald observes, “More than 40 per cent of those working in our IT sector are immigrants, where average pay is almost €90,000” [7]. This concentration of highly skilled workers has enabled Ireland to punch above its weight in sectors from pharmaceuticals to financial services.

The financial services sector exemplifies this dependence on international talent. Almost 30% of health service workers have come from abroad, whilst 40% of IT sector employees are immigrants [8]. These figures represent not simply labour market statistics but the operational reality of Ireland’s economic model. Without sustained inward migration of skilled workers, many multinational operations in Ireland would struggle to maintain their current scale.

Talent shortage

Ireland’s headline success in attracting global talent masks the deeper structural vulnerability of a widening skills gap that is increasingly constraining employers across multiple sectors. While one-fifth of the workforce is now international, 64% of AmCham members report experiencing a skills shortage, signalling that Ireland’s talent pipeline is struggling to keep pace with the economy’s needs. [9]

The shortages emerging in financial services, technology, healthcare and construction are not the result of an absolute lack of workers, but of a mismatch between the speed at which industries are evolving and the capacity of the domestic labour market to respond. As Róisín Fitzpatrick of Deloitte notes, Ireland’s economy “needs to get the right talent into the right roles,” a challenge that has become acute as unemployment has fallen to pre-pandemic lows and demand for specialised workers has surged. [10]

Healthcare provides one of the clearest examples. When acute shortages of care staff became impossible to fill domestically, the government expanded the employment permits system in 2021 to allow international recruitment of healthcare assistants. Permit approvals in this category surged from 121 in 2020 to 1,345 in 2022, enabling nursing homes and care facilities to stabilise operations that had been under severe strain [11].

The corporate sector has also become more reliant on alternative talent pathways, such as hiring spouses and partners of Critical Skills Employment Permit holders, or employing international protection applicants after six months in the system. These mechanisms allow firms to access a broader pool of potential workers and partially offset shortages where traditional recruitment is falling short

Yet these adaptive measures highlight a more fundamental problem: Ireland’s long-term competitiveness increasingly depends on sustained inward migration, not only to fill gaps but to enable strategic growth. As Fitzpatrick emphasises, if employers cannot access the skills they need, they will simply move roles elsewhere [12]. This is already evident in sectors where delays or shortages have directly impeded expansion plans or pushed investment to competing jurisdictions with smoother access to international talent.

In this context, the talent shortage is best understood not as a temporary imbalance but as a structural feature of Ireland’s economic model. High-value industries from pharmaceuticals to digital services depend on specialised labour that the domestic system cannot produce at sufficient scale or speed. Migration has been the safety valve that keeps these sectors functioning. Maintaining that flow of skills is central to Ireland’s ability to remain a leading destination for multinational business and to deliver the growth that underpins its wider economic strategy.

Immigration system

Ireland’s immigration infrastructure, designed during an era of more modest inflows, struggles to keep pace with demand. Current processing times for overseas employees average four to eight weeks across multiple government departments. This is a stark disadvantage compared with the UK’s five to seven day average [13]. These delays have real commercial consequences, with employers reporting project cancellations and businesses choosing alternative jurisdictions for investment.

The employment permits system has expanded dramatically to meet demand. From 2020 to 2024, employment permits more than doubled, reaching nearly 40,000 persons in 2024 [14]. India now dominates permit allocations, accounting for over a third of all permits issued, followed by Brazil and the Philippines [15]. The health sector has been the major beneficiary, representing 32.5% of all permits, followed by ICT at 18.4% [16].

Yet this expansion raises questions about system sustainability. December 2023 saw the largest ever expansion to the employment permits system, adding 11 roles to the Critical Skills Occupation List and 32 roles to the General Employment Permits list [17]. Whilst these changes demonstrate responsiveness to market needs, they also highlight the persistent gap between domestic labour supply and employer demand across an ever-widening range of occupations.

Emigration

Perhaps most concerning for Irish policymakers is the surge in emigration despite strong economic growth. Female emigration increased by 56% from 2020 to 2024, compared with just 12% for males [18]. Since 2022, female emigration amongst the 15-24 age cohort has been nearly double that of males (39,100 versus 26,300) [19]. Irish nationals aged 25-44 have shown a 17.5% annual increase in emigration since 2021 [20].

The Growing Up in Ireland survey provides insight into these choices. One in eight respondents had emigrated, with employment opportunities (43.4%) the most common reason, followed by education and training (21.2%) [21]. Critically, over one-third said they had difficulties making ends meet, and 97.7% were concerned with the housing situation in Ireland [22]. Almost half planned to return to Ireland, but one-fifth stated they did not intend to return, with 30% undecided [23].

This represents a worrying erosion of Ireland’s competitive position. As Paschal Donohoe, Minister for Finance, notes: “Continued skilled inward migration will be vital to maintain growth in the labour force. Our openness will continue to be a great source of strength and a competitive advantage. We need to manage this well” [24].

European context

Ireland’s migration challenges must be understood within a broader European context. On a per capita basis, Ireland ranks seventh highest for net inward migration amongst EU27 countries since 2020 [25]. Irish inward migration flows are approximately twice the European average, a pattern that has persisted over the past decade [26]. Similarly, outward flows from Ireland are roughly twice the European average, with Ireland ranked fourth in per capita outward flows [27].

This high degree of labour market mobility reflects both Ireland’s economic openness and its attractiveness to international workers. Yet it also exposes vulnerabilities. Countries such as Denmark, Sweden, France, Spain and the Netherlands increasingly compete for the same global talent pool [28]. Many offer comparable or superior earnings for graduates, with Ireland holding only the 14th highest graduate earnings in real terms across EU countries [29].

The expansion of the EU labour market following enlargement provides opportunities but no guarantee of meeting Ireland’s needs. Analysis suggests that whilst demand for unskilled labour can likely be met from within the expanded EU, high-skilled migration requirements are unlikely to be filled entirely from EEA sources [30]. Just 6 million EU graduates actually work in countries where average wages are significantly lower than Irish wages — 16.8% of the total graduate workforce [31].

What to do

Addressing these challenges requires both immediate reforms and longer-term strategic thinking. In the short term, the introduction of a “one stop shop” for immigration services represents a crucial step towards improving processing efficiency [32]. Creating a unified permit combining the Irish residence permit card, employment permit and entry visa would greatly enhance the user experience and reduce administrative burden.

More fundamentally, Ireland must consider whether its temporary work permit system adequately serves the country’s needs. The Expert Group on Future Skills Needs has proposed a dual system: a Green Card programme leading to permanent residency for high-skilled migrants, alongside a reformed work permit system for temporary migration [33]. Such an approach would better align Ireland with international competitors who offer clear pathways to permanency for desired talent.

The integration of international students into the labour market presents another underutilised opportunity. Over 40,000 international students were enrolled in Irish academic institutions in 2023/2024 [34]. Yet the current system requires non-EEA students to leave the country before applying for work visas, an inefficient process that represents “a significant disadvantage to the Irish enterprise sector” [35]. Schemes similar to Scotland’s Fresh Talent programme, which allows non-EEA students with honours degrees to remain for two years after graduation whilst seeking employment, merit serious consideration.

Housing

Underlying many of Ireland’s migration challenges is the accommodation crisis. Róisín Fitzpatrick of Deloitte notes that family decisions on whether to relocate to a new country often hinge on dependent partners’ access to the labour market [36]. But housing availability increasingly trumps labour market access in location decisions.

The Growing Up in Ireland survey data confirms that housing concerns significantly influence emigration decisions, particularly amongst younger cohorts [37]. This creates a vicious cycle where inadequate housing discourages both international talent from arriving and Irish talent from remaining, which in turn constrains economic growth and the resources available to address housing shortages.

As ESRI research indicates, if all migrants resident in Ireland were employed at levels matching their educational qualifications, it would add between 3.5% and 3.7% to GNP [38]. This “occupational gap” reflects not only qualification recognition issues but also the constraints imposed by inadequate housing and infrastructure on migrants’ ability to fully contribute to the economy.

Crossroads

Ireland’s economic model increasingly depends on its ability to attract and retain global talent. The post-pandemic surge in immigration — 149,200 persons in 2024 — demonstrates the country’s continued appeal. The employment permits system has proven flexible and responsive, with Dublin hosting 55% of all new permits and the health sector successfully accessing international labour markets [39].

Yet sustainability questions persist. The Department of Finance forecasts annual net migration of 35,000 persons from 2025 to 2030, with scenarios ranging from 25,000 to 45,000 depending on housing supply and other factors [40]. Under even the higher scenario, meeting the Programme for Government target of 300,000 additional jobs by 2030 will require maximising labour force participation alongside sustained immigration.

The simultaneous rise in immigration and emigration, particularly amongst young Irish nationals, suggests Ireland stands at a crossroads. Without addressing housing costs, improving immigration processing efficiency, and creating clearer pathways to permanency for desired talent, the country risks losing its competitive advantage in the global war for skills.

Sources

About the author

Shay Dalton

Partner

Shay has placed over 200 successful C-level candidates and is one of the best known and respected executive recruiters in the market.