Remove barriers to cross-border working and unleash ‘Tomorrow’s Talent’
Businesses in Northern Ireland and the Republic of Ireland are losing out on the next generation of skilled and ambitious talent as regulatory and other factors hold back cross-border recruitment. That’s according to new labour market analysis from the CBI, Ibec, and recruitment specialists Hays.
With a highly skilled workforce among the all-island economy’s greatest assets, the All-Island Workforce Report: Tomorrow’s Talent found that firms’ attempts to hire cross-border talent are held back by the cost of transport, tax complexities, payroll and visa issues – despite most firms saying that the skills they need to fill vacancies exist across the border.
The report also found that almost half of employees surveyed would consider working across the border, drawn by better career opportunities and higher pay. But tax and social security implications, housing costs, poor transport links, and commuting costs put them off.
The survey of over 1,200 employers and employees, including almost 450 in Northern Ireland, found:
(1) Employees have a strong appetite for cross-border work.
· Nearly half (46%) of workers would consider a cross-border role for their next career move, drawn primarily by higher pay and better opportunities. However, the cost of commuting is the single biggest deterrent for 55% of survey respondents, followed by poor transport links and tax complexities arising from living in one jurisdiction and working in another.
(2) The all-island labour market can solve skills shortages.
· Half of employers are finding recruitment increasingly difficult, and the all-island labour market offers a clear solution. Over 69% of employers believe the specific skills needed to fill their vacancies already exist in the neighbouring jurisdiction.
(3) A shifting labour market and early signs of it cooling down in 2027.
· The all-island labour market has added 550,000 jobs since 2019, but one-quarter (26%) of employers anticipate a tightening labour market over the next 12 months.
(4) While the all-island economy is viewed as a single labour market by many CEOs and directors, workers in less senior roles are less likely to perceive the labour market as being ‘all-island.”
· Almost half (47%) of CEOs and over 40% of directors perceive the labour market to be ‘all-island’. Overall, 38% of all survey respondents say they view the island as a single labour market. There is a clear need to shift perceptions and encourage greater recognition and utilisation of the opportunities presented by the all-island labour market.
(5) Tax and bureaucracy are significant barriers to cross-border employment.
· Administrative hurdles remain a significant barrier to cross-border hiring and working. Only 30% of respondents feel they clearly understand dual-tax requirements. A lack of clarity, dual payroll obligations, and top-up tax bills continue to impact cross-border mobility.
(6) Business and employee priorities for labour mobility and flexibility.
· Business top asks to improve labour mobility and flexibility are tax and benefits alignment (53%), better transport links (51%), reduced barriers to firms offering hybrid or remote roles to cross-border employees (49%) and tackling housing affordability (44%). Flexible working will also help unlock recruitment across jurisdictions, with 68% of employees preferring hybrid roles, 60% fully remote roles, and only 14% saying that they would consider jobs that expect them to be on site full-time.
(7) Businesses are ready to leverage AI’s transformational potential for the all-island economy.
· More than half (60%) of employers are feeling prepared for AI’s impact, with 41% reporting changed recruitment needs in the past year. Over one-quarter of businesses (26%) find that AI is bringing about a change in skills needed for existing roles, rather than a need to reduce the number of positions.
· AI use in work is widespread with nearly three-quarters (74%) using AI tools in their day-to-day tasks at least occasionally, with 49% doing so regularly, mirroring broader AI adoption trends in the UK and Europe.
· Only 37% of employers report they use AI as a recruiting tool, specifically for admin tasks such as CV screening and shortlisting, but rarely in interviews (5%).
· Across the all-island economy, only 19% of the smallest firms (up to 10 employees) report that AI has changed their recruitment needs, rising to 55% among the largest firms (over 1,000 employees).
· Nearly two-thirds of respondents in Ireland (62%) believe their leaders understand the potential impact of AI on work and skills ‘fairly well’ or ‘very well’, compared with around half (49%) in Northern Ireland.
(8) Firms view regulatory alignment as vital for their sector’s success.
· Most firms (54%) support regulatory alignment across the all-island economy, which increases to 74% among CEOs and CFOs, as well as among firms that regularly recruit staff across the border.
(9) Citizenship and immigration rules limit all-island labour market mobility.
· 17% of respondents say their citizenship status affects their ability to work cross-border and among them, 75% identify visa or work permit requirements as a barrier.
Angela McGowan, director, CBI Northern Ireland, said: “In a modern economy, we cannot afford to leave talent untapped or critical roles unfilled. That’s why it’s so important for employees to able to work seamlessly across the island and for employers to have access to the all-island talent pool. A delivery driver working between Sligo and Strabane, or an IT specialist working in Dublin and Belfast, should not face unnecessary barriers to doing their job.
“This report highlights the complexities facing firms and people who weigh up decisions to recruit or work across the border. It is an invaluable contribution to the CBI and Ibec’s discussions with government and helps to identify and prioritise key policy issues that must be addressed.
“Working across the border is an important career decision for many professionals. Differences in tax, payroll and other rules, combined with poor connectivity and transport costs, can make that decision more difficult. These complexities also affect a company’s ability to fill skills gaps.
“With labour mobility, flexible working, access to talent and the growing impact of AI all high on business agendas, firms must be given every opportunity to harness the talent available across the all-island labour market. Making it easier for people to work across the border will help firms address skills shortages, enhance competitiveness, and drive economic growth.”
Fergal O’Brien, executive director of Policy, Lobbying and Global Affairs at Ibec, said: “The all-island economy has become one of our greatest shared economic achievements, with an integrated labour market helping businesses access talent, address skills shortages and drive growth on both sides of the border.
“However, these findings show that we are not yet realising its full potential. Almost half of workers would consider a cross-border role, while 69% of respondents believe the skills needed to fill vacancies already exist in the neighbouring jurisdiction. That represents a significant opportunity for businesses and workers alike.
“Yet practical barriers, such as complexity across the different tax and social welfare systems, continue to stand in the way. At a time of increasing global economic uncertainty, we cannot take the success of the all-island economy for granted. Greater cooperation between both jurisdictions, more supportive labour market policies and closer regulatory alignment will be essential to maintaining our competitive edge and unlocking the full potential of our shared economy.”
Mark Wade, director of Hays in Northern Ireland, said:“The All-Island Workforce Report shows a clear appetite from employees and employers for an increase in cross-border working in future. But it also highlights the challenges for those keen to make the most of the benefits that hiring from and working in the other jurisdiction can bring.
“Given the cost of fuel, it is perhaps no surprise to see the cost of commuting coming through as the top reason putting people off. It’s also clear that workers increasingly expect jobs to fit around where they live, but cross-border tax and employment rules still assume a far more conventional working pattern. Encouragingly, business leaders appear more open to the idea of an all-island economy, which may enable change.”
Economy minister, Dr Caoimhe Archibald, said: “There is huge potential in our all-island economy, and this report shows the opportunities that exist to make better use of the skills and talent available across the island.
“At a time when many employers are facing skills shortages, we should be making it easier for people to take up opportunities and for businesses to recruit the workers they need. That means working together to address practical barriers to cross-border working, including transport, taxation and other administrative complexities.
“Developing a more connected all-island labour market can help create more good jobs, widen opportunities for workers and support businesses to grow. I welcome this report and the important contribution it makes to that work.”