Ongoing accommodation crisis is forcing highly paid overseas workers to leave Ireland for lower-rent economies.
Soaring salary expectations and retention problems are hurting start-ups while even highly paid executives in multinationals are feeling the pinch of Ireland’s ongoing accommodation crisis.
A month ago, an article we wrote about Dublin no longer being a fair city, thanks to spiralling rent costs, greedy landlords, poor planning and soulless gentrification, received a huge response.
‘We fear that if the accommodation crisis is not resolved within the next one to two years, this washout of talent could undermine the Irish digital and technology sectors’
– GARY MULLAN
A new salary survey by Prosperity Recruitment shows that the digital boom comes with a cost, not only affecting emerging start-ups but even the most highly rewarded digital workers and their employers.
The survey also notes that 40pc of staff currently placed by Prosperity come from abroad, revealing just how dependent start-ups and multinationals in Ireland are on overseas workers.
But this dependence on international supply is being jeopardised by the increased cost of living and lack of accommodation.
According to Prosperity, in 2016 and preceding years, the recruiter had a rejection rate of approximately 15pc on job offers to candidates living abroad, but, by the third quarter of 2017, that has doubled to nearly 30pc.
Cost of living negates any benefits or plum salaries
Prosperity’s managing director, Gary Mullan, explained that time and time again, candidates from abroad have cited an internet search on the cost and availability of accommodation in Dublin – and the many associated horror stories – as their reason for rejecting a job offer, and they instead choose to remain at home or locate to a different European city.
The recruitment company used the challenge as an opportunity to establish overseas operations in Berlin and Paris to serve clients there.
Mullan said that salaries in the continental European digital and tech sectors often closely mirror those paid in Ireland, yet the cost of living index can be far lower.
For example, a mid-weight UX designer would pay 80pc less for an apartment in Lisbon, yet they might earn a salary of just 10 to 15pc below what they could earn in Dublin. If you bundle in transport costs in Lisbon (also 80pc less) and the cost of food (at 50pc less) as well as the sunshine, the maths don’t exactly favour Dublin.
In another example, Mullan said that the pay range for a front-end developer in Berlin is €42,000 to €60,000-plus per year, which pretty much tracks the pay range for the role in Dublin, coming in at between €45,000 and €65,000 per year. Berlin, however, offers higher availability of rental accommodation and at 50pc less than what we pay in Dublin. It also offers cheaper transportation at 30pc less, and, across an index of accommodation, transport, food, entertainment and clothing, it is between 35 and 40pc cheaper than Dublin.
Mullan said the top rate of tax in Germany also happens to be a few points lower than it is in Ireland. The pay range for an experienced search engine optimisation specialist in Amsterdam is €30,000 to €55,000-plus per year. Dublin comes in a little lower at €28,000 to €50,000 and also falls short on a cost of living index with Amsterdam, with accommodation approximately 10pc more expensive in Dublin, and a general cost of living that is approximately 15pc higher.
Mullan said that, anecdotally, he is hearing from clients that foreign nationals are quitting good jobs in Dublin to move to cheaper rental markets. He mentioned one client that is losing a key analyst who is returning to Spain due to his inability to move his family here, in light of the typical cost of €2,000 per month for a family-sized apartment within reasonable proximity of his workplace.
Such examples used to be a monthly occurrence, now they are a weekly occurrence, Mullan said.
“Ireland aspires to be a major European digital hub yet it takes a blasé approach to the requisite infrastructure in terms of transport and accommodation,” Mullan told Siliconrepublic.com.
“Digital and tech professionals are often highly networked, and perceptions are quickly disseminated. If the perception takes hold that Ireland has a comparatively high cost of living and a critical lack of accommodation, it will rule Ireland out as an option for a highly mobile and sought-after talent pool.”
As perks such as free food and high salaries proliferate, start-ups are the unwitting victims of progress. “Start-ups find it difficult to compete for talent and tend to incentivise hires with shares and management opportunities – incentives that multinationals don’t tend to offer.”
However, as Ireland still has a far-from-functioning capital gains tax infrastructure, those incentives don’t go far, again hurting start-ups in terms of their ability to recruit talent.
Unless Ireland takes a serious approach to planning and infrastructure, gains in inward investment and fostering entrepreneurship could be squandered, Mullan warned.
“As we see it, it is a problem that is escalating – we are getting more and more enquiries from clients who have lost key employees to other European markets. They engage us to replace them – however, the level of engagement we are receiving from potential replacement candidates in European countries is diminishing, and the candidates who do engage and progress to offer are more likely to refuse, based on cost of living and the accommodation crisis.
“We fear that if the accommodation crisis is not resolved within the next one to two years, this washout of talent could undermine the Irish digital and technology sectors.”
So, what do the digital salaries look like in 2017?
On the digital client side, a person starting out in ad operations in Ireland could expect to begin on €28,000 but, after five years, this could be more than €55,000.
Content managers could start out earning €30,000 but five years later, this could increase to between €55,000 and €70,000.
Scribes or digital content writers are being handsomely rewarded with starting salaries of between €30,000 and €40,000, surging to between €55,000 and €70,000 based on at least five years’ experience.
A head of e-commerce in a digital company or agency could earn more than €110,000 with five years’ experience while social media managers can earn more than €50,000 or €60,000 a year.
Art directors with five years’ experience can now expect to earn more than €75,000 per annum while an experienced UX designer can earn more than €60,000.
Front-end web developers can start their careers on €30,000 but expect to earn more than €60,000 after five years.
A Python developer and PHP developer would earn more than €60,000 after five years.
As for iOS, Android and Ruby on Rails developers with five years’ experience, they can expect to earn more than €70,000 a year.
Your average seasoned CIO and CTO can earn up to €160,000 a year while IT directors, on average, earn around €140,00 per annum.
A Java developer in Ireland with five years’ experience could also earn €70,000 or more a year while similarly experienced C# or C++ developers can enjoy salaries of €80,000 a year.