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A new survey from Ibec suggests that skills shortages have become one of the most pressing challenges facing Irish employers, with more than four in five firms reporting gaps that are damaging productivity, innovation and competitiveness.

The 2025 Skills Survey indicates that the disconnect between the skills available in the labour market and those required by a modern economy has intensified. What was once viewed as a secondary concern is now regarded by many employers as a direct threat to long-term growth and resilience.

According to the findings, companies are operating in an exceptionally tight labour market while also facing rising pressure to adapt to new and emerging technologies, including artificial intelligence. Many employers expect competition for skilled workers to increase further over the next five years, which could place additional strain on business performance across the economy.

The research shows that organisations are struggling on two fronts. Recruiting suitably skilled staff remains difficult, while addressing existing skills gaps internally is proving equally challenging. Smaller firms, in particular, face constraints, as they often prioritise immediate operational and regulatory training over longer-term strategic upskilling.

The survey highlights a notable divide between large enterprises and SMEs when it comes to preparing for AI adoption. Larger organisations are more than twice as likely to be investing in AI-related training, reflecting differences in available resources and capacity.

Ibec has renewed its call for the Government to take action on the National Training Fund. The group points to a growing surplus in the fund, projected to reach €3 billion by 2030, which it believes reflects a significant underuse of resources intended to support workforce development.

Meadhbh Costello, Senior Executive for Skills and Innovation Policy at Ibec and author of the report, said it is concerning that employers contributing 1% of payroll to the fund cannot access sufficient support to prepare their workforce for future demands. She also noted that training places in critical workforce development programmes have stagnated in recent years, despite strong demand.

The survey is based on responses from 281 CEOs and senior HR leaders, examining the nature of skills gaps within their organisations, the impact on operations, and the approaches being taken to address these challenges.

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