The relationship between the UK and Ireland has traditionally been strong when it comes to business. With a mere one-hour flight separating the two capital cities, the Republic of Ireland is the fifth biggest customer for UK exports, and billions of pounds of trade pass between the two countries every year. Linked by language, the legal system and with an economy that’s growing three times faster than any other European country, Ireland is proving a popular prospect for businesses who want to escape the financial and regulatory ramifications of Brexit, by moving across the border.
Ireland also presents an attractive place for employees who want a little more from their working life. With many major multinational firms, including Microsoft, Paypal and Google, working out of Dublin, business is booming. Employees are rapidly being lured form the UK to resettle on the Emerald Isle, tempted by lower tax rates, the prospect of a better quality of life, and more affordable housing rates.
But though the economy is thriving, how do salaries compare between the two countries? Ireland, of course, is part of the Eurozone, whilst the UK clings to the Pound Sterling as its main form of currency. With fluctuations in the local economy, and in currency, it can often be hard to decide which country will provide for money- and though many people think Ireland is the cheaper place to live, it’s worth looking at the facts first.
The housing situation
Though London has a reputation for being the very peak of expensive living, Dublin is fast catching up.
Irish housing prices vary wildly depending on location, and parts of Dublin – particularly in the south – have seen rental prices creep higher than the London average, with Northern Ireland rental prices rising at more than twice the UK rate over the past year. Meanwhile, the average Ireland rent stands at €1,261: an all-time high. To compare the capitals, the average rental in Dublin has soared to €1875 a month, which has contributed to Dublin over taking London as one of the most expensive cities in a worldwide cost of living ranking.
For those who would rather buy, the outlook is also worrying. Ireland is currently undergoing something of a housing shortage, which is fuelling demand and, in turn, driving up house prices. Indeed, the International Monetary Fund recently warned that Irish properties were ‘mostly overvalued’, whilst Irish house prices are predicted to outpace those in Europe over the next two years.
The price of living
The rent might be expensive, but where is it cheaper to live? Though many people might instinctively say Ireland, this may not necessarily be true: rising costs across the country spell a more squeezed wallet for workers. The UK’s main commuting hub, London, boasts a more reliable transport network that will get you further for your money, whilst Dublin’s high cost of living means that you may need to live in far-flung places like Kildare to save money- which will then be negated by train costs.
When it comes to your local shop, too, Britain would seem to have the edge, with groceries costing less on average. Indeed, necessities like bread, eggs and cheese cost up to 20% more across the Irish Sea, whilst London’s formidable range of restaurants mean that it’s cheaper to treat yourself.
The Irish unemployment rate continues to fall as the economy grows. Despite this positive outlook, however, there are many employment challenges presented by the Irish economy.
One issue is salary conversion. As many companies translate a UK salary into an Irish one via the exchange rate – without taking cost of living into account – this can ultimately lead to a lack of ability to attract similar calibre candidates in the Irish market. Organisations are wising up to this, however. At our BMS office in Ireland, we’ve seen a 20-25% increase in salaries across our core business over the last 6-12 months as companies compete for staff. This has resulted in an increasingly candidate-driven market.
What about Brexit?
One issue that has been making headlines on both sides of the border is that of Brexit. As a committed member of the EU, Ireland has access to trade with the EU, as well as ‘passporting rights’, which allow Irish businesses, especially financial firms, to do business with all member countries. As the UK is set to lose this upon its exit from the EU, many companies are looking to open satellite offices in European countries to retain their access to the continent; as a result, Dublin looks to be a popular choice for firms wanting to relocate.
Though it’s too early to tell, it’s easy to see Ireland profiting from this trend and attracting more business to its major business hubs as a result, thereby driving up salaries and living costs still further.
Watch this space.
Make the right move
UK companies placing staff in Ireland need to factor in the above variables in order to attract – and retain – the best talent. A straight currency exchange from pound to Euro won’t do – instead, you need to factor in rising accommodation costs, the price of living and potential impact Brexit may have on the economy. Keep yourself informed: search our Performance Blog for more insights, or speak to us about how we can help make the Ireland move easier.
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