According to recent research released by the Ireland Development Agency (IDA) there are currently 140 shared service centres (providing technical support, finance and accounting, human resources and payroll functions) that exist in the country, and employing 35,000 staff. The Chief Executive of IDA in Ireland (Barry O’Leary) stated that the sophistication of the centres had increased significantly in the last 20 years.
Shared Services is a mature initiative in Ireland, with a number of multinational organisations migrating to Ireland from the mid 90s onward. With its maturity, and given that much of the shared services have already performed the transactional activities in the relevant function, it is natural that over time organisations have the comfort to transfer more value add activities to the shared service centre, with the transactional activities migrating offshore. This continues as a trend in Ireland.
However, let’s be honest, what will continue to make Ireland attractive to new entrants and existing entrants are the European tax advantages of locating in the country – this represents one of the most (if not the most) attractive company taxation conditions in Europe and the tax savings from being headquartered in Ireland offset the lost opportunity of migrating work to lower cost locations!