Unlocking the potential of the All-Island labour market
The all-island economy, underpinned by more than €17bn in annual cross-border trade and deeply integrated supply chains, provides a strong foundation for economic growth, competitiveness, and resilience across both jurisdictions. The free movement of people across jurisdictions underpins the peace and prosperity of this island while helping businesses address skills shortages and access talent. For workers, it creates opportunities to live and work across jurisdictions. Despite its integral role in supporting the all-island economy, cross-border working is failing to operate at its full potential.
CBI Northern Ireland and Ibec's new report, all-island Labour Mobility: Obstacles and Opportunities, finds that taxation complexity, visa restrictions, and a lack of clear guidance continue to create friction for businesses and employees. At a time when employers across the all-island economy are seeking to address skills shortages and improve productivity, these barriers are limiting growth and undermining competitiveness.
A clear opportunity for delivery
Businesses have welcomed the commitment made by the Prime Minister and Taoiseach at the UK-Ireland Summit to engage on a bilateral approach to addressing issues arising from cross-border and hybrid working. The focus should now shift to implementation.
The CBI NI and Ibec are calling for the establishment of a joint forum to progress the development and delivery of a bilateral approach to all-island labour mobility, with clear timelines for implementation.
This bilateral approach should focus on three priority areas:
- Simplifying taxation arrangements
- Improving mobility for non-Irish or British workers
- Providing a one-stop shop for clear, reputable guidance on cross-border employment.
Strategic cooperation in these areas would reduce friction and improve access to skills while supporting the island's deeply integrated supply chains.
The problem
The growth of hybrid working has increased the complexity associated with cross-border employment, while differing immigration systems continue to limit workforce flexibility for businesses operating on an all-island basis. Employers are now increasingly making operational and recruitment decisions based on compliance requirements rather than business need.
Businesses report that labour mobility barriers are making it harder to fill skills gaps, increasing administrative burdens, and reducing flexibility in how they deploy talent. In some cases, businesses are limiting cross-border hybrid working opportunities because the compliance burden outweighs the operational benefits, while others have narrowed recruitment to one side of the border to avoid additional complexity.
As the all-island economy seeks to attract investment and address critical skills gaps, these barriers are holding back potential.
Simplify taxation complexity
Taxation complexity remains one of the most significant barriers identified by businesses. Dual payroll obligations, uncertainty around permanent establishment risk, and the interaction between tax systems can create substantial administrative and financial burdens for both employers and employees. These challenges have become more acute as hybrid working patterns become the norm but are not inevitable; other jurisdictions have demonstrated that bilateral approaches can reduce friction and provide greater certainty for employers and employees. A modernised UK-Ireland approach to cross-border working would help ensure taxation arrangements better reflect contemporary working patterns and the unique nature of the all-island economy.
Improving mobility
Businesses also identify visa restrictions as a growing constraint on labour mobility.
While British and Irish citizens benefit from the flexibility provided through the Common Travel Area, employers face significant challenges when seeking to deploy non-British and non-Irish nationals across jurisdictions, including EU nationals. Separate immigration systems restrict businesses from allocating talent where it is needed, even when operations span both sides of the border.
This is particularly challenging for sectors experiencing acute skills shortages and for businesses operating on an all-island basis.
An all-island Work Visa would present a practical solution, enabling businesses to access international talent more effectively while supporting the smooth operation of the all-island economy. Combined with clearer guidance for employers and employees, businesses consistently tell us this would support their ability to operate across the island.
Conclusion
Realising the full potential of the all-island economy requires labour mobility to operate as effectively as the supply chains, businesses, and communities it supports.
The economic case is clear, and both governments have signalled their intent to act. The opportunity now is to work together to deliver practical solutions that reduce barriers, strengthen competitiveness, and unlock the full potential of the all-island economy.
To request more information or to share your own business insights and experiences, please contact Melissa McLaughlin, Senior Policy Advisor, CBI Northern Ireland.
