Employment costs in Kiltimagh Co Mayo on a par with London

While the debate rages around whether Ireland has a future in manufacturing or services, Knock, Co Mayo native Frank Salmon knows what it takes to set up a services business and run it from a regional base.

But one disturbing factor to emerge is that employing executives in Kiltimagh in the west of Ireland is now almost as expensive as employing the same executives in London.

"We did a cost-exercise in recent months and the cost of employing a person now in Ireland, even in Mayo, versus London is on a par.

"This is a big change that we've noticed over the last five years. Employing someone in London for £20,000 works out at around €25,000 in Ireland."

Sterling

Salmon attributes the rise in costs to the continuing depreciation in sterling.

"Even at an entry-level of £16,000 in London you're paying €20,000 at entry level in the West of Ireland."

Salmon's company CMS Peripherals was established exactly 20 years ago this month when he bought it as a going concern with debt for a consideration of £3.

Since then the company, which specialises in selling data storage systems, has grown to employ 150 people, mostly at a services centre in Kiltimagh, Co Mayo.

He established the services centre in Mayo in 1988 after getting support from IRD Kiltimagh, the local development agency.

"At the time the IDA wanted us to sign a 20-year lease. The local IRD instead were willing to offer us a short-term lease.

Growth

Today, the company is growing at a compound growth rate of 35pc per annum and this year the company will have sales of €155m.

If the company sustains this growth rate, Salmon anticipates it will reach revenues of €400m in the next three years and in the near-term may consider floating on London's AIM to fund expansion.

Locating a business in a western location like Kiltimagh has its pros and cons.

"A lot of our financial business processes as well as intelligence we gather resides in Kiltimagh.

Workforce

"The pros are we have a very settled workforce; a combination of young, ambitious executives who want to go places and then people who've been around the world and are returning to the west to bring their families up.

"So we get a loyal workforce and better retention of staff than London.

"However, the downside is a smaller group of people to tap into."

http://www.independent.ie/business/irish/employment-costs-in-kiltimagh--co-mayo-on

Business Financial Services

Employment costs in Kiltimagh Co Mayo on a par with London