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Dublin: 15 °C Saturday 25 May, 2013

Over 40 per cent of small firms plan to create new jobs

However, there are still barriers to employment opportunities including a lack of business and unrealistic salary expectations.

Image: Rick Bowmer/AP/Press Association Images

ALTHOUGH MORE THAN 40 per cent of Ireland’s small businesses believe they will create new jobs over the next 12 months, they say there are still a number of barriers to extra employment opportunities.

The latest survey from the Small Firms Association (SFA) shows that 46 per cent of companies believe that insufficient business is the biggest barrier to job creation.

Costs, employment law, lack of skills and unrealistic salary expectations were also cited by potential employers.

However, seven per cent of those intending to employ new staff have said they will make significant increases to their employment levels.

Another 43 per cent said they will maintain current staff numbers, while 14 per cent plan to decrease the number of people they employ.

“The live register hides the fact that there is a lot of churn in the labour market, with many new jobs being created by entrepreneurial small businesses; however many more continue to be lost particularly in the traditional sectors,” commented SFA director Patricia Callan.

She called on the government to introduce policies that would go toward a resurgence in consumer confidence and reduce the cost of employment for employers.

“These survey results are very promising; however if the Government increases the cost of employment in the forthcoming budget, then these plans cannot be delivered on.”

Callan also criticised the Department of Social Protection’s proposals to introduce mandatory sick pay or increase employer’s PRSI.

About 10 per cent of firms said their businesses were declining at the moment but there was more positive feedback from 47 per cent of respondents who said they were growing at present.

The survey was carried out at the end of July and 628 business owners responded.

More: Sick pay proposal will affect childcare service provision – survey>

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Comments (8 Comments)

  • In a nutshell, if the government stops strangling the life out of the economy there may be opportunities for job creation. Unfortunately, consecutive governments have continued to increase the burden of government with single-minded determination and there’s no indication that’s going to change.
    The size of government as a share of GDP climbed through the 19th and 20th centuries, from 5-10 per cent in the 1870s to the 35-50 per cent norm by 2000. The climb was driven party by the financing of two world wars but also by a changing perception of the role of the state in the provision of social services. However, some high-spending countries made huge cuts from the early 1990s onwards and still retained their excellent performance. Between 1992 and 2007, Sweden, Norway and Canada all reduced public spending by some 15 per cent of GDP without any serious consequences to their human development.
    Tanzi concludes that “public spending of, say, around 35 per cent of GDP should be sufficient” for a government “to satisfy all the genuine objectives that realistically can be expected”. “If public spending is efficient and well-focused”, an even lower percentage should be possible. That is quite encouraging because even the higher level of spending, 35 per cent, should be within the taxable capacity of most modern democracies.
    Vito Tanzi (Former IMF economist)

    “Ireland is no longer a low Government expenditure economy compared with public spending as a % of GNP (gross national product) relative to the Eurozone average (% of GDP) until 2007, when both were c. 44%. The brokers say that since the onset of the economic crisis, government spending has shot up to 60% of GNP compared to 50% of GDP (gross domestic product) for the Eurozone.”
    Goodbody Stockbrokers

    Reply
    • When I read comments like these, I often wonder if business people really know what’s best for business. To blame high government spending for the “strangulation of business” would be akin to McDonalds complaining they have too many customers.

      You cite the increase in public spending between 1870 and the present day resulting from two world wars and social expectations thereafter. This is true but you also omitted the Roaring Twenties an age of an almost total lack of government intervention and the resulting Great Depression thereafter, a calamity only resolved by increased public spending (cutbacks were tried initially which only excacerbated the crisis.)

      The reason why public spending has increased is because of the recession. You are confusing symptom with cause. The increased spending is mainly as a result of bank bailouts and social welfare payments, the later known as “automatic stabilisers” which come into effect when a large amount of people lose their jobs or endure such low incomes as to require state support. Implementing cutbacks has a negative effect on business, leading to a drop in consumer demand, the most important element in any economic activity. This in turn leads to loss of income, less taxes, lower wages or more layoffs leading to higher government spending. The best way to reduce spending is for businesses to create jobs, preferably well paid ones. However, this is unlikely to happen with businesses in this country demanding cutbacks. For some reason they want to commit economic suicide.

      Reply
    • @Kieran. Needless to say your analysis is well off the mark, particularly in relation to the causes and remedies of the Great Depression.
      Two points you may not be aware of:
      The US economy was still depressed when they entered the war (WW2).
      Secondly, the 1929 depression was the US second in the roaring twenties. The first lasting less than two years.
      http://answers.yahoo.com/question/index?qid=20100226020104AAaqBd7

      Reply
  • salary expectations are only there cos people need to be able to see money in there packets at the end of the week, no one wants to work just to pay taxes, USC etc. If small businesses cant offer wages that people want they need to complain to government not be saying people are greedy cos most want a job to make life better not just work for the sake of it and not see anything at the end of the week, using the whole oh cut dole crap wont drive people to low paid jobs it will just drive more people to poverty. The person above says were all responsible for the mess the country is in…..to a degree we did vote in the last shower and current shower of lying toads but there was plenty people during the boom that just worked and lived within the means

    Reply
  • It’s every ones fault the country is the way it is…every ones …everyone got greedy shops butchers pubs petrol every thing went up and we let it …you can buy Irish cheese in Spain for least than half the cost of it in Ireland…same with Irish meat,fish drink all cheaper than at home but we let it where’s the fighting Irish now (did they sell out)

    Reply
  • Excellent news. The line “Costs, employment law, lack of skills and unrealistic salary expectations were also cited by potential employers” is something many of our undergraduates to be should be aware of. I believe lack of skills includes language barriers. When interviewing people, if the candidate speaks a foreign language (Irish doesn’t count) then they’re more than likely to get the job even in SME’s. Students in schools don’t realise this and more should be done to upskill our students.

    Reply
  • It’s easy I think
    Bring early retirement age down to 55 and let the young do the work

    Reply
  • As an employer, really could do with more supports and help in terms of exemptions to make it easier and less costly for early stage businesses to create employment
    http://www.voucherpages.ie/

    Reply

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