Survey finds small businesses confident of staff increases

NEARLY 40% of small-and-medium-sized enterprises (SMEs) are confident of increasing their staff numbers over the next 12 months, according to a new survey published yesterday.

The latest annual Business Confidence Survey for the SME sector, conducted by O2 Ireland, showed a general lowering in confidence levels among small businesses, with 29% of firms more confident about the coming year than last year.

This figure compares to a reading of 33% last year and 43% in 2004. In addition, the number of firms which are less confident about the year ahead has risen from 10% two years ago to 17% in the latest survey.

With regard to the increase in staffing confidence, the survey didn’t break down either by how many people on average most firms envisaged upping their employee numbers nor whether they reckoned most new recruits would be Irish citizens or migrant workers. Previous reports on such issues suggest that with a shortage of skills in certain areas and a low unemployment rate here, many companies would simply be forced to look overseas for more workers.

A separate TNS/MRBI poll, published in the Irish Examiner yesterday, claimed that a significant number of people in the labour market feel threatened about migrant labour.

The one really positive area of yesterday’s O2 survey actually came in the form of the jobs outlook. It added that only 3% of SMEs expect to cut jobs next year, but an additional 39% feel it is now more difficult to hire suitable staff, with another 15% saying that this isn’t a problem to them.

According to Billy D’Arcy, head of business sales and services at O2 Ireland: “Overall Irish SMEs remain optimistic but this year’s survey finds that cost pressures and competition remain the major threats. This year’s increase in interest rates, fuel prices and other costs may have dampened expectations compared to two years ago.”

The study found that external costs and managing costs are the big challenges facing Irish SMEs going forward, with just over 30% of those surveyed citing these as major threats. Increased competition is seen as the next biggest challenge.