Small firms issue job cuts warning

JOB losses will continue to run at almost 1,000 a week unless the Government intervenes to cut those business costs it controls directly, the Small Firms Association believes.

Director of the association Avine McNally said that in 2010 in excess of 60,000 redundancies were notified to the Department of Enterprise, Trade and Employment — an average of 1,075 a week.

She said one of the greatest concerns about the high level of redundancies is that companies’ ability to create new jobs has been damaged by loss of competitiveness. “There is a clear need for the Government to now prioritise the restoration of cost competitiveness to the small business sector, which is the only way to stop further job losses,” Ms McNally argues.

She said that while small firms have taken actions to regain cost-competitiveness, many Government-controlled costs remain.

“In the absence of reductions in these costs, small businesses will continue to have to further reduce the costs that are within their control, and this will inevitably mean a further loss of jobs,” she said.

Ms McNally argued that as the recovery to date has been concentrated in the export sector and the labour-intensive domestic sector is lagging behind, job creation in the economy will remain muted.

“The common agenda must be to promote economic growth, to adopt the right policies to ensure that growth comes with jobs, and to increase labour market efficiency to allow a better match between demand and supply. Job creation must be at the heart of the recovery policies,” she said.

Ms McNally believes the loss of jobs in the services sector is being compounded significantly by the downturn in consumer spending.

“The manufacturing sector shows the loss of 11,607 jobs and given the global pressures and costs associated with doing business in Ireland this sector maintains a worrying trend,” she said.

“During the year the impact of job losses has been concentrated in the lower skilled occupations.

“Ireland appears to be experiencing a classical labour market mismatch situation, with significant skill shortages in some areas such as IT and specialist sales coupled with an oversupply in other occupations. The task the Government faces in re-skilling and retraining is daunting, but necessary, if Ireland is to avoid a long period of structural unemployment.”