Third of SMEs aim to up employment

Approximately 30% of SMEs have hopes of increasing their workforce between now and the end of the year, according to a new survey, while nearly half expect their wage bill to be higher this year than last.

The latest Jobs and Pay Sentiment Survey, from the Small Firms Association (SFA), also shows that more than 60% of SMEs, here expect to retain employee numbers for 2014, as a whole, while only 7% expect to end the year with a smaller workforce than they started with. Still challenging labour and business input costs are to blame for the 7% of firms set to reduce employee numbers this year.

While noting that the recovery path for the jobs market “won’t entirely be smooth“, SFA director, Patricia Callan said the latest figures show positive signs; adding that they send a clear message to the Government ahead of next month’s budget.

“There are sectors such as traded services and hospitality that are showing strong job growth; for other sectors job creation will be fragile and every step must be taken to ensure no additional taxes are placed on labour to ensure job retention and growth.”

“Labour costs have risen in recent times; this reflects the impact of Budget 2014 on employers, with increases in employers’ PRSI and health insurance. While some moderate wage growth will continue during the remainder of 2014, mainly in the form of performance-related bonuses rather than wage increases, these will be focused on the more strongly performing sectors of the economy with many small firms not in a position to carry additional wage costs,” said Ms Callan.

The SFA wants Budget 2015 to provide a reduction in the lower rate of employer PRSI, from 8.5% to 4.25%; a reduction in the marginal rate of tax and an extension to the entry point to said rate, as well as the dropping of the pension levy.

“Tackling unemployment remains a challenge, and this needs to be reflected in the measures to support SMEs and job creation in Budget 2015,” Ms Callan added.