Irish SMEs continue to struggle to compete with multinationals for quality employees

Irish SMEs have little or no knowledge of employment law and struggle to compete with multinationals for top quality employees, new research suggests.
Irish SMEs continue to struggle to compete with multinationals for quality employees

Close to eight in 10 small and medium-sized businesses have, at best, a basic knowledge of employment law.

This is one of a multitude of factors that more often than not prevent smaller firms winning the talent battle with large multinationals.

Among the other disadvantages SMEs struggle with is the absence of a dedicated HR function in many companies and a lack of training and experience in hiring staff.

“There is no doubt that there is a chasm in the depth of resources between multinationals and SMEs,” said Hays Ireland managing director, Richard Eardley.

“However, we should not underestimate what SMEs can offer to the top candidates. There are many advantages to working in smaller businesses such as the environment, the range of work you are involved in and ability to directly impact on results.

The research points to an increasing level of optimism among SMEs with three quarters of the 560 or so surveyed leaders more confident in the company’s ability to grow than they were a year ago.

Despite this renewed optimism, more than 40% of respondents feel one of the biggest obstacles to growth is the ability and resources to recruit the right staff in an increasingly competitive market.

One of the biggest stumbling blocks often cited by SMEs in recruiting staff is the country’s prohibitive share option regime.

Bodies such as the Small Firms Association have campaigned to make share options more accessible as a means of compensating for the smaller wages SMEs can offer prospective employees.

In the UK, shares up to a value of £250,000 can be given to new employees to help attract staff and tax is not applied until the shares are disposed of. Under the Irish system, however, an immediate tax liability is triggered.

Meanwhile, ICT Ireland the Ibec-affiliated Irish Software Association (ISA) have published a series of recommendations aimed at developing Ireland into a “global technology powerhouse”.

Among the recommendations put forward by the bodies are: Rapidly developing a coding curriculum at second level; Supporting the new tech apprenticeship models; Becoming a global leader in tackling the gender imbalance in the sector; Establishing a full department and minister for digital affairs; Introducing a Seed Enterprise Investment Scheme to encourage investment in tech startups.

With other countries “upping their game”, Ireland needs to keep pace with progress elsewhere in order to maintain its reputation as a tech hub, according to director of ICT Ireland and the ISA, Paul Sweetman.

“The sector employs over 105,000 people, up 40% from 2010. Recently, it has often been the case that where one company finishes a recruiting round, another has a major jobs announcement.

“Last month alone, over 1,100 new jobs in tech companies were announced. We also have a growing indigenous technology sector that employs 12,000 people and has total sales revenue of more than €2 billion per annum.

“Many of these companies are leading exporters and becoming tech multinationals in their own right,” Mr Sweetman said.

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