The Small Firms Association (SFA) in Ireland has released the result of its Q1 Jobs Sentiment Survey, painting a mixed picture for the state of employment amongst small businesses in the Republic.

According to the poll of businesses from the manufacturing, distribution, retail and services sectors, the results of which were published on April 7, 55% of the small businesses questioned maintained their employee numbers over Q1 2010, while 29% experienced a decrease in numbers over the three months in question.

“While the survey shows that the pace of job losses within the small firms sector has slowed, we cannot become complacent, many jobs are still at risk until competitiveness and the issue of business costs are addressed.” Avine McNally, Assistant Director of the Small Firms Association observed.

Of the 578 companies (employing 11,574 people) surveyed in February, 24% went on to stated that they expected employee numbers to decrease in the next 3 months, 47% revealed that they planned to halt recruitment in Q2 2010, and 22% announced that they would reduce spending on training.

On top of that, over the next 3 months, 15% of companies indicated that they planned to introduce short-time working (although this represented a decrease of 7% on Q4 2009) and 11% announced plans to implement lay-offs (again showing a decrease of 3% on Q4 2009). Of the companies polled, 24% stated that that they would not be extending any current employment contracts; this figure was unchanged since the last such survey, conducted by the SFA in Q4 2009.

McNally went on to reiterate that:

“These figures indicate that the rate of job losses and reduction in employee hours are slowing down. This is a reflection of the series of actions which have already been taken by many small firms to try and reduce costs and regain cost competitiveness; however, we cannot become complacent, many jobs are still at risk.”

And continued: “The figures also indicate that our ability to create jobs has been severely damaged by this loss to competitiveness and it will continue to be a problem until this issue is addressed. The Government must awake from its slumber and prioritise the restoration of cost competitiveness to the small business sector, which is the only way to retain employment.”

Speaking with regard to training especially, the Association's Assistant Director argued that:

“While small firms are facing various business challenges, it is important that investment in the critical area of training is not further reduced. It has never been more important for an owner-manager to have every possible competitive advantage in running their business. Owner-managers need to ensure that they and their staff are equipped with the correct skills to assist them in developing innovative new products and processes, and sales techniques, which will assist them to trade out of this recession,” continuing:

"The removal by the Government of funding for in-company training in order to train the unemployed for jobs that won’t exist, is a serious policy error and must be immediately reassessed.”

Actions recommended by the Small Firms Association to improve the situation for small businesses in the country include that:

- All Government agencies pay their own bills to small businesses within 10 days, including local authorities and the HSE, which will assist small businesses with their cash-flow;

- That employers’ PRSI (Pay Related Social Insurance) is reduced in order to incentivise companies to keep people in jobs; and

- That action is taken to tackle the excessive cost-base for businesses in the Republic, including taking action to reduce (or at least slow the pace of increase of) the burden imposed by electricity, local authority charges and other energy costs (e.g. gas/oil).