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80pc of SMEs spending more on hiring as inflation fears mount – survey


80pc of smaller Irish firms are spending more on hiring than they were in 2019

80pc of smaller Irish firms are spending more on hiring than they were in 2019

80pc of smaller Irish firms are spending more on hiring than they were in 2019

Eight out of ten smaller firms are spending more on hiring than they were pre-pandemic, as workers demand higher wages to offset inflation.

Salary increases are the number one concern for 32pc of small company bosses, according to a survey by business group Ibec and advisory firm BDO.

More than 60pc of small and medium-sized enterprises (SMEs) have hired new workers in the last two years, rising to more than 70pc for SMEs with more than 100 staff.

However, 83pc found it a “significant challenge” to retain staff, with 70pc saying the pandemic has had an impact on hiring foreign workers.

After salary hikes, firms’ second-biggest concern is squeezed margins due to overall cost pressures, with 29pc reporting inflationary fears.

Access to suitable skills was the number three issue for 18pc of firms, while affordable housing for staff was a concern for 4pc of businesses surveyed.

However, 60pc of Irish SMEs believe revenues will increase over the next 12 months, with 20pc fearing revenues will fall.

“It’s clear from the results that the local and international business landscape for Irish SMEs is challenging and evolving fast,” said Michael Costello, BDO’s managing partner in Ireland.

“Some of those challenges, such as recruitment and retention of staff, have been concerning business leaders for some time.

“Others, such as rising energy and commodity prices, are new and need to be actively addressed.”

The 2022 SME sentiment index surveyed 167 firms with fewer than 250 employees. It was carried out by Coyne Research on behalf of BDO and Ibec in May and June.

It revealed that 43pc of Irish SMEs have no research and development plans currently or in future, compared to 45pc who are investing in R&D.

Firms can reduce their overall corporation tax bill with R&D activities.

More than 10pc do not have a cyber security plan in place for their company.

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Firms predict that 54pc of their workers will be back in the office full-time over the next six months, with 34pc at home part-time and 12pc fully off-site.

But 45pc of firms say there are no benefits to employees working from home, with staff engagement, performance monitoring and data security the biggest challenges for bosses.

Meanwhile, SME bosses say they are travelling half as much for business than they were before Covid.

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