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

Eight in 10 smaller companies are spending more on hiring than before the pandemic as workers demand higher wages to offset inflation.

According to a survey by the Ibec group of companies and the consulting firm BDO, wage increases are the top concern for 32 percent of small business bosses.

More than 60 percent of small and medium-sized enterprises (SMEs) have hired new employees in the last two years, and the figure is over 70 percent for SMEs with more than 100 employees.

However, 83 percent said retaining staff was a “significant challenge,” with 70 percent saying the pandemic has had an impact on hiring foreign workers.

After pay rises, margins are companies’ second biggest concern due to overall cost pressures, with 29pc reporting fears of inflation.

Access to appropriate skills was the number three concern for 18 percent of companies, while affordable housing for employees was a concern for 4 percent of companies surveyed.

However, 60 per cent of Irish SMEs believe revenue will increase over the next 12 months, while 20 per cent fear revenue will fall.

“It is clear from the results that the local and international business landscape for Irish SMEs is challenging and evolving rapidly,” said Michael Costello, Managing Partner of BDO in Ireland.

“Some of these challenges, like recruiting and retaining employees, have plagued executives for some time.

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

167 companies with fewer than 250 employees were surveyed for the 2022 SME sentiment index. It was conducted by Coyne Research on behalf of BDO and Ibec in May and June.

It showed that 43 per cent of Irish SMEs have no current or future R&D plans compared to 45 per cent investing in R&D.

Companies can reduce their overall corporate tax burden with R&D activities.

More than 10 percent do not have a cyber security plan for their organization.

Businesses expect 54 percent of their employees to return to full-time office work in the next six months, with 34 percent at home part-time and 12 percent off-site entirely.

But 45 percent of companies say there are no benefits for employees working from home, with employee engagement, performance monitoring and data security being top challenges for bosses.

Meanwhile, SME bosses say their business travel is half what it was before Covid.

https://www.independent.ie/business/irish/80pc-of-smes-spending-more-on-hiring-as-inflation-fears-mount-survey-41922613.html 80% of SMEs are spending more on hiring as inflation fears mount – survey

Fry Electronics Team

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