Firms are showing a lack of confidence in further employment growth for the first time in six years, according to the latest annual survey of the Small Firms Association (SFA).
The survey found small firms expect to create 29 per cent fewer jobs this year and that "unrealistic salary expectations" is the main reason for the decline.
The director of the SFA, Mr Pat Delaney, says 900 companies responded to the questionnaire, which covers the manufacturing, distribution, retail and services sectors. Small firms will create 45,942 jobs this year, compared with 64,201 last year and 83,000 in 1999, according to Mr Delaney.
"There appears to be a change in emphasis from expansion to consolidation," he says. Some 41 per cent of companies attribute the decline in employment growth to "unrealistic" pay expectations.
The report projects trends for 2001, based on experience of members from the first quarter of the year.
"The demand for skilled labour among respondents has declined from 24 per cent of companies in 2000 to 15 per cent in 2001. Demand for general operatives has declined from 44 per cent to 30 per cent, and IT related demand has declined by 20 per cent over the previous year," states the report.
However, demand "for highly qualified staff has increased by 33 per cent over the previous year".
The percentage of companies experiencing expansion problems because of a shortage of labour has declined from 71 per cent in 2001 to 38 per cent this year.
Part of the reason may be more firms are using flexible working time arrangements. Eighty-one per cent of companies say they would consider it. Sixty-nine per cent of companies would recruit mature employees in the 50-plus age bracket and 29 per cent have already done so.
