The survey published yesterday on Ireland's small and medium-sized enterprises made for encouraging reading on job-creation to date, but it also revealed significant obstacles faced by companies wishing to increase employment levels.
The survey showed that almost one in three of the companies surveyed hoped to increase employment this year (with only 3 per cent predicting a reduction in staff), but nearly half the companies reported difficulties in finding the right staff.
The mood among small and medium-sized companies therefore is not one of unbridled optimism even though one third of the firms expressed confidence that the prospects for 2006 were more encouraging than the outturn for 2005, which itself was a very strong year. However, half of the firms surveyed said that the rise in oil prices had affected business while one in four reported that increased competition would be the greatest challenge for 2006.
Increased competition is affecting all industries in this State. The Small Firms' Association, in its end-of-year economic statement, underlined the deterioration in our cost-competitiveness and the damage this has already done to the most exposed sectors of the economy. Employment in manufacturing and production fell by more than 30,000 in the last four years as newly-industrialised countries came on to the pitch with their lower cost base and greatly-improved technical capabilities. Global competition though, is just one factor in the struggle to maintain and improve competitiveness. Account must also be taken of the shift in emphasis from manufacturing to services and the growing importance of specialised training.
Ibec warned last year that Ireland is falling behind competitor economies in the provision of training and this failure to plan and invest for the future assuredly will put jobs at risk. The current education and training schemes are not producing the required results. Nearly one-third of the workforce does not have a Leaving Certificate or higher qualification; only 6 per cent of adults participate in lifelong learning.
Employers are as anxious to remain in business as their employees are to keep their jobs. But employers in exposed sectors need targeted training support. In return they must increase the amount spent on training to 4 per cent of payroll if possible. The Government must also recognise that migrant workers arriving in Ireland need skills training if they are to help plug the gaps that employers are so concerned about. The workforce, without delay, must be helped to acquire skills which are compatible with the needs of the changed economy.