SMEs and Skills Gaps – Seanad Éireann – Order of Business – 22nd May 2018
SMEs are the back bone of our society but there is a skills shortage for SMEs
I refer to small and medium enterprises, SMEs, an area on which I will focus. They are the backbone of our economy. Some 97% of all businesses in Ireland are small or medium sized and employ a significant number of people. The EU Commission recently published a report which stated that small and medium sized businesses in Ireland contribute €55.5 billion to the Irish economy. I want us to focus on this issue and support SMEs in any reasonable way we can in terms of their growth, development and sustaining them in future.
I will focus on two areas today. One is the skills gap. A significant skills gap is appearing in Ireland, in particular in respect of SMEs. Larger companies, many of which are multinational, are attracting many prospective employees, but SMEs do not have the resources to compete with them in incentivising people to work for them. This is particularly true in rural, rather than urban, areas of Ireland. I have the details of the report here. It found a 39% skills gap in marketing, 35% in sales and 33% in production. It is a significant in issue in the technology industry in Ireland. Most of the technology industry comprises small and medium sized companies. Some are based in third level institutions.
Apprenticeships and qualified people staying in particular businesses are also issues. Senator Craughwell spoke about pilots from the Air Corps on a number of occasions.
They are leaving in droves and we have to do something about it, from a State perspective and from an SME perspective. Staff retention and acquiring staff are huge issues and I will come back with suggested solutions to these. This Friday, 25 May, the general data protection regulation, GDPR, comes into effect but the majority of small and medium-sized businesses know next to nothing about it or about how it affects them, which will be in a huge way. There are consequences, unintended when the legislation was passed, for small and medium-sized businesses with significant fines in what is significant legislation. There is a significant disconnect between the State and SMEs on what it is about, how the legislation can be put into practice and its cost, which is very significant. There should be workshops and some space should be afforded to SMEs to allow them to get up to speed with the legislation.
I have a couple of solutions. We should have an effective employee share option programme, and I welcome the statement made yesterday by the Minister for Transport, Tourism and Sport at a round-table conference I attended regarding employees potentially having some form of a shareholding in State bodies. A programme is available for SMEs called the SAYE programme, a Revenue-approved save-as-you-earn scheme. It is a fraction of what is available in the UK and SME employers and employees are not taking it up. It has to be a lot more user-friendly to be beneficial to both employers and employees. By having such a scheme, employers and employees will stick together more and employees will not jump ship to larger employers as often as they do at the moment. We now have a different problem from the one we had three years ago when there was unemployment of 14.5%. It is now down to just over 5.5% so we need a very different strategy.