Demand for IT staff in small to medium-sized enterprises (SMEs) has fallen by more than 83pc, according to the Ninth National Employment Survey carried out by the Small Firms Association (SFA).
The latest survey, which shows that the Irish economy can no longer create jobs as quickly as it is losing them, found that more than 58pc of SMEs have signalled a decline in demand in labour, with the number of projected jobs in 2003/04 down from 36,238 to 17,420. As well as this, many companies are hampered by rising wage costs, with 56pc of companies surveyed citing unrealistic salary expectations as the one reason why many can’t create new jobs. On top of this, demand for foreign labour has fallen by more than 56pc.
Pat Delaney, director of the SFA, said that employment creation in the private sector has “hit a brick wall”. This year demand for labour will be 2.7pc down from 6.5pc in 2002 and from 7.8pc in 2001 and 10.9pc in 2000.
Delaney said: “For the fourth successive year small companies will create fewer new jobs than the previous year. While they will create 17,420 new jobs in 2003 the corresponding figure in 2002 was 36,238; 45,942 in 2001 and 64,201 in 2000. While the survey shows that the labour market is now less rigid, those companies that are prepared to create jobs continue to be hindered by lack of skills and unrealistic wage expectations.
“There are now serious structural flaws in the Irish business model, which we must address if we are to maintain employment. Failure to do so will result in very large increases in unemployment and taxation, which will be required to meet welfare payments. Over the past year 18pc of companies have made staff redundant and 9pc state that they face making redundancies this year. Some 12pc of companies state that they will place employees on shorter worker weeks or have short term lay-offs over the coming year,” he added.
The demand for skilled labour among respondents has increased slightly to 17pc of companies in 2003 from 16pc in 2002. However, lack of skills was cited by 42pc of respondents as a difficulty in filling vacancies.
Demand for general operatives has remained steady at 19pc, but IT related demand has declined by 83pc (from 6pc to 1pc of respondents) over the previous year. Demand for administrative staff has declined by 52pc over the previous year. Of those companies with vacancies, the retail sector led the way at 48pc, but even this figure had declined from 62pc on the previous year. Service companies are most likely to recruit those with qualifications (24pc). However, this figure has also declined by 25pc on the previous survey.
By John Kennedy