One third of SMEs will cut jobs in 2009: SmartCompany poll

More than a third of small and medium businesses are planning to cut jobs in 2009, according to a SmartCompany poll.

But the cuts are not where you might expect.

Marketing and sales staff appear fairly safe and the PA’s job is almost immune from the cuts. But the axe is set to fall on operations staff, middle management and administration staff.

These are the results from 102 employers who answered a SmartCompany poll conducted late last week. The poll found that 36% of bosses plan on cutting staff this year. Almost 40% of those bosses will cut between 11% and 20% of staff, while nearly half will cut 10% or less.

And those staff that keep their jobs should not be too optimistic about promotions this year, with 54% saying they will not give any pay rises to staff, while 58% say they will hand out less pay rises to staff in 2009.

But in good news for the economy, while some bosses are planning to cut staff, about 58% are planning to hire staff this year.

Karen Crawford, partner at PwC, says some businesses are taking this period to reassess their true resourcing needs to ensure they are not carrying extra capacity.

“Often businesses carry a bit of extra capacity to take advantage of opportunities when they arise, so they are now looking to bring those resources back to a more base level,” she says. “And smart businesses realise that now is the time to invest in marketing and stand out from the others – not the time to cut back.”

Greg Hayes, accountant at Hayes Knight, says that the SME sector will have a fair amount of restructuring this year.

“Our rough analysis is that 30% of companies are in big trouble, for 50% it’s about sustainability and 20% are predators, looking for opportunities,” he says. “That means the focus for most is on the creation of revenue dollars, so it’s no surprise that they are keeping the sales and marketing people on to create that revenue.”

Hayes says that he is not surprised to hear that 58% are planning to hire staff, but warns they might be replacing staff who are not high performers.

“We have been through an environment where recruiting the right type of staff has been hard. So 2009 is going to be a year for SMEs to get the right type of people into their business. Those who do say they are going to hire might not be planning to increase their numbers over all. Instead they might be saying we accepted someone working to 60% of what we need. Now we can get to 90%.”

When asked what was the one thing the Government could do to protect jobs, the majority (26%) recommended cutting payroll tax while 22% want business tax cuts and another 22% want assistance for business. About 20% say that infrastructure spending would help but only 10% want income tax cuts.

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