Batt O'Keeffe
Question:15 Mr. B. O'Keeffe asked the Minister for Enterprise and Employment his views on remarks by the Irish Small and Medium Enterprises Association that it is finding it difficult to recruit employees. [9547/97]
Other Questions. - Small Business Association Survey.
I have noted the findings of a recent survey by the Irish Small and Medium Enterprises Association, and of a similar survey by the Small Firms Association, in relation to the recruitment of employees by member companies.
Following these reports, I asked my Department to initiate a process that would investigate the precise position concerning recruitment patterns.Accordingly, my Department convened meetings with FÁS, ISME and the SFA. It was agreed that both SFA and ISME would circulate questionnaires to their member companies seeking details and specifications of all existing vacancies.In respect of each completed questionnaire the following process is being followed. Each company listed is being contacted by the local FÁS representatives. Companies that indicated no vacancies are also being contacted to determine if their views assist this process. All vacancies listed are being considered by FÁS and possible candidates submitted to the companies. All candidates are being tracked to establish if they were suitable for calling for interview and if not, why not. If called for interview, did they attend? How did they perform? If offered a position, did they accept or turn up and, if not, why not. If they took up a position, how did they perform?
This exercise, which is currently in progress, should be completed in a matter of weeks. It will be a valuable exercise for all concerned in establishing proper empirical evidence on recruitment patterns. It should also foster a better understanding between employers, their representative bodies, FÁS and potential employees of the various opportunities and threats that exist in a dynamic labour market.
There should be a less convoluted way of matching existing vacancies to unemployed persons. What are the Minister's views of the remarks by the Irish Small and Medium Enterprises Association? Did he find them interesting and did they stand up to scrutiny?
The association's main remarks centred on its recruitment difficulties. I would not agree with some of the remarks but, nonetheless, they reflect the views of the business organisation in regard to recruitment difficulties. The Department's response is to obtain empirical evidence of the nature of those recruitment difficulties. It will focus on the reality on the ground rather than the more colourful descriptions of the reality we have heard in this debate. The progress being made in the survey we are currently conducting in a systematic way with both of the small firms associations should highlight the real evidence which will be useful for the future. I will not be led into commenting on some of the colourful phraseology used.
The Minister has just said he does not approve.
While the Minister's survey is welcome, will he not accept it is the tax wedge that makes it unattractive for so many to take up work? In the light of what the Minister for Finance confirmed here two weeks ago, that a person earning £167 per week lost £10 per week when they got a £20 per week pay increase, will the Minister accept that the manner in which the tax and welfare systems operate, particularly in relation to low pay, act as a disincentive for people to take up jobs?
The Deputy will be aware that this has always been a problem in the economy. She will also recognise that considerable progress has been made in this regard. For example, the tax burden on the average industrial wage has been reduced by five percentage points, in other words, the net take from average wages is down five points. That is a considerable reduction in the tax wedge for PAYE workers. In addition, the employers' PRSI element has been reduced, with two-thirds of employees now on the new low rate of employers' PRSI. They are significant changes, the benefit of which we have seen in the strong employment growth. On the other side of that equation, the Minister for Social Welfare introduced a number of schemes that have assisted those people who faced disincentives to going back to work. For example, the family income supplement has been substantially improved and over 20,000 people are currently availing of the back to work allowance scheme. These initiatives are working to remove those disincentives for many people on low pay. I am aware also that approximately 37 per cent of the people recruited by IDA and Forbairt companies were previously unemployed. There is a significant flow in the numbers coming off unemployment registers and unemployed people are benefiting from the creation of job opportunities. That is clear in the falling levels of unemployment.