Profit-sharing schemes should be encouraged by the Government as a non-inflationary method of maintaining staff loyalty in small and medium-sized enterprises and stopping the "drift" towards large corporations, the small firms' group, ISME, stated yesterday. Presenting the results of a survey on manpower shortages, the group said that, under current legislation, introducing profit sharing was costly and complex.
"ISME proposes that the Finance Act should include a profit sharing scheme where SME companies are empowered to distribute a certain proportion of profits tax free amongst all staff," the group stated.
ISME's chairman Mr Seamus Butler said SMEs (small and medium-sized enterprises) were looking for parity with multinationals in the way the Government favoured them.
"We are on the brink of major global economic slowdown and all of these multinational corporations sell their goods outside of Ireland, and they are bound to be affected."
Although the unemployment rate is down to 7.1 per cent, the group, representing almost 2,000 enterprises, also believes that more women could be encouraged to return to work if adequate childcare provision was introduced.
A scheme could be introduced along the lines of the Children's Allowance. "It would take childcare out of the black economy. It would raise standards because it would be on receipted income," Mr Butler said. ISME is also seeking FAS trainee-ships to be aimed at their sector as well as the multinational one.
According to the survey of 493 SMEs, 63 per cent had job vacancies and 85 per cent favoured the concept of profit-sharing schemes. Almost 60 per cent were in favour of giving work permits to non-EU nationals and a similar number had lost staff to bigger business.
ISME stated that wage inflation was running at 10 per cent for manual employees and 15 per cent for key management.
One person surveyed, who said there were 250 small businesses in Donegal, questioned whether there would be 3,000 job losses among them if they received the same State aid as Fruit of the Loom.
