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Entrepreneur survey: Economy bottlenecks in the labour area Back
November 23rd, 2015: Economy bottlenecks in the labour area, particularly for skilled staff are highlighted in a survey of former EY Entrepreneur of the Year finalists. Tax issues are also highlighted as problems but in respect to access to finance, considerable progress is noted in the past year.
Difficulty in attracting skilled labour is a key challenge facing some of Ireland’s leading entrepreneurs, according to the latest EY Entrepreneur Of The Year (EOY) survey. 30% of respondents cited a shortage of experienced talent as their number one challenge. The survey was conducted among 416 of Ireland’s leading entrepreneurs, all of whom are previous EY EOY finalists.

Shortage of experienced talent
EY say attracting and retaining skilled talent is a key challenge to doing business in Ireland. This applies across a range of sectors including tech, manufacturing, food & drink, retail, telecommunications and hospitality. This increased demand for skilled labour is evidenced by the results that 84% of respondents grown their total headcount in the past year.

EY’s Kevin McLoughlin, Partner Lead, EY EOY commented: “Difficulties with recruitment are directly contributing to the issue of scaling – which was cited by 22% of entrepreneurs as their key challenge. Irish entrepreneurs are struggling to compete with large multinationals that can offer higher salaries and fringe benefits in the race for top talent. Interestingly, only 6% rank graduate recruitment as their biggest challenge, favouring a more skilled workforce. We need to continue to make Ireland an attractive location for not just retaining the talent, but through targeted initiatives to attract expatriates and returning emigrants.”

The respondents experienced strong growth in 2015, with 67% of those surveyed stating that their business had grown by over 5% in the past year, creating over 17,800 new jobs. The respondents' companies employ 170,144 individuals, generating €17.4bn in revenue for the same period.

But is Ireland providing enough support in return to its entrepreneurs? Although 87% of respondents feel positive about the current economic environment, 64% still believe that there is still not sufficient support in place for those whose businesses are struggling or have failed. This marks an increase when compared to 37% last year.

Of those surveyed, 46% of the respondents said that they had had a business fail in the course of their career. However, 52% still said they would describe themselves as a ‘serial entrepreneur’.

These findings indicate that although business failure is likely to be part of the entrepreneurial journey, most entrepreneurs are willing to start afresh with a new venture, say EY. It is therefore vital for government, industry and academia to understand the specific challenges facing entrepreneurs and to collaborate to solve problems, address legislative and cultural barriers to success, and together shape the future of entrepreneurship in Ireland

High tax rates
High taxes, particularly personal income tax and capital gains tax, were listed by respondents as some of the biggest inhibitors to daily business in Ireland. Findings show that 18% of entrepreneurs would prioritise a reduction in capital gains tax, as well as equal tax and welfare rights in order to incentivise entrepreneurship and to encourage failed entrepreneurs to start again.

“The statistics show that while some positive steps have been taken, more needs to be done to incentivise entrepreneurship in Ireland," said McLoughlin. "EY recently supported a number of recommendations, as part of the Government’s consultation on tax and entrepreneurship, that if adopted would make a material difference to entrepreneurs. One of them was a clear road map outlining phased reductions in CGT rates and a 10% CGT rate on entrepreneurial gains to compete with the UK regime. This would release more equity that could then be re-invested into new business companies, perpetuating further growth and creating more employment.”

Ease of doing business
Access to finance also continues to play a role according to the survey, but this was deemed to be relatively less problematic this year with only 11% listing it as their main challenge, compared to 41% in the previous survey.

On a further positive note, 87% of entrepreneurs surveyed said they felt positive about the current economic climate for entrepreneurial business in Ireland.
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