Multiple pressures making it difficult for small businesses in Mayo

Mayo is enjoying full employment levels but local businesses and start-ups are facing significant pressure from a whole range of costly expenses, a meeting of the Economic and Enterprise SPC heard last week.

Outlining a series of challenges facing employers, Head of Mayo Local Enterprise Office, John Magee, told the forum that was the LEO was hearing on a day-to-day basis was about rising costs, not just in terms of funding employment, but also on such things as auto-enrolment (My Future Fund pension scheme.

“Frankly, it’s putting pressure on businesses. Labour costs, autoenrollment, while it is wonderful for employees with rising wages, these are very real pressures,” said Mr Magee.

Delays in the supply chain are another issue he said, noting that for manufacturing companies it can now take six months to get a machine delivered where it would have taken six weeks before. Labour shortages are also problematic he said.

“In Mayo we are at full employment, which in itself is historic, but businesses are also telling us they are down a person, which may be either because someone retired or took a different route. This has quite an impact on small businesses with people telling us they simply can’t find the staff they need.” 

Employee expectations also pose difficulties, he said, whether this be from recruits with working from home, quality of life and work-life balance demands.

“Today’s generation is much more in tune to get this and are asking for it from their employer, but for many parts of the economy we know that working from home does not work. But still they are having these conversations on a daily basis.” 

John Magee also said the issue around access to finance never goes away.

“We are hearing constantly of ever-present tensions with banks while credit unions are now talking about start-ups coming to them to seek finance rather than from traditional institutions.” 

Cost pressure increases and delivery dependency are additionally challenging in light of recent increases in fuel prices while availability of serviced commercial spaces for businesses seeking to scale up is stalling progress.

“We have heard this from businesses in Crossmolina, in Ballina, in Castlebar, literally the length and breadth of the country for a business to scale up, it is a major issue.” 

Should an international company look to set up in Mayo, Magee added: “There are economic constraints, because they want to know about talent and then housing, and when there is a shortage in housing, that limits the ability to attract.” 

As to developments in artificial intelligence, he said: “We are wary of AI and the potential of it and are concerned about it. There has been a lot of noise about it but we find the best thing is to cut through the noise and find something practical to use AI to do. This is not to replace staff but maybe to use it to produce a content creation piece for social media, rather than paying another company to do it.” 

Acknowledging the work of Mayo LEO, Cllr Paul McNamara said: “A lot of small businesses would not have had the ability to get off the ground without the support of Mayo LEO staff.” However, he warned that small businesses in Mayo are under serious threat, stating that the “elephant in the room” could not be ignored.

“For small businesses and a lot of businesses, we are in the eye of a storm. It is a perfect storm and if it keeps going, we will see at least 50% of our small businesses wiped out. Government is allowing this to happen and is not stepping up to the table in a time of need.

“Nobody knew how events would turn in the world over the last three months but I really fear now for small business as none of them will sustain the constant price increases and I would be very fearful of where the backbone of our economy is going to be in September. We are going to see the decimation of our small businesses if government doesn’t intervene.”