THE COSTS of labour is the biggest concern among small businesses in Ireland in spite of almost half of them having already cut their total pay bills, a survey from the Small Firms Association (SFA) has found.

The SFA poll on pay and conditions found that 48 per cent of small businesses here reduced their labour costs last year. The average cut was 19.74 per cent.

Another 33 per cent are maintaining their pay costs at the same level. “It is clear that labour cost competitiveness will continue to be a top priority for small businesses in 2010,” SFA director Patricia Callan said.

Ms Callan said one-quarter of respondents expect to decrease their total pay bill this year. The average decrease is expected to be of 13.82 per cent.

Another 47 per cent said their labour costs would be maintained at existing levels.

Almost one in five of the company’s polled said they expect to reduce their employee numbers, with 56 per cent maintaining them at existing levels.

“Jobs must now become our top priority – both the maintenance of existing ones and the creation of new ones,” Ms Callan added.

“Pay moderation must become the norm, as small businesses, who employ half the private sector workforce, struggle to regain cost-competitiveness and thus ensure their business survival.”

The survey found that only 15 per cent of workers employed by small businesses earned more than €45,000.