Staff shortages are the most pressing issue small business owners currently face and the problem is impacting their day-to-day operations, a new survey has found.
The findings were revealed in the quarterly SME barometer, published on Wednesday by the Chamber of SMEs. The barometer surveyed 432 small business owners on their opportunities and challenges and is carried out in collaboration with Misco.
Almost half of all respondents (43%) said employee shortages were the most pressing issue their business is currently facing.
This was followed by unfair competition at 22% and traffic congestion at 18%.
According to the survey, staff shortages have become gradually more pressing for SMEs throughout 2024, with the number reaching a peak in Q2 and falling to roughly on par with Q1 again in the third quarter.
Back in Q4 in 2023, inflation was the uppermost pressing issue on SME owners' minds.
What is hindering day-to-day operations?
When asked what issue is most hindering their day-to-day operation as a business, staff shortages again ranked as the top issue (28%).
This was followed by traffic congestion at 16%, cashflow at 12% and low client demand at 11%.
What is hindering SME growth?
A lack of staff was also the second-most (18.5%) cited reason when asked what is hindering their company’s growth as a business. The biggest stumbling block to growth, according to business owners, was high operational costs, which was cited by 21% of respondents.
Some 16% said that unfair competition was hindering their growth, while 8.5% said they had no interest in growing at all.
What skills do workers lack?
When asked to elaborate on what skills they feel are sorely lacking from their workforce, 21% said they found technical skills to be most lacking in their staff complement, followed by adaptability and flexibility (16%) and critical thinking (13.5%)
Other qualities small business owners said they found lacking among staff are problem-solving (11%), leadership (9%), communication (8%), self-organisation (9%) as well as digital literacy and customer care (5.5%).
Elaborating on the results, the Chamber’s chief operations officer Andrew Aquilina said companies are struggling to meet their human resources needs as it has become more difficult to employ third-country nationals.
He also said that many felt that they operate on an unequal footing to foreign businesses in Malta, because these enjoy a more favourable corporate tax rate of 5%.
80% think Malta going in wrong direction
When asked what are the two most important issues in the country that they would like to see the government tackling seriously, SMEs first named a lack of good governance (41%), followed closely by overpopulation (39%) and the level of corruption (32%).
When asked if they think the country is going in the wrong or right direction, 80% of respondents said that they believe the country is going in the wrong direction, a figure that has climbed from 72% in Q4 of 2023.
The inverse can also be seen in respondents who think the country is going in the right direction, with the figure sitting at 20%, down from 28% in Q3 2023.
Chamber of SMEs President Paul Abela said that the government must focus on building a more positive business sentiment and urged the implementation of the 2022 election promise to reduce the corporate tax rate from 35% to 25%.
The Chamber is also calling on the government to develop comprehensive strategies to address overpopulation, which is being perceived as a growing concern among small businesses, Abela said.
This must include initiatives that focus on urban planning, investment in infrastructure and a roadmap to sustainable and balanced demographic growth.