SMEs led by women faring worse in Ireland - report

Women-led SMEs in Ireland are faring significantly worse than their global counterparts in terms of closures, sales performances, and increasing headcounts as efforts to recover from the Covid-19 pandemic gather pace, a new report by Facebook shows.

The platform’s State of Small Business report, which is based on July this year, captures the responses of 35,000 SME leaders across 30 countries, including more than 305 respondents in Ireland. The previous report was carried out in February.

The report suggests women-led SMEs globally are faring worse in terms of the recovery than their male-led counterparts, but Ireland is performing particularly poorly in a number of metrics relative even to global averages.

Approximately 20 per cent of women-led SMEs were closed within the global sample, which was four percentage points higher than among SMEs led by men, although lower than the six percentage point gap observed earlier in 2021.

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The disparity between small and medium businesses led by men and women was more mixed in Europe: Ireland and Britain were among the worst on the continent, with women-led SMEs 10 percentage points more likely to report closures than their men-led counterparts.

There were little to no reported differences in rates of closure in Belgium, France, Germany, Italy, Portugal and Russia.

Sales performance

Globally, the proportion of SMEs that improved their sales performance in the previous 30 days compared to the same period last year was the same for both women- and men-led SMEs at 28 per cent.

However, Ireland was again named among a number of countries where women-led SMEs were more than 10 percentage points less likely to have increased sales. These were Ghana (16 per cent), Portugal (12 per cent), France (11 per cent) and Ireland (11 per cent).

This trend was not universal, and in some countries was reversed. Women-led SMEs in the UK, Israel, Canada and Argentina were all more likely to report increasing sales performances.

On jobs, women-led SMEs globally were four percentage points less likely to have reduced headcounts as a result of the Covid-19 pandemic than men-led SMEs, but were also three percentage points less likely to have increased employment.

However, the picture was again bleaker in Ireland where women-led SMEs were more than 10 percentage points less likely to have increased employment. The same was true of Germany and Russia.

Recovery

More generally, the report suggested there are signs that businesses are recovering from the crisis.

Six out of 10 operational SMEs reported they would be able to continue operating for six months or more if current circumstances persist. Ireland fared slightly better at 64 per cent.

About 13 per cent of SMEs said they would increase temporary employment over the next six months in anticipation of the Christmas season.

This was higher in some countries with about one-fifth of SMEs in Taiwan (21 per cent), Poland (18 per cent) and Ireland (18 per cent) stating they would increase temporary employment.

North America and Europe saw the greatest increase in the proportion of SMEs reporting improved year-on-year sales performance. The same trend could also be observed in Europe and Latin America, with 15 and 14 percentage point improvements respectively since February.

SMEs in Ireland reported the largest improvement within these regions, with a 27 percentage point increase in the proportion of SMEs reporting higher year-on-year sales.

More SMEs reported increased sales than decreased sales relative to the same month in the previous year in Ireland, Nigeria and the US, the only countries to report this trend.