<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 17, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>SMEs put own spin on jobs credit scheme
Some use it to boost cash position, survey finds; many worry about plunging demand
By CHEN HUIFEN
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(SINGAPORE) The Republic's small and medium enterprises find the Jobs Credit Scheme handy - though not quite for the reasons that it was intended. Many SMEs said that they intended to use the scheme - aimed at preserving jobs - to improve their net cash position or to beef up their staff remuneration, according to the latest SME Development Survey.
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</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>While acknowledging that the Jobs Credit scheme may not have been crafted for those purposes, DP Information Group managing director Chen Yew Nah does not regard those intentions as wrong either.
'Improving cash position is also not an overly wrong thing,' she told BT. 'That means they are willing to keep it to weather the future.
'Today you may see an economic revival, but my personal opinion is that, although there is a turning point . . . the question is, how fast can you get back? And the likely outlook for most people is that, because the drop has been so drastic, even ploughing back the 20 per cent or 40 per cent of loss of sales is not going to take just one year.'
The finding was culled from a study of more than 2,000 SMEs between April and June this year.
In one part of the questionnaire on Jobs Credit, 62 per cent of those polled said that they would use it to offset operating costs, 26.7 per cent said that they would use it to increase their current cash position and 12.5 per cent would pass it on to employees, either as a one-off bonus or a moderate increment to wages. Another 22 per cent were undecided. Respondents were allowed more than one option.
The survey also highlighted the impact that the global financial crisis has had on SMEs here, which largely reported very different set of concerns from previous years' surveys. Sales-related issues had trumped financing as a top challenge.
About 58.3 per cent expect demand for their products and services to fall, with 29.1 per cent saying that the drop could be more than 20 per cent.
The proportion of SMEs enjoying accelerated growth also plunged to 9 per cent, from 29 per cent last year. On the other hand, 20 per cent of the respondents are in a state of decline, up from 7 per cent last year.
'The recent web of the whole recession impact is not trivial,' said Ms Chen. 'So there are some SMEs that really do need to have a shift in competence, the ability to engage their customers.
'Some customers may really be gone. The question then is, how can Spring or some of the government agencies . . . cater to some of these very pertinent issues about helping SMEs to better appreciate and look forward, plan and understand where they are, how do they go, and so forth. Sharing of experience by industry leaders would also help.'
However, firms have continued to expand overseas, with 69 per cent of them having turnover from abroad up from 64 per cent last year. The collection of accounts receivable from overseas became a new concern this year, with 26 per cent experiencing that problem.
Forty-nine per cent reported that they are concerned about the uncertain overseas economic environment, higher than the 22 per cent who said so a year ago. For those that have yet to have any operations in a foreign land, the proportion of them planning to do so has shrunk to 2 per cent, from 7 per cent last year.
The silver lining seems to be the optimism displayed by the SMEs here. About 78 per cent said that they are confident of weathering the downturn, even if it carries on for two years. About 52 per cent have a sustenance plan.
Of the remaining 48 per cent that do not, 28 per cent are confident that conditions will improve, while 20 per cent are unsure about coming up with a sustenance plan.
<HR width="50%">
JOBS CREDIT SCHEME
62 per cent will use it to offset operating costs, 27 per cent to improve cash position and 12.5 per cent will pass it on to staff
MAIN CHALLENGE
58 per cent expect demand for their goods/services to fall LOOKING OVERSEAS 69 per cent have turnover from abroad but 26 per cent worry about collecting accounts receivable from there
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>SMEs put own spin on jobs credit scheme
Some use it to boost cash position, survey finds; many worry about plunging demand
By CHEN HUIFEN
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The Republic's small and medium enterprises find the Jobs Credit Scheme handy - though not quite for the reasons that it was intended. Many SMEs said that they intended to use the scheme - aimed at preserving jobs - to improve their net cash position or to beef up their staff remuneration, according to the latest SME Development Survey.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>While acknowledging that the Jobs Credit scheme may not have been crafted for those purposes, DP Information Group managing director Chen Yew Nah does not regard those intentions as wrong either.'Improving cash position is also not an overly wrong thing,' she told BT. 'That means they are willing to keep it to weather the future.
'Today you may see an economic revival, but my personal opinion is that, although there is a turning point . . . the question is, how fast can you get back? And the likely outlook for most people is that, because the drop has been so drastic, even ploughing back the 20 per cent or 40 per cent of loss of sales is not going to take just one year.'
The finding was culled from a study of more than 2,000 SMEs between April and June this year.
In one part of the questionnaire on Jobs Credit, 62 per cent of those polled said that they would use it to offset operating costs, 26.7 per cent said that they would use it to increase their current cash position and 12.5 per cent would pass it on to employees, either as a one-off bonus or a moderate increment to wages. Another 22 per cent were undecided. Respondents were allowed more than one option.
The survey also highlighted the impact that the global financial crisis has had on SMEs here, which largely reported very different set of concerns from previous years' surveys. Sales-related issues had trumped financing as a top challenge.
About 58.3 per cent expect demand for their products and services to fall, with 29.1 per cent saying that the drop could be more than 20 per cent.
The proportion of SMEs enjoying accelerated growth also plunged to 9 per cent, from 29 per cent last year. On the other hand, 20 per cent of the respondents are in a state of decline, up from 7 per cent last year.
'The recent web of the whole recession impact is not trivial,' said Ms Chen. 'So there are some SMEs that really do need to have a shift in competence, the ability to engage their customers.
'Some customers may really be gone. The question then is, how can Spring or some of the government agencies . . . cater to some of these very pertinent issues about helping SMEs to better appreciate and look forward, plan and understand where they are, how do they go, and so forth. Sharing of experience by industry leaders would also help.'
However, firms have continued to expand overseas, with 69 per cent of them having turnover from abroad up from 64 per cent last year. The collection of accounts receivable from overseas became a new concern this year, with 26 per cent experiencing that problem.
Forty-nine per cent reported that they are concerned about the uncertain overseas economic environment, higher than the 22 per cent who said so a year ago. For those that have yet to have any operations in a foreign land, the proportion of them planning to do so has shrunk to 2 per cent, from 7 per cent last year.
The silver lining seems to be the optimism displayed by the SMEs here. About 78 per cent said that they are confident of weathering the downturn, even if it carries on for two years. About 52 per cent have a sustenance plan.
Of the remaining 48 per cent that do not, 28 per cent are confident that conditions will improve, while 20 per cent are unsure about coming up with a sustenance plan.
<HR width="50%">
JOBS CREDIT SCHEME
62 per cent will use it to offset operating costs, 27 per cent to improve cash position and 12.5 per cent will pass it on to staff
MAIN CHALLENGE
58 per cent expect demand for their goods/services to fall LOOKING OVERSEAS 69 per cent have turnover from abroad but 26 per cent worry about collecting accounts receivable from there
</TD></TR></TBODY></TABLE>
