Discussing SMEs with Mr Petri Salminen, President of SMEUnited
Following the pandemic, companies are still struggling to regain momentum. The main obstacles for the hospitality sector now are the energy crisis, shortages in labour forces and inflation. In your opinion, what are the major issues for SMEs today? What are your proposals to help them go through those hurdles?
Recovering from the pandemic, small companies were confronted with disruption of supply chains and surging commodity and energy prices. The invasion of Ukraine by Russia steered our continent in a full energy crisis. SMEunited surveyed its Members on how national governments are mitigating the energy crisis. The results show that most measures are aimed at customers and bigger companies. There are many measures that small and medium-sized companies can also benefit from, but there are hardly any measures specifically targeting them.
Our national members put forward several recommendations as to what they believe could alleviate the situation of SMEs at the local level. Amongst others they propose: capping the price of gas, decoupling gas from electricity, supporting investment in renewable energy, reducing tariffs for SMEs, reforming electricity market rules, developing fairer pricing mechanisms, providing targeted temporary aid or at least partial compensation for energy costs to SMEs most affected and providing low-interest rate loans.
At European level, we are working with the European Institutions to provide the framework for targeted measures. This includes the extended and prolonged temporary State Aid crisis framework for SMEs as well as the price cap for inframarginal electricity producers and the solidarity contribution of fossil fuel companies with extra profits. Furthermore, the new regulation on emergency interventions allows energy price caps in the retail market for SMEs.
SMEs also face difficulties in recruiting qualified staff and experience growing labour and skills mismatches and gaps. This structural problem stems from a combination of factors: an ageing population, insufficient anticipation of skills needs, inadequate adaptation of curricula to new labour market needs and reduced mobility in the EU. Closer cooperation between education and training providers with social partners and SME organisations, as well as other relevant stakeholders, is urgently needed to timely adapt curricula.
Work-based learning and apprenticeship as well as upskilling and reskilling of adults are essential to manage the digital and green transition. Equally required are active labour market policies with targeted support for inactive people and unemployed workers to reintegrate into the labour market. All these initiatives should go hand in hand with economic legal migration. The EU Commission proposed the launch of the EU Talent Pool from mid-2023, an EU-wide platform and matching tool. In October, the Commission already put in place a Pilot Talent Pool to integrate Ukrainian refugees into national labour markets. We warmly welcome the Pilot Talent Pool and the future initiative to match third-country nationals’ job applications with the needs of European employers.
In October 2022, the European Commission presented its Work Programme for 2023. What do you think about the special support policies and initiatives the Commission is proposing? Could it be improved and how?
SMEunited appreciated the tribute to SMEs by Commission President von der Leyen at her State of the Union speech. She acknowledged that small companies always put their employees first, even and especially in times of crisis and announced an SME relief package to reply to the needs of SMEs. We welcome this package, in particular the promise to review the Late Payment Directive. It is a big success of SMEunited’s lobby work. Finally, it is recognized that it is not fair that 1 in 4 bankruptcies are due to invoices not being paid on time.
However, these ambitious promises are not completely matched by the EC Commission Work Program. Even though we still have to discuss the initiatives in detail with our members, it is clear that the Work Program contains less concrete measures to relieve burdens for SMEs than we had hoped for…
On the other hand, the Commission already launched many initiatives in this mandate which will impact SMEs. To soften the regulatory burden, SMEs call to mitigate adjustment costs and reduce administrative burdens by removing or postponing reporting requirements and other administrative requests, e.g. in the Equal Pay and Pay Transparency Directive, sustainability reporting and due diligence.
Since SMEs are the main drivers of the green transition, we support the European Commission’s attention in their Work Program concerning food waste issues and sustainable food systems.
SMEunited was involved from the start in helping to elaborate an SME-friendly, accurate food waste measuring system, which resulted in the new baseline numbers published by the Commission in October. Considering that, per capita, food waste caused by consumers is on average 70 kg per year, compared to only 12 kg in restaurants and food services, we can see that the main driver to reduce food waste is by informing consumers; if we want to reach a reduction of food waste by 50% by 2030. However, SMEs are ready and able to do their part, and we are glad – together with HotRec – to implement measures and inform about best practices to further reduce food waste, without increasing the bureaucratic burden for our entrepreneurs. After all, every entrepreneur knows: Food waste is not only an ecological problem, it is also money lost for your business!
Apart from food waste, our members are also committed to reduce packaging waste. SMEs traditionally use very little packaging. Most of our enterprises use just the right amount of packaging to make sure that the product gets to the consumer, guaranteeing food safety and quality. With the upcoming Revision of the Packaging and Packaging Waste legislation, the Commission would like to go a step further, and introduce harmonised rules on the use of reusable containers for food and drink items. We as SMEunited see this with concern: while our entrepreneurs can fully control how their containers and wrapping materials are stored and cleaned, this is impossible to do with reusable containers brought in by consumers. The Commission should therefore be careful not to create a great risk for retailers, restaurants and other food service providers for which our members cannot find a feasible solution.
I am positive that, through dialogue with the EU institutions, we will be able to find such solutions, and drive the green transition forward to a successful future – proving that sustainability and profitability do not exclude each other, but are two sides of the same coin: You cannot have one without the other.
99% of companies in the hospitality sector are SMEs (90% of them being micro-enterprises). They are facing the same challenges in their path towards a more green, digital, and resilient future than any other SMEs. Do you have a concrete message you would like to share with our members?
SMEs adapt continuously to the changing environment. However, they are more and more concerned by increasing regulatory burdens, such as reporting on sustainability and due diligence, as well as regulatory costs, for instance due to new, greener manufacturing practices such as the life cycle analysis. Therefore, as entrepreneurs, we ask to make predictable what can be made predictable, the rules of the game. It is therefore more important than ever that we make our voices heard and shape Europe for SMEs!