Hiring and employment procedures for one-person-enterprises

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1 Flash Eurobarometer European Commission Hiring and employment procedures for one-person-enterprises Fieldwork: 2004 Publication: 2004 Flash Eurobarometer TNS Sofres / EOS Gallup Europe This survey was requested by the Directorate-General Enterprise and coordinated by Directorate-General Press and Communication This document does not represent the point of view of the European Commission. The interpretations and opinions contained in it are solely those of the authors.

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3 FLASH EUROBAROMETER 163 Hiring and Employment procedures for one-person-enterprises Realised by EOS Gallup Europe upon the request of the European Commission (Directorate-General Enterprise ) Survey organised and managed by Directorate-General Press and Communication (Opinion Polls, Press Reviews, Europe Direct) This document does not reflect the views of the European Commission. Any interpretations or opinions expressed in this report are those of the authors alone. SURVEY: 2004 ANALYTICAL REPORT: 2004

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5 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 1 Table of contents PRESENTATION Expanding Solo Operations Current support Short-term employees Family or friends Subcontracting Past employment contracts Future employment needs Hiring Procedures Legal administrative procedures Information sources Administrative bodies Time and effort required Initial time and effort required prior to employment Suitability of administrative procedures Employment Procedures General prohibitory factors Administrative procedures Barriers to employment On-going time and effort required during employment Tax requirements Initiatives for small companies Awareness levels CONCLUSION...43 ANNEXES Tables Technical Note Questionnaires

6 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 2 PRESENTATION Small enterprises are the driving force for innovation and job creation in Europe. Their small size makes them sensitive to changes in the industry and environment in which they operate. This is why the need to facilitate the development of small enterprises was emphasized at the European Council in Feira, Portugal on 19 and 20 June, In the field of employment, there is evidence that administrative burdens, which result from employment regulation, adversely affect the overall job creation, particularly in small firms. It is said that smaller businesses are disproportionately affected because they have limited management resources and no specialist staff to understand and meet the legal requirements 1. At the same time, SMEs are recognised to be an important generator of employment. However, if administrative burdens have a negative impact on SMEs recruitment decisions, their job creation potential cannot be fully exploited. In the European Commission s observatory of European SMEs report, administrative burdens with regard to the recruitment process are defined. Administrative burdens may, on the one hand, stem from the number and nature of administrative procedures in the recruitment process, their complexity and obscurity. Administrative procedures include obligatory contacts with authorities, form completion or delivery of the requested information to the respective authorities. On the other hand, they may result from the (frequently changing) employment legislation and its complexity and obscurity. Both aspects might pose considerable burdens on enterprises and therefore present a bottleneck for employment creation especially in small firms 2. The European Council meeting in Luxembourg in 1997 known as the Luxembourg Jobs Summit endorsed an ambitious European employment strategy. It encompasses the co-ordination of the Member States employment policies on the basis of commonly agreed Employment guidelines in the framework of the so-called Luxembourg process. The Member States have committed themselves to bring their policies into line with the objectives of these Employment Guidelines and they have started to implement the policy reforms and initiatives outlined in the National Action Plans. One explicitly announced aim is to review and simplify the administrative burdens posed on SMEs when recruiting employees 3. In view of on-going efforts since then, DG Enterprise wanted to assess how one-person-enterprises in particular perceive hiring and employment procedures. The target group (one-personenterprises) is of specific interest to DG Enterprise, as the growth of such companies often implies a need for support in the form of additional personnel. The methodology used in this survey, carried out by EOS GALLUP EUROPE, is the Directorate-General Press and Communication (Unit B/1 "Opinion polls") FLASH Eurobarometre surveys. 1 OECD, Business Views on Red Tape, Administrative and regulatory burdens on small and medium-sized enterprises, Paris, 2001, p Observatory of European SMEs No 7, Recruitment of employees: Administrative burdens on SMEs in Europe, 2002, p

7 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 3 A total of 3,929 owners or persons running one-person-enterprises were interviewed by telephone. Between 21 June and 16 July 2004, one-person-enterprises in 14 Member States (European Union Member States, except for Greece, prior to the latest enlargement) were interviewed. Between 1 and 9 September 2004, oneperson-enterprises in 5 of the new Member States (Cyprus, Czech Republic, Estonia, Lithuania and Poland) were interviewed. The sample was selected according to two criteria: country and sector of activity. In Member States with the most companies (Germany, Spain, France, Italy, the UK and Poland), approximately 300 one-personenterprises per country were interviewed. In those with the fewest companies (Ireland, Luxembourg, Finland, Cyprus and Estonia) the figure was approximately 100 each and 200 owners or persons running their business were consulted in Belgium, Denmark, the Netherlands, Austria, Portugal, Sweden, the Czech Republic and Lithuania. The person interviewed at each company was the owner or person running the enterprise. For each theme addressed, our analysis 4 looks at the: 19 Member States involved as a whole (EU-19) and each individually; company characteristics for EU-19: sector of activity: construction, industry, trade and services; age of the business (number of years that the business has been in existence or taken over by the person currently running it); turnover (turnover of the business in the last fiscal year) other characteristics for EU-19: one-person-enterprise s past experience of recruiting employees under a regular work contract (based on responses to Q2.1) A detailed description of the sample is included in the methodological note in the annex. 4 In some cases, due to the rounding of figures, displayed sums can show a difference of one point with the sum of the individual cells. Also, note that the total percentages shown in the tables of this report may exceed 100% where the respondent is allowed to give several answers to a particular question.

8 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Expanding Solo Operations 1.1. Current support In this section we will look at the current level of support owners of one-person enterprises receive. Our analysis will focus on each of the following forms of support: short-term employees, support from family or friends as well as subcontracting services. Source questionnaire: Q1a, Q1b and Q1c - Three in four one-person-enterprises receive some form of assistance in their work with most relying on informal support through family or friends compared to more formal support via short-term staff or subcontractors Short-term employees Q1a. Could you tell me if you employ staff on a short term basis? Often Sometimes Never [DK/ NA] EU 19 4% 17% 78% IE 11% 40% 49% EE 15% 31% 54% UK 11% 20% 69% FI 4% 26% 69% DE 3% 26% 72% PT 7% 16% 77% ES 4% 19% 78% PL 3% 20% 77% LU 5% 17% 78% LT 20% 78% AT 3% 18% 79% IT 3% 17% 80% DK 2% 16% 82% CY 15% 84% FR 2% 13% 84% CZ 3% 11% 86% SE 11% 89% BE NL 2% 8% 2% 8% 90% 89% 0% 20% 40% 60% 80% 100%

9 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 5 At the EU-19 level, one in five persons running their own enterprise employs staff on a short term basis: 4% do so often and 17% only sometimes. Ireland and Estonia stand out with more one-person-enterprises employing shortterm staff than in any other Member State interviewed. In Ireland, 51% employ staff on a short-term basis (11% responded often and 40% responded sometimes ) and in Estonia, 46% employ short-term personnel (15% responded often and 31% responded sometimes ). In Belgium, Sweden and the Netherlands nine in ten owners of one-personenterprises never employ short-term staff. Breakdown by company categories Q1a. Could you tell me if you employ staff on a short term basis? Often Sometimes Never [DK/ NA] EU 19 4% 17% 78% SECTOR Industry 3% 16% 81% Construction 5% 26% 68% Trade 2% 15% 82% Services 6% 17% 78% PAST RECRUITMENT EXPERIENCE Yes 7% 28% 65% No 3% 13% 83% 0% 20% 40% 60% 80% 100% Looking first at sector of activity, companies in construction stand out for the relatively high proportion of one-person-enterprises employing short-term staff. Companies which have recruited employees under a regular work contract in the past are slightly more inclined to currently employ short-term staff compared to those who have not hired full-time, permanent employees.

10 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Family or friends Family or friends correspond to the most significant source of help for one-personenterprises. At the EU-19 level, 17% often receive help at work from family or friends, 37% sometimes receive such help and 46% never receive such support. Q1b. Could you tell me if you receive help at your work from family members or friends? Often Sometimes Never [DK/ NA] EU 19 17% 37% 46% EE FI LT AT SE CZ IE DE PL LU IT UK PT NL CY DK ES BE FR 37% 25% 31% 28% 22% 23% 18% 16% 20% 12% 21% 18% 21% 10% 18% 19% 10% 9% 9% 27% 36% 48% 38% 37% 43% 41% 45% 46% 40% 45% 33% 36% 32% 43% 34% 31% 36% 31% 27% 27% 30% 35% 33% 36% 37% 38% 40% 43% 47% 46% 47% 46% 48% 51% 54% 60% 64% 0% 20% 40% 60% 80% 100% In 15 of the Member States surveyed, at least one in two one-person-enterprises receives help at work from family members or friends. Looking at the results by country, Estonia once again stands out, along with Finland, for the high level of support one-person-enterprises receive from family or friends. 73% receive such support in both countries. It seems that in France and Belgium those running their enterprise single-handedly do not rely on such support, with respectively 64% and 60% never receiving support from family or friends.

11 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 7 Breakdown by company categories Q1b. Could you tell me if you receive help at your w ork from family members or friends? Often Sometimes Never EU 19 17% 37% 46% SECTOR Industry 23% 40% 36% Construction 9% 37% 55% Trade 21% 39% 39% Services 15% 34% 51% AGE OF BUSINESS < 1year 21% 36% 43% 1-3 years 16% 33% 51% 4-5 years 17% 44% 39% > 5 years 17% 37% 46% PAST RECRUITMENT EXPERIENCE Yes 20% 38% 42% No 16% 36% 48% 0% 20% 40% 60% 80% 100% Looking first at the influence the sector of activity bears, one-person-enterprises in industry and trade are more inclined to receive support from family members or friends compared to those in other sectors. The graph above shows that one-person-enterprises which have been in existence for less than 12 months are more likely to often rely on support from family or friends than longer-established firms. Companies which have employed full-time, permanent employees in the past are slightly more inclined to currently receive help at work from family or friends.

12 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Subcontracting Q1c. Could you tell me if you subcontract or buy services from others? Often Sometimes Never [DK/ NA] EU 19 12% 27% 61% EU 14 11% 23% 65% NMS 5 13% 38% 49% EE 34% 38% 28% SE 34% 34% 32% LT 21% 34% 44% CZ 15% 36% 49% PL 10% 41% 48% FI 14% 34% 51% UK 18% 27% 53% NL 14% 27% 59% IE 12% 29% 58% BE 16% 20% 64% PT 14% 20% 65% LU 20% 13% 67% FR 8% 25% 67% ES 12% 21% 67% AT 8% 21% 69% DE 7% 20% 73% DK 9% 17% 73% IT 5% 21% 73% CY 7% 14% 79% 0% 20% 40% 60% 80% 100% At the EU-19 level, 38% of one-person-enterprises subcontract or purchase services from others; 12% do so often and 27% do so sometimes. 61% never turn to serviceproviders. For this particular question, it is worth noting the schism between the 14 old Member States and the 5 new Member States surveyed (EU-14: 35% respond often or sometimes ; NMS-5: 51% respond often or sometimes ). In the graph above, we can see that here also Estonia stands out together with Sweden with respectively 72% and 68% of one-person-enterprises indicating that they subcontract or purchase services from others. In Sweden, responses are equally split between often and sometimes and more or less the same can be said for Estonia. On the contrary, Cyprus (79%) stands out for the proportion of one-personenterprises who never subcontract or buy services from others.

13 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 9 Breakdown by company categories Q1c. Could you tell me if you subcontract or buy services from others? Often Sometimes Never [DK/ NA] EU 19 12% 27% 61% SECTOR Industry 17% 32% 50% Construction 16% 39% 44% Trade 9% 20% 71% Services 11% 26% 62% TURNOVER <= euros 9% 27% 64% % 32% 56% % 30% 47% > Euros 20% 34% 46% PAST RECRUITMENT EXPERIENCE Yes 14% 30% 56% No 11% 25% 64% 0% 20% 40% 60% 80% 100% Looking first at sector of activity, as we might expect, enterprises in construction stand out for the high proportion of one-person-enterprises which either subcontract or buy services from others. Turnover seems to be a significant indicator of whether or not one-person-enterprises subcontract or purchase services. There is an increasing relationship between turnover and sub-contracting or purchasing services whereby the greater the turnover, the more likely the one-person-enterprise is to engage the activities of service-providers. We could presume that a higher level of turnover implies that the workload is greater and hence the need for assistance. This however, is coupled with the presumption that these enterprises are better placed to finance such needs. One-person-enterprises which have recruited employees in the past are more likely to subcontract or buy services from others. Before concluding this section, it is worth noting that three in four one-personenterprises receive some form of assistance in their work with most relying on informal support through family or friends compared to more formal support via short-term staff or subcontractors. Consequently, there is a potential for recruitment of employees in the future thereby confirming the need to assess the associated procedures.

14 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Past employment contracts This question serves as a means of distinguishing between first-time recruiters and firms which have already experienced this. In the graph below, we have regrouped yes, several times and yes, once responses. Source questionnaire: Q2.1-28% of one-person-enterprises have past experience of recruiting full-time, permanent staff - Q2.1 In the past, did you ever recruit for your business one or more employees under a regular (i.e. normal, ordinary) work contract? Yes No [DK/ NA] EU 19 28% 72% EU 14 25% 75% NMS 5 37% 63% PL 50% 50% DK 40% 59% EE 38% 61% ES 34% 66% IE 34% 66% DE 31% 69% BE 30% 70% CY LT AT IT CZ LU PT UK FR NL FI SE 12% 8% 5% 3% 29% 29% 28% 26% 26% 25% 25% 24% 88% 92% 95% 97% 71% 71% 71% 74% 74% 75% 75% 75% 0% 20% 40% 60% 80% 100% At the EU-19 level, 28% of one-person-enterprises have, in the past, recruited one or more employees under a regular work contract. There is a significant difference between the past recruitment experiences of the 14 old Member States (25%) and the 5 new Member States (37%). Looking at the country breakdown of results, the graph above shows that Poland is where most one-person-enterprises have recruited employees under a regular contract, being the case of one in two firms.

15 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 11 In contrast, Sweden, Finland and the Netherlands can be distinguished for the particularly high proportions of one-person-enterprises, respectively 97%, 95% and 92%, which have never recruited employees under a regular contract. In parallel, in Sweden and the Netherlands, we previously noted that in both countries few oneperson-enterprises employ short-term staff. While Finland ranks highest for the proportion of one-person-enterprises which receive help from family or friends. Breakdown by company categories Looking first at sector, persons running enterprises in industry are more inclined to recruit employees under a regular work contract compared to businesses in other sectors of activity. As we might expect, there is an increasing relationship between the number of years since the business has been established and past experience of recruiting employees under a regular contract: enterprises which have been in existence for more than five years are more likely to have past experience of this than more recently established firms. Q2.1 In the past, did you ever recruit for your business one or more employees under a regular (i.e. normal, ordinary) work contract? Yes No EU 19 SECTOR Industry Construction Trade Services AGE OF BUSINESS < 1year 28% 36% 29% 26% 27% 3% 97% 72% 64% 71% 74% 73% 1-3 years 4-5 years 10% 19% 90% 81% > 5 years 34% 66% 0% 20% 40% 60% 80% 100%

16 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Future employment needs Source questionnaire: Q On average, 15% of one-person-enterprises would need to recruit additional employees within the next six months - Q2.2 Considering the current situation of your business, do you think that you would need to recruit one or more employees in the next six months? Yes No [DK/ NA] EU 19 15% 83% CY 22% 78% LT ES 20% 19% 78% 80% 2% IT 19% 81% UK 19% 80% EE 19% 79% PL 19% 76% IE 18% 82% LU 17% 80% 3% DK 16% 83% FR 14% 84% 2% FI SE 14% 11% 86% 88% 1% CZ 11% 86% PT 7% 93% DE 6% 94% NL 4% 96% BE 3% 95% 2% AT 3% 95% 1% 0% 20% 40% 60% 80% 100% At the EU-19 level, 15% of one-person-enterprises believe that that they would need to recruit one or more employees in the next six months. In most Member States, less than one in five owners of one-person-enterprises believes that it would be necessary to recruit additional employees within the next six months.

17 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 13 In Cyprus and Lithuania, growth opportunities are most promising with respectively, 22% and 20% confirming their belief that they would need to recruit employees within the coming six months. Looking now at enterprises which do not anticipate a need to recruit additional employees in the next six months, the Netherlands (96%), Belgium and Austria (both 95%) rank highest.

18 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 14 Breakdown by company categories Q2.2 Considering the current situation of your business, do you think that you would need to recruit one or more employees in the next six months? Yes No [DK/ NA] EU 19 SECTOR Industry Construction Trade Services AGE OF BUSINESS < 1year 1-3 years 4-5 years > 5 years TURNOVER <= euros > Euros PAST RECRUITMENT EXPERIENCE Yes No 15% 14% 21% 14% 14% 32% 21% 20% 13% 13% 18% 19% 27% 19% 14% 83% 84% 76% 85% 84% 64% 78% 78% 86% 86% 81% 80% 73% 78% 85% 0% 20% 40% 60% 80% 100% Looking first at sector of activity, construction once again stands out for the relatively higher proportion of one-person-enterprises confirming their short-term recruitment needs. Note that this sector stood out previously for their tendency to currently employ short-term staff. This would suggest that employment opportunities in construction are inclined to be greater than in other industry categories. Owners of recently established firms (less than 12 months) seem to be more optimistic about expansion in the short-term. One-person-enterprises with a turnover of more than 250,000 euros are more inclined to anticipate the need for recruitment in the next six months. As mentioned earlier, a higher level of turnover would lead us to believe that this category of enterprise is better placed to finance its recruitment needs. One-person-enterprises which have employed full-time, permanent employees in the past are more inclined to confirm their need to recruit within the coming six months.

19 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Hiring Procedures In this section the nature of hiring procedures as viewed by one-person-enterprises is explored. We will analyse preferred information sources, opinions on the number of obligatory institutions which should be contacted, the time required to gather all of the required information and fulfil procedures before turning to perceptions of the suitability of administrative procedures to hiring Legal administrative procedures Information sources Source questionnaire: Q8 - One in two one-person-enterprises would prefer to turn to accountants or legal or financial advisors for information on hiring procedures - Q8. Suppose that you want to hire somebody. In your opinion, where do you think you could best obtain the necessary information regarding procedures and your duties? - EU 19 Your accountant, your legal or financial advisor or a similar person 50% Chamber of Commerce or Professional Association 25% Family or friends 16% The Local Authorities 11% The National Authorities 10% Banks 2% [OTHER] 7% [DK/NA] 8% 0% 20% 40% 60% 80% 100% At the EU-19 level, the graph above shows that one in two owners of one-personenterprises would rather turn to their accountant, legal or financial advisor or a similar person. Following next, we see that one in four would prefer to turn to a chamber of commerce or professional association for such information.

20 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 16 The table below shows the country breakdown of preferred information sources. Your accountant, your legal or financial advisor or a similar person Chamber of Commerce or Professional Association Family or friends The Local Authorities The National Authorities Banks [OTHER] [DK/NA] EU 19 50% 25% 16% 11% 10% 2% 7% 8% EU 14 53% 31% 15% 11% 8% 2% 6% 7% NMS 5 40% 6% 18% 8% 17% 0% 8% 10% IT 78% 17% 7% 2% 1% 0% 1% 4% FI 70% 23% 13% 37% 11% 2% 19% 1% FR 57% 67% 10% 9% 12% 1% 5% 1% LU 57% 57% 11% 9% 18% 1% 9% 2% BE 56% 50% 8% 11% 7% 4% 19% 6% IE 54% 10% 38% 20% 21% 2% 9% 5% DE 53% 43% 20% 11% 17% 2% 11% 5% NL 49% 45% 3% 4% 4% 1% 4% 13% PL 49% 10% 18% 6% 21% 0% 3% 7% AT 48% 54% 12% 19% 11% 2% 6% 7% ES 43% 17% 19% 6% 4% 1% 4% 9% EE 43% 0% 42% 15% 21% 0% 19% 6% DK 42% 22% 8% 18% 8% 3% 13% 9% PT 42% 24% 18% 5% 12% 1% 7% 10% SE 37% 15% 19% 41% 10% 1% 4% 3% UK 34% 24% 22% 23% 10% 6% 8% 12% CZ 33% 3% 17% 9% 14% 0% 12% 12% LT 28% 4% 28% 22% 11% 0% 8% 10% CY 10% 6% 35% 1% 18% 0% 9% 25% For most Member States surveyed, a majority or at least a relative majority would rather look to accountants or legal or financial advisors for information on hiring procedures. The average result for the choice of accountants or legal or financial advisors masks considerable differences across the Member States surveyed. In Italy, a staggering 78% of one-person-enterprises would turn to these professionals for information on procedures and duties with regard to hiring. Also, this source would be the preference for the vast majority of Finnish one-person-enterprises, being cited by 70% of those interviewed. In France and Austria, a majority would opt for a chamber of commerce or professional association for such information, with respective results of 67% and 54% here. In Sweden, a relative majority of one-person-enterprises (41%) would rather refer to local authorities for such information. In Cyprus, a relative majority (35%) would choose family or friends. Owners of one-person-enterprises in Luxembourg are equally split between accountants or legal or financial advisors and a chamber of commerce or professional association (57% for each) as a source of information on hiring procedures. One-person-enterprises in Lithuania are equally split between accountants or legal or financial advisors and family or friends.

21 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 17 Breakdown by company categories Your accountant, your legal or financial advisor or a similar person Chamber of Commerce or Professional Association Family or friends The Local Authorities The National Authorities Banks [OTHER] [DK/NA] EU 19 50% 25% 16% 11% 10% 2% 7% 8% Sector Industry 51% 19% 15% 9% 15% 1% 8% 6% Construction 45% 24% 19% 11% 12% 2% 8% 9% Trade 55% 24% 16% 9% 8% 2% 5% 8% Services 48% 29% 14% 12% 10% 2% 7% 7% Age of business < 1year 56% 30% 18% 18% 11% 2% 5% 2% 1-3 years 57% 38% 14% 10% 10% 2% 5% 4% 4-5 years 57% 31% 13% 10% 6% 2% 8% 5% > 5 years 47% 22% 16% 10% 11% 2% 7% 9% Turnover <= euros 42% 24% 18% 13% 12% 2% 6% 7% % 29% 13% 8% 12% 1% 9% 4% % 37% 15% 11% 12% 4% 5% 5% > euros 62% 18% 18% 12% 11% 1% 8% 6% Past recruitment experience Yes 50% 22% 16% 6% 9% 1% 8% 9% No 50% 27% 16% 12% 11% 2% 6% 7% We will first look at the company category influence on the choice of accountant, legal or financial advisor. With regard to sector, it seems that one-person-enterprises in trade are more likely to turn to this source compared to enterprises in other sectors of activity. Companies with a turnover of more than 250,000 euros are more inclined to turn to an accountant or a legal or financial advisor for information on hiring procedures than companies with a lower turnover. Turning now to Chambers of Commerce, it seems that one-person-enterprises in the services sector, firms which have been established for between 1 and 3 years, and/or firms with a turnover of between 100,000 and 250,000 euro are more inclined to opt for this source of information when it comes to hiring. One-person-enterprises which have been established for less than 12 months are more likely to turn to local authorities compared to longer established firms. When it comes to national authorities, in the sector of activity category, firms in industry would tend to refer to this source for information on hiring.

22 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p Administrative bodies Source questionnaire: Q5 When recruiting an employee, enterprises are obliged to contact various institutions. In this section we will look at the number of institutions one-person-enterprises believe that they would need to deal with before employing their chosen candidate. - Some uncertainty regarding the number of institutions that one-person-enterprises need to deal with before employing their chosen candidate - Q5. Suppose you want to hire somebody. How many different institutions (agencies, government bodies etc) do you think you would have to deal with before you could actually employ this person? - EU % 1 20% 2 15% 3 or more 23% [DK/ NA] 31% 0% 10% 20% 30% 40% The type of institutions that one-person-enterprises would potentially need to deal with in this context includes the social insurance office, tax authority, employment office, accident insurance, pension scheme etc. The average result for EU-19 shows that 31% of one-person-enterprises do not know how many different institutions they would have to deal with before they could actually employ their chosen candidate. 11% optimistically believe that they would not have to deal with any institution. 20% consider that they would need to deal with a unique institution and 23% believe that they would have to deal with three or more institutions before employing their chosen person. The number of obligatory institutions that one-person-enterprises would need to contact when recruiting an employee varies from one Member State to the next. In the European Commission s observatory of European SMEs 5 the number of institutions to be contacted when recruiting the first employee for the 14 Member 5 Observatory of European SMEs No 7, Recruitment of employees: Administrative burdens on SMEs in Europe, 2002, p. 24

23 EOS Gallup Europe Flash EB 163 Hiring and employment procedures for one-person-enterprises - Report p. 19 States is detailed. Looking at this group of countries, the number of institutions varies from 1 in Ireland, Austria and Sweden to 5 in Belgium. In the case of Ireland, Austria and Sweden, less than one in five are aware that they would need to deal with a unique institution when recruiting their chosen candidate. The graph below shows the proportion of company owners who believe that they would have to deal with 3 or more institutions before they could employ somebody. It is worth noting the schism here between the 14 old Member States (17%) and the 5 new Member States (41%). Q5. Suppose you want to hire somebody. How many different institutions (agencies, government bodies etc) do you think you would have to deal with before you could actually employ this person? Re sponse : 3 or m ore EU 19 EU 14 17% 23% NMS 5 41% PL CZ DE FI FR AT LT NL BE SE LU IE DK ES 43% 42% 38% 33% 31% 30% 29% 26% 26% 20% 15% 14% 12% 11% UK 10% EE 7% PT 6% IT 5% CY 1% 0% 20% 40% 60%

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