According to the January report, despite the harsh economic conditions facing small businesses, it is still a candidate-driven market with more job postings but fewer qualified candidates.
The report suggests this could be driving up wages in key industries requiring specialised skill sets, such as construction and trade services and healthcare and community services, where the median wages grew by 8.6 per cent and 7.4 per cent, respectively, year-on-year.
“With insufficient supply in the market, this is a concern for SMEs unable to keep up with talent market conditions,” said Employment Hero chief executive Brett Thompson.
“As wages start to rise again, this is a big alert that we’re not out of the woods and Australia could be in the middle of an upwards wage-price spiral.
“If we only look at the ABS’ Wage Price Index base data, we’re making decisions on incomplete data, and we’ll continue to see rate hikes from the RBA until we get this under control.”
The latest SME Index revealed that open roles in businesses jumped in January and the SME growth rate (which measures the average number of employees at an SME business) increased slightly from the previous month by 0.1 per cent.
The Employment Hero SME Index is 121.5 points in January 2023 and although this is an increase of 10.0 points since January 2022, monthly growth has marginally increased 0.5 points since December 2022.
Year-on-year median wages increased overall by 7.9 per cent to January 2023. The median hourly rate for employees working in Australian SMEs is now $35.96.
As of January 2023, the average number of employees among Australian SMEs was 21.5 points more than in January 2019 and the growth from December 2022 to January 2023 marginally increased by 0.5 points.
While year-on-year comparisons showed SMEs are still growing, the pace of growth is slow.
Compared to the previous year (January 2022), SMEs of all sizes have reported growth. However, small enterprises continue to struggle, displaying no growth month-on-month.
Smaller enterprises (one to 19 employees) grew in NET employee numbers by +6.2 per cent since January 2022 but did not grow (0 per cent) since December 2022. Medium enterprises (20–199 employees) grew by +22.2 per cent since January 2022 and by +1.1 per cent since December 2022. Larger enterprises (200+ employees) grew in NET employee numbers by +29.2 per cent since January 2022 and by +0.7 per cent since December 2022.
After last month’s decline, employee growth varied among all industries month-on-month, but all industries have experienced growth since January 2022.
SMEs in construction & trade services grew by +6.0 per cent year-on-year and by +0.2 per cent month-on-month. SMEs in healthcare & community services grew by +0.4 per cent since December 2022 and by 9.8 per cent since January 2022. SMEs in manufacturing, transport & logistics grew by +6.9 per cent year-on-year and by +0.3 per cent month-on-month.
SMEs in retail, hospitality & tourism did not experience growth in NET employee numbers (0 per cent) since December 2022, but they grew by +7.4 per cent since January 2022. Meanwhile, SMEs in science, information & communication technology grew by +6.6 per cent year-on-year and by +0.3 per cent month-on-month.
