Australia is facing a war for talent — and the nation’s small businesses appear to be outgunned, with large companies growing their headcounts faster while also offering more significant wage increases.
New data from payroll and HR platform Employment Hero suggests the rate of hiring slowed across all Australian businesses in August, with smaller businesses the hardest hit.
The company’s August SME Index found headcounts at companies with between one and 19 employees remained level through the month, after falling 0.5% in July.
However, bigger businesses still managed to tack on new staff. Headcounts at businesses with between 20-199 grew 0.7% in August, and large companies with more than 200 staff grew their ranks by 0.8%.
The data speaks to the incredibly tight labour market, which has constrained the ability of companies of all sizes to significantly bolster their numbers.
The unemployment rate currently sits at just 3.5%, and job listings are at all-time highs, giving many jobseekers the upper hand in contract negotiations.
One way to win over would-be employees in the battle for staff is by lifting wages.
While significant wage hikes are yet to filter through to official data, there are preliminary signs companies are boosting their hourly rates to attract talent.
Yet the new Employment Hero data suggests small businesses are losing there, too.
Wages at small enterprises have grown 5.1% from August 2021 levels, the August SME Index said. By comparison, wages at medium and large firms grew 6.2% and 8.2%, respectively.
Workers at small companies also earned the lowest median hourly rate of the three at $30.61, compared to $37.17 and $36.35 for medium and large firms, respectively.
The findings suggest that small businesses — already stretched thin by inflation — are unwilling, or unable, to offer the wage hikes touted by larger competitors.
Given the discrepancy between big and small employers in the data, Employment Hero CEO Ben Thompson questioned if the recent Jobs and Skills Summit did enough to address the struggles facing SMEs.
“The Jobs and Skills Summit undoubtedly covered an expansive list of employment topics and issues but I wonder if the last people attendees were thinking about were the employers, especially those on the smaller end of town?” he said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
