Recruitment woes and declining revenues weigh on small business owners as economic pressure mounts
Small businesses in Australia continue to face challenges in attracting and retaining staff, according to latest data from the Australian Bureau of Statistics (ABS).
In the 12 months to September 2024, the number of employees at small businesses — those with 20 or fewer workers — declined by 8.1%.
This drop comes as medium and large businesses experienced employment growth. Companies with 20 to 199 employees saw their staff numbers rise by 7.1%, while businesses employing over 200 workers recorded a 6.3% increase.
The overall employment situation across Australia also saw a slight decline, with total payroll jobs across all business sizes falling by 0.4% during the same period.
The ABS data highlights a widening gap between small businesses and their larger counterparts. The hospitality sector, including cafes, bars, and restaurants, has been particularly affected, as these businesses struggle to compete with larger organisations for workers.
State-by-state analysis shows that the Australian Capital Territory and Tasmania were among the most impacted regions. Both regions recorded significant declines in payroll jobs, reflecting broader challenges in the labour market.
The figures add to growing concerns for small business owners, many of whom are already grappling with high operating costs and uncertain economic conditions.
Cash flow issues have compounded these challenges, with nearly 80% of small to medium businesses (SMBs) reporting financial strain in the past year, according to a recent survey by Commonwealth Bank.
Declining revenue (35%), limited cash reserves (30%), and seasonal fluctuations (27%) were identified as the top causes of cash flow difficulties.
“For small businesses, success often hinges on a delicate balancing act,” said Rebecca Warren (pictured above), executive general manager of small business banking at Commonwealth Bank. “It’s not surprising that the economic challenges of the past year have resulted in cash-flow impacts for many Australian SMBs.”
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