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Staff recruitment stalls among small businesses


Wage rises to attract workers cannot keep up with even larger salaries on offer from the big end of town, Employment Hero survey finds.

By Keeli Cambourne11 minute read

Staff hiring has stalled among small businesses over the past month despite a rise in job vacancies due to an inability to compete on wages with big companies.

The latest Employment Hero SME Index found that recruiting has become increasingly difficult and as a consequence growth in the sector is slowing.


The data revealed that SMEs across Australia grew employee numbers compared to a year ago but since July 2022 recruiting has been stagnant or marginally declined and smaller enterprises are struggling the most.

Small businesses (less than 20 employees) grew by 7.4 per cent in the past year, but staff numbers flatlined in July.

On the other hand, mid-sized enterprises (20–199 employees) added employees over the past month (up 0.7 per cent) and have increased staff by almost one-quarter since August 2021.

Larger enterprises (200+ employees) experienced the biggest growth in employee numbers, up 30.9 per cent since August 2021 and up 0.8 per cent since July 2022.

The survey showed small businesses cannot increase wages fast enough. While SMEs have lifted pay by 5.1 per cent from August 2021, larger businesses have increased their wages by up to 8.2 per cent, outbidding SMEs for the same workers.

Workers at small companies earned the lowest median hourly rate at just $30.61, while those in medium-sized business earned $37.17 and larger firms were offering $36.35.

In an industry breakdown, construction has most difficulty recruiting, followed by retail, hospitality and tourism.

The Employment Hero SME Index takes January 2019 as a baseline of 100 to track the average number of employees among Australian SMEs. It uses an accumulative dataset of more than 120,000 SMEs, employing 1.1 million. The latest result puts the index 12.6 percentage points above that baseline, indicating 12.6 per cent more jobs than in 2019.

Staff recruitment stalls among small businesses
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