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SMEs reveal top recruitment challenges

Small business owner

New research has shed light on the biggest obstacles small business owners have when it comes to hiring additional staff.

According to Westpac’s latest Small Business Report, SME owners are increasingly looking to increase revenue growth over the next 12 months; however, they are reluctant to hire new staff to help with the efforts. This comes despite tough market conditions continuing to make headlines.

The most common hurdles to hiring are financial, with 38 per cent of respondents saying they can’t afford to pay another wage.

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This was followed by 28 per cent of respondents noting that they only need extra staff occasionally, thus have difficulty with the recruitment process.

Twenty-four per cent said wages and/or penalty rates are too high to hire additional staff, 16 per cent said they “haven’t found the right person” and 15 per cent thought there’s too much paperwork involved in hiring someone new.

Meanwhile, the same amount of respondents (12 per cent) believe it would either be too stressful or too risky to be responsible for someone else.

“While the majority [of small business owners] could use a hand, few are actually picking up new staff,” the Westpac report noted.

“In our survey, around one-third of small businesses actually say that they’ve cut staff over the last 12 months. Whereas in the economy more broadly, job growth is strong.”

One of the biggest barriers to employment is the lack of flexibility, the report continued.

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“The need for staff can vary depending on the season, the business cycle, or even weekly changes in the length of the business owner’s ‘to-do’ list,” it said.

“Small businesses are far more likely to say they need help ‘occasionally’ than all the time.

“This is actually a bigger barrier to employment than penalty rates. And it bites particularly hard in the education and agricultural sectors, where 44 per cent and 40 per cent suggest that only needing staff occasionally prevents them from hiring permanent staff.” 

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