SMEs have long thought it and new research has backed it up: regulators are out of touch with the needs of employers, causing them to shed workers in a bid to ease the red tape burden.
This comes from the findings of the Scottish Pacific SME Growth Index, pre-released exclusively to My Business, which have seen a staged reduction in full-time employees among the 1,251 business, with turnover between $1 million and 20 million that are surveyed twice a year.
“Since 2014, the average number of full-time employees of businesses in the SME Growth Index has fallen from 88 to 75,” said Peter Langham, CEO of Scottish Pacific.
“Taking on employees is crucial to growth, and to the economy, yet there is a disconnect between SMEs and regulatory authorities if bringing on new employees, replacing staff or dealing with staff issues is having such an impact on the productivity of the sector.”
CEOs and CFOs have also been posed the question: “If you were Prime Minister for a day, what law or red tape would you change/introduce that would have a major positive impact on your business performance?”
Streamlining the reporting of Business Activity Statements (BAS) topped the list, with almost one in four (24.3 per cent) citing this as being in their sights.
“Despite recent government efforts to streamline BAS, this is still SMEs’ number one area of concern, indicating more needs to be done to relieve this pain point,” said Mr Langham.
This is closely followed by amending the Fair Work Act (22.1 per cent) and cutting business taxes (21.3 per cent). A further 8.2 per cent said they push the states to abolish payroll tax altogether.
Just 1.8 per cent of those said the introduction of legislated payment terms to stamp out late payments would be their first priority.
“With the federal government’s Red Tape Committee due to table its report to Parliament in December, these results give all levels of government a clear indication of the actions SMEs want,” Mr Langham said.
Other key findings:
- 29.3 per cent said hiring and firing rules were their biggest drag on productivity
- more than a quarter of firms (25.6 per cent) believe their earnings are directly linked to house prices, and 11.1 per cent expect to see reduced earnings because of house prices
- forecast revenue growth sits at a sluggish 0.8 per cent for the next six months to February 2018.
- the number of business mergers is expected to increase markedly, with 15.7 per cent planning a merger (compared with just 6 per cent in 2014)
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.