Eight in 10 SMEs set to combat skills shortages with pay rises
Tuesday, October 25, 2011/
More than 80% of Australian SMEs will offer staff pay rises in the next 12 months to combat skills shortages, a new report reveals, while political uncertainty continues to dampen business confidence.
Accounting firm Grant Thornton recently released the findings of its International Business Report, based on a survey of 75 businesses ranging in size from 20 to 299 employees.
The survey found 83% of the businesses surveyed expect to offer their employers a pay rise during the next 12 months, while 14% plan to offer employees a rise above the inflation rate.
“Business is beginning to feel the stresses of a few years ago when it was hard to find the appropriately skilled people,” Grant Thornton Australia partner Bill Shew says.
According to Shew, small businesses are also being affected by the uncertainty and negativity surrounding the current political landscape, namely Australia’s hung Parliament.
“It is difficult to plan for, and fund, future growth when major reforms such as the carbon tax and the minerals resource rent tax continued to be debated,” he says.
Shew’s sentiments mirror comments made by Peter Anderson, of the Australian Chamber of Commerce and Industry, who believes the carbon tax highlights the extent of uncertainty.
“Central to the economic debate is the position of small business. Despite the community consensus being in the other direction, legislation is being pushed through,” Anderson said.
But the outlook for SMEs is not entirely dismal – the Grant Thornton report shows the relationships between small businesses and their banks continue to strengthen.
“We are now seeing banks and businesses starting to come together again,” Shew says.
“Businesses are starting to feel that they are receiving increased support from their banks, with more discussions being had to facilitate growth and stability.”
According to the latest business banking report by DBM Consultants, the Commonwealth Bank and Westpac are the standouts in the micro market, which accounts for 89% of all businesses.
The micro market refers to businesses with an annual turnover of less than $1 million, while those in the small business market have an annual turnover of $1-5 million.
“Westpac performs much better in the micro market… Its scores have consistently improved among micro businesses over the last 12 months,” DBM managing director Dhruba Gupta says.
“CBA has also steadily improved in the micro market through 2011, associated with increasing ratings of reputation and service satisfaction, which are key drivers of overall satisfaction.”
In contrast, Gupta says NAB’s results in the micro and small business segments have been relatively flat for at least 12 months, while ANZ’s performance in the micro market is in decline.