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An overwhelming majority of small businesses experience frustrations around employing staff, suggesting the next generation of business owners will need to implement new methods to tackle these issues.
The latest MYOB Business Monitor survey of over 1,000 SME business owners has found that 75 percent of SMEs are experiencing at least one pain point in the employment process. Finding new staff, dealing with payroll compliance, the ability to dismiss employees and end of year paperwork were listed as the top pressures for small business owners when it comes to employing staff.
The findings come as the latest youth unemployment figures reveal a climb to 12.4 per cent for those aged 15-24 in May of this year, and the overall employment rate steadying at 5.7 per cent nationally.
With the South Australian Treasurer Tom Koutsantonis announcing earlier this month that the state’s 140,000 small and medium businesses will be able to claim a $10,000 cash grant for each new employee they hire, it’s become apparent that the SME community is seen as a possible solution to the concerning unemployment numbers. The New South Wales Budget also revealed a $6,000 payroll tax rebate per new hire for businesses with under 50 employees.
Alla Keogh, Head of People and Performance at MYOB, suggests that while it’s evident that SMEs are a possible solution to the unemployment problem, state and federal governments need to work with the SME community in order to make an impact.
“We congratulate state governments, particularly in South Australia on tackling the unemployment issue head-on. The South Australian cash grant is a great incentive for a small business owner, who can see the immediate economic benefit of making the hire, rather than having to wait until tax time.
“Governments at both state and federal levels must continue to recognise that if small and medium businesses are going to be a tangible solution to rising unemployment figures, they will need economic support in order to encourage growth in their workforce, especially in periods of wider economic uncertainty.”
Interestingly, Gen Y operators were more likely to suffer employment issues, with a mere 10 per cent stating they had no pain points whatsoever compared to 32 per cent of baby boomers. Forty two per cent of retail and hospitality businesses cited the hiring of new staff as a pain point.
“There’s no surprise that retail and hospitality are feeling the pressure, with high employee turnover and a fairly young and often inexperienced workforce. We encourage small businesses in these sectors to take note of employment incentives that have been introduced in recent months to help with the pressure of training-up new staff, which we know often comes with an economic business burden,” said Keogh
Generation Y leads the small business pack
The Business Monitor revealed that Gen Y small business owners were more likely (35 percent) to have seen an improvement in revenue in the last 12 months, compared to 25 percent of all SMEs who reported an improvement and 42 per cent whose revenue remained steady.
Gen Y operators were also more likely to have more work in their pipeline in the next three months, with 50 percent confirming this.
“It’s encouraging to see that the next generation of Australian small business owners are already steaming ahead and helping to stimulate our economy. The importance of small business to our nation is well-known, and these results suggest that this importance will only become more prominent in the decades to come,” said Ms. Keogh
Technology continues to be a barrier to growth
Up to 55 percent of business owners are still uncomfortable with cloud-based technology beyond email, the Business Monitor found. Data security remained the biggest concern, with 42 per cent listing hackers gaining access to data as their biggest concern, rising from 34 percent in the previous wave.
“We feel that the education piece is still not quite there for many small business owners, who may want to improve their technology systems but are not too sure on how to go about it.
“We encourage those in this situation to seek out advice, particularly from their accountant or financial adviser who can discuss software options that can help to cut down time spent on tedious compliance tasks,” said Keogh
Gen Y and Gen X operators were much more likely to have an online presence (70 percent and 62 percent respectively) than Baby Boomers (46 percent) and Traditionalists (26 percent). Interestingly, Gen Y business owners were much less likely to use email than Gen X (36 percent and 49 percent respectively).
“Whether your technology strategy is progressive or conservative, we’ve seen that small businesses who adapt to changing technologies are much more likely to experience business growth. Whether you have already implemented cloud software or you are first-timer to Twitter, we encourage small business owners to move beyond their comfort zone and seek the support they need to ensure technology is working for them.”