SMEs bear the brunt of staff shortages, according to ABS

Staffing shortages are more likely to affect the operations of SMEs than that of large businesses, the Australian Bureau of Statistics (ABS) has found. 

The ABS’s Business Conditions and Sentiments report for June 2022, released on Thursday, highlighted that around 46% of small and 40% of medium businesses were more likely to be affected than large businesses (29%) by the unavailability of suitable staff.

The findings are based on a survey of 2000 private businesses, conducted by the ABS between June 8 and 16. The businesses operate in sectors such as mining, manufacturing, construction, wholesale trade, retail trade, accommodation and food services, and arts and recreation services.

According to the data, nearly a third (31%) of businesses in Australia reported difficulty finding suitable staff, with it affecting large (66%) and medium (62%) businesses more than small businesses (29%). 

But despite large and medium businesses finding it harder to recruit, the operations of SMEs were more likely to be affected when compared to large businesses.

“Nearly half (46%) of small businesses affected were impacted to a great extent,” Tom Joseph, head of Industry Statistics at the ABS, said. 

“Businesses reported having difficulty finding suitable building trade workers, clerical workers, labourers, sales staff and hospitality workers. Other in demand jobs included engineering trades and ICT professionals,” Joseph explained. 

Over 50% of businesses in the accommodation and food industry were more likely to face staffing difficulties, followed by education and training (25% to 47%), retail trade (18% to 39%) and administrative and support services (24% to 43%).  

The staffing difficulties, according to the ABS, are largely because of a lack of job applicants (79%) and applicants not having the required skills (59%).

“This corresponds with the strengthening jobs market and current low unemployment rate,” Joseph said.

The survey also found small businesses (29%) were less likely to increase wages or salaries over the next three months compared to medium and large businesses (49% for both). 

Operating expenses on the rise

The ABS data also shows that nearly half of the businesses surveyed saw an uptick in operating expenses, compared to the previous month, with operating expenses doubling since June 2021. 

Nearly half of the businesses (44%) also expected operating expenses to increase in the next month, which is the highest proportion of businesses expecting an increase since this statistic was first compiled in July 2020. 

Expenses are expected to increase due to an uptick in general costs and wages, with contributions from the cost of products, materials and fuel. 

More than 41% of businesses also experienced supply chain disruptions in June 2022, with retail trade (68%), accommodation and food services (64%) and wholesale trade (61%) most affected.

Retail trade has experienced the highest supply chain disruptions compared to all industries since February 2022. 

Of this, around 40% of businesses say they were greatly affected by supply chain disruptions, while 59% say they were affected to a small extent. Only 1% of businesses were not affected at all. 

The data also shows that small and medium businesses were less likely to have staff working from home, coming in at 33% and 40% respectively, compared to 71% of large businesses. Staff flexibility was the main reason all businesses allowed for this arrangement. 

For the most part, all businesses expected the arrangements to remain, with 63% of small businesses likely to keep the arrangements, compared to 56% of medium businesses and 51% of large businesses. Large and medium businesses (29% for both) were also more likely than small businesses (20%) to decrease work from home engagements.