But rate increase clouds outlook for Christmas
Average employee growth increased in September after a period of stagnation, but weaker seasonal hiring was anticipated compared to the previous year due to the recent Reserve Bank rate hike, which will potentially result in lower consumer confidence, according to Employment Hero.
In September, SMEs saw an average employee growth of 0.3% month-on-month (MoM) and 6.6% year-on-year (YoY), with employment numbers increasing in every state and territory, the Employment Hero SME Index showed.
Over the same period, Tasmania recorded the biggest monthly increase at 0.6%, while the Northern Territory had the smallest rise at 0.1%. In the ACT, NSW, and Victoria, SMEs saw a 0.3% MoM increase, while those in Queensland, South Australia, Western Australia, and Victoria experienced a 0.4% rise.
SMEs in every major industry reported monthly and yearly growth. SMEs in the retail, hospitality, and tourism sectors saw the biggest monthly increase at 0.5%, while those in science, information, and communication technology experienced the smallest rise at 0.04%. Meanwhile, SMEs in construction and trade services grew by 0.3%, while those in healthcare and community services, as well as manufacturing, transport, and logistics, registered a 0.4% rise.
Ben Thompson (pictured above), co-founder and CEO of Employment Hero, said RBA’s latest rate hike could potentially impact Australia SMEs during the crucial Christmas season and expressed concern that with interest rates now set to rise, there could be a drop in growth over the summer trading period.
“We were already expecting seasonality hiring to reduce as businesses seek to recoup losses, so the RBA’s rate rise of 25 basis points will no doubt be a kick in the guts for our small business community,” Thompson said.
He said the RBA move “to seemingly aid economic stability” might actually lead to considerable instability for the small business community and its employees.
“With already thin or shrinking profit margins, Australian SMEs face even greater financial burdens coming into the end of the year,” Thompson said. “Not to mention that Australian workers already grappling with the rising cost of living now must face the possibility of reduced job opportunities and hours as businesses scramble to adjust their plans and budgets.”
The September SME Index showed that median hourly wages rose 0.6% MoM and 7.6% over the past year. The median hourly wage for employees in Australian SMEs is $37.48, which is $0.21 higher than in August.
The SME Index showed that median hourly wages have increased due to employee growth, though this was not uniform across regions. Median hourly rates rose in all states and territories, with growth ranging from 0.4% to 1.8% Mom, bar the Northern Territory, where rates declined by -3.1%.
All the top industries experienced growth in their median hourly rates, with increases ranging from 0.2% to 0.8% MoM, except science, information, and communication technology, which saw a decrease of -0.6%.
Median rates rose for most age groups on a monthly basis, except for the under 18s group, which remained unchanged. Among the various age groups, the 65+ year-olds experienced the biggest rise of 0.6%, while the 18-24-year-olds and 25-64-year-olds saw their median rates rise by 0.5% and 0.4%, respectively.
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