SMEs report marginal increase in employment growth, wages rise

According to the latest data from the Employment Hero SME Index, average employment growth in Australian small and medium-sized enterprises (SMEs) saw a slight uptick of 0.04 per cent from March to April 2023 . Concurrently, median hourly wages experienced a growth of 2.7 per cent.



Across most states and territories, SMEs observed a marginal rise in average employment growth on a month-on-month basis, except for the Northern Territory, which experienced a decline of -0.1 per cent, and Victoria, which remained unchanged. Tasmania and South Australia reported the largest increase in SME employment at 0.2 per cent, closely followed by Western Australia and Queensland at 0.1 per cent. The Australian Capital Territory (ACT) and New South Wales witnessed a minimal increase of 0.03 per cent and 0.02 per cent, respectively.



While all industries displayed year-on-year growth, average employment growth varied marginally on a month-on-month basis. The Healthcare and Community Services sector saw a 0.2 per cent increase in SME employment, while Retail, Hospitality, and Tourism, as well as Manufacturing, Transport, and Logistics, experienced a 0.1 per cent growth. 



The Science, Information, and Communication Technology sectors witnessed a slight increase of 0.04 per cent in employment numbers. However, Construction and Trade Services reported a marginal decline of 0.03 per cent. In April, the median hourly wage for employees working in Australian SMEs amounted to $36.40, representing a $0.97 increase compared to March.



Median hourly wages experience an upward trend nationwide



SMEs across all states and territories in Australia witnessed a slight rise in median hourly wages on a month-on-month basis. New South Wales recorded the highest increase at 4.0 per cent, followed by the Northern Territory at 2.9 per cent, the ACT at 2.6 per cent, and Queensland at 2.3 per cent. Conversely, SMEs in Tasmania observed the smallest increase at 1.0 per cent, trailed by South Australia at 1.2 per cent, Western Australia at 1.4 per cent, and Victoria at 1.7 per cent.



Across various industries, median hourly wages experienced marginal growth. The Science, Information, and Communication Technology sector reported the highest increase at 2.7 per cent, followed closely by Healthcare and Community Services at 2.6 per cent and Retail, Hospitality, and Tourism at 2.2 per cent. On the other hand, SMEs in Construction and Trade Services had the smallest increase at 0.1 per cent, with Manufacturing, Transport, and Logistics following at 1.8 per cent.



Median hourly rates increased across all age groups month-on-month. Individuals under the age of 18 witnessed the largest increase at 3.2 per cent. For the age group of 18-24, median rates rose by 2.1 per cent, while those aged 65 and above experienced a 1.3 per cent increase. The age group of 25-64 saw a 2.2 per cent rise in median hourly rates.



The Employment Hero SME Index utilises the average number of employees per business relative to the January 2019 average, which has been set to 100 on the Index. As of April 2023, Australian SMEs’ average number of employees exceeded the January 2019 level by 23.7 points.



Ben Thompson, Co-founder and CEO of Employment Hero, said: “In April, we saw a return to employment growth month-on-month, albeit small, as median hourly wages rose for a second consecutive month. 



“SMEs across all industries saw marginal employment growth from March to April, with the exception of Construction and Trade Services, which declined slightly. Similarly, most states and territories experienced growth over the month, however Victoria remained unchanged and the Northern Territory declined marginally. 



“All states and territories saw an increase in median hourly wages month-on-month. SMEs in New South Wales experienced the greatest growth, while Tasmania saw the smallest increase. Likewise, wages grew across all industries. Science, Information and Communication Technology saw the greatest increase, as SMEs in Construction and Trade Services experienced the smallest.



“The ABS’ WPI recorded private sector wages rose 3.8 per cent over the year to March 2023 while our data showed a 7.7 per cent increase for the same period, which means wage growth for SMEs is already outpacing inflation. Our most up to date data showed a greater jump of 8.1 per cent in April’s year-on-year comparison. If we look at our data and acknowledge the actual increases to earnings over the past 12 months, it holds true that a lot of Australian SMEs have already increased wages. 



“It is no doubt a challenging balancing act for many business owners out there, but as wages start to rise again, our Government needs to be making decisions on all wages, including non-standard wage components, to tame inflation as much as possible. 



“Seasonally adjusted unemployment grew to 3.7 per cent for March 2023, according to the ABS, as our SME Index also indicated marginal declines in employment growth for the months of February and March. We do run the risk that the marginal growth we’ve seen in April will be lost if wages continue to rise,” Mr Thompson said.



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