Manufacturing among industries to lead the hiring demand in 2023

The latest annual SME Compass Report by fintech SME lender Banjo Loans, found 70 per cent of Australian small businesses believe 2023 will be a year of revenue growth for them.


Australia’s small to medium enterprises (SMEs) are feeling upbeat about the future and reporting revenue growth despite the pressures of the current economic climate and fears of recession, with staffing demands being led by manufacturing, healthcare, and hospitality.

Banjo Loans CEO Guy Callaghan said it’s wonderful to see optimism about the future running so high, regardless of regional or city location but that there was a clear gap between consumer sentiment and business sentiment.

“Australian SMEs are facing significant challenges this year with inflation, rising supply costs and increasing interest rates. Despite all of this, they are showing great resilience and using strategies to continue to ride those waves and thrive,” he said.

“In a further testament to positivity and confidence, more than a third of SMEs have said they are planning to merge with a competitor or acquire another business in 2023. This is an encouraging sign that they’re seeing a positive future for their business on the horizon.”

But it isn’t all sunny skies, with inflation concerns weighing heavily on many SMEs. Two thirds of Australian business owners fear that the current inflation rate will be a barrier to growth – up 12 per cent year-on-year. Fitness, hospitality & tourism, and beauty & wellbeing are among the worst impacted by inflation. The concern is also higher for metro-based businesses.

“Thankfully, SMEs aren’t sitting about and waiting, we’re seeing that almost all of them have already developed strategies to manage inflation – 49 per cent have had to apply price increases and 40 per cent have reduced their costs. They are taking intuitive and positive steps, by making plans and tackling those hurdles to the best of their ability.”

The hospitality sector is the most likely to have had to increase their prices in response to inflation (76 per cent), while those in banking & financial services, and trades are most likely to have reduced costs to combat the economic pressure.

Worryingly, one in five SMEs have built up tax debt. This is particularly prevalent in the accounting sector (42 per cent), fitness (31 per cent) and trades & services (30 per cent). But being proactive, over half of those have set up a payment plan with the ATO.

In a tight labour market, there is significant demand for new hires this year, with 62 per cent of SMEs intending to increase their headcount. On average, the SMEs surveyed are looking to grow by six new staff.

“Perhaps as expected, this staffing demand is led by healthcare, hospitality and manufacturing. These sectors have been particularly under the pump since COVID, with immigration slow to resume. SMEs tell us that recruitment is a challenge. One third are reporting difficulties in finding staff and two in five have concerns about labour shortages.”

In an effort to attract talent, SMEs are now offering increased pay.

Half of SMEs intend to leverage funding this year to drive growth, especially metro-based businesses. Business loans are the preferred funding source for business owners – particularly for construction, real estate and healthcare.

“While economic conditions are becoming increasingly harder to navigate, SMEs are seeking expert advice and turning more towards accountants and finance brokers to help them secure the funding they need to grow. Many are finding value in using Finance Brokers to help source affordable interest rates and make the overall borrowing process much simpler to navigate.”

“However, what we’re hearing is that accessing external funding isn’t easy for half of SMEs due in part to increased interest rates. Many are also finding that it takes far too long for banks to reach a decision, when small business would prefer a nimbler process.

“This inability to access funding is a barrier to growth for one fifth of small businesses.”

Banjo Loans works with thousands of SMEs, providing unsecured loans to fund their growth, with its fintech model enabling lending decisions to be given in as little as 48 hours.

“While inflation is a definite cloud on the 2023 horizon, SMEs’ confidence and revenue are high. It’s heartening to see they’re actively planning to acquire, grow, and hire.”



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