The number of business owners looking to create new jobs this year is declining.
MYOB’s Business Monitor found just 14 per cent of SMEs intend to take on new staff by February 2014, while 8 per cent said they intend to decrease staff numbers.
Tim Reed, CEO of MYOB, believes that it’s natural for business owners to “bunker down” rather than expand their staff in times of political and economic uncertainty.
“The state of the Australian economy directly impacts their confidence in the future of their business. When their confidence drops, they take less risk in investing in new staff members,” Reed said.
“That’s also the case with the country’s political health. Business owners wait hopefully for legislation and other fiscal and monetary policy moves that have a significant positive effect on their livelihood,” he added.
The decline in intentions to increase employment numbers was greatest among small businesses, dropping 5 per cent since last year.
However it’s not all doom and gloom. The Business Monitor also found that the number of SMEs looking to maintain existing staff levels for the next year rose from 61 per cent to 70 per cent.
“The local SME job market has remained fairly stable in the last 3 years. This is promising for the more than 7.4 million Australians already employed by this sector, giving them confidence about their employment situation. Combined with record-low interest rates, this will hopefully translate into stable consumer spending,” Reed said.
Reed believes the Government must now focus on ways to make the employment process as easy as possible for small and medium businesses to get intention to hire up.
“They’re often the first source of employment, particularly for young Australians,” he said.
“To drive a healthy domestic economy, we must encourage smaller business operators to persist with their plans for growth. We must provide a better environment for them to succeed through reduced red tape, better training, and stronger support channels,” Reed added, also suggesting that the streamlining of SMB compliance obligations would reduce the cost of employment.