One in four workers at businesses with under 20 employees say their pay is not keeping up with living costs, more than double the rate at larger companies
Of all the groups in the Australian workforce, workers at small businesses are the least confident about their financial futures. According to new Sharesies research, only 36% of employees at small businesses feel confident they can build wealth over the next decade, the lowest figure of any workforce group surveyed.
The gap between small and large business employees on this measure is significant. Half of workers at businesses with 100 or more employees want a holistic compensation package that builds long-term wealth. At smaller businesses, that figure sits at just under a third. The ambition and the access are not evenly distributed.
The cost of living dimension sharpens the picture further. One in four workers at businesses with under 20 employees, 25%, say their pay is not keeping up with living costs. That compares to 11% at businesses with 20 or more staff. Small business workers are feeling the squeeze more acutely than their counterparts at larger organisations, and the tools to address it have largely remained out of reach.
What workers are actually asking for
The research reveals a workforce that has moved beyond simply wanting a higher salary. More than half of Australian employees surveyed, 53%, say salary alone is not sufficient to build long-term wealth. And 76% say they would consider taking at least some of their pay in shares if the option were available.
Critically, this is not theoretical interest. Of those open to share-based pay, 73% would allocate up to 10% of their salary in shares, a practical and measured appetite rather than a speculative one.
The generational dimension is also significant. More than half of employees aged 18 to 34, 57%, say they are more open to non-traditional pay such as shares or enhanced superannuation than they were five years ago, compared to 28% of Gen X and 21% of Baby Boomers. For SME owners hiring younger workers, the expectation of ownership as part of the employment relationship is becoming a structural shift, not a passing trend.
Susannah Batley, General Manager of Sharesies Business, described the shift in plain terms. “Australians are starting to realise that a salary on its own isn’t going to deliver long-term wealth,” she said. “What’s interesting is they’re not just asking for more pay, they’re looking for smarter ways to build wealth over time, and shares are increasingly part of that conversation.”
Why small businesses are exposed
The research also highlights a significant awareness gap that is leaving both employers and employees on the sidelines. Half of Australian employees, 51%, say they are unfamiliar with employee share schemes, including 20% who are not at all familiar and 31% who have only a basic understanding.
For small business owners, this creates a double problem. They are competing against larger employers who already offer equity, ownership stakes and broader wealth-building packages as standard. And they are doing so in a market where neither side of the employment relationship fully understands the tools available.
“There’s a real opportunity here to bridge the gap between interest and understanding,” Batley said. “Employees are open to new ways of building wealth, but they need it to be simple, transparent and easy to access. The organisations that can do that well will stand out.”
What employee share schemes actually offer SMEs
Employee share schemes, or ESS, allow businesses to offer employees a stake in the company, either through shares issued directly, options to purchase shares at a future price, or rights that convert to shares under certain conditions. For small businesses, the appeal is the ability to offer a compelling total compensation package without increasing the fixed wage bill immediately.
The Australian government has tax concessions specifically designed to make ESS more accessible for small businesses, particularly startups and early-stage companies operating under the tax-deferred ESS framework. Under this framework, employees can receive shares or options without paying tax on the benefit immediately, with tax deferred until a later point, typically when shares vest or are sold.
For SME owners considering ESS for the first time, the practical starting point is understanding which structure suits the business, whether it is a direct share issue, an options plan or a rights plan, and getting advice from a tax professional or corporate adviser on how to set it up compliantly. The ATO publishes guidance on ESS tax treatment at ato.gov.au.
The research is clear that the appetite exists. Among small business workers, 35% would consider shares as part of their pay. For SME owners looking for ways to compete for and retain talent in a market where salary pressure is real and wage growth is constrained, employee share schemes represent an underused and underexplored tool.
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