Monday, June 17, 2024

Staff shortage threatens future growth of small business

Ongoing staff shortages for small businesses across Australia are now at a record high, representing a real challenge to current operations and undermining future growth plans, according to the latest national survey of franchised businesses.

The exclusive survey, prepared for the Franchise Council of Australia (FCA) by FRANdata, is designed to provide a quarterly snapshot of the Australian franchise sector. The September Quarter 2022 Franchise Business ‘Pulse Check’ survey received responses covering 105 brands, capturing 18,482 businesses who employ 202,223 Australians.

According to the survey, the greatest challenge for small businesses is the availability of suitable employees for franchisees at 83%. This is a record high for the survey and represents an ongoing trend – with 80% nominating the issue in the July survey, and 64% in March.

Availability of suitable employees for support offices (55%) was again the second largest issue for small businesses.

Supply chain issues (45%) and rising interest rates and the inflationary pressures (39%) rounded out the top four challenges. Fewer small businesses nominated these challenges compared to the July survey – highlighting the sector’s focus on employment concerns.

Despite ongoing challenges and economic headwinds, small business sentiment about the next six months is improving. 67% feel optimistic (up from 57% in July), with 19% neutral and only 14% pessimistic.

Year-on-year quarterly trading continues to recover. Nearly half of small businesses (47%) reported an increase in their September 2022 quarter income compared to September 2021 of more than 10%.

QLD, at 33% of respondents, remained the strongest performing state/territory for franchises over the past 12 months – down from 46% in the July survey. This was followed by NSW (24%), WA (21%), VIC (17%) and SA (5%).

Despite this, 37% of small businesses nominated VIC as the most likely location for expansion within the next twelve months – followed by NSW (36%), then QLD (22%) and WA (5%).

“Small businesses are the engine of the Australian economy. When they proposer, our country prospers”, says FCA CEO Mary Aldred.

“The situation for small businesses across Australia in regards to staff shortages is worsening. We need urgent action at the national level to address this challenge.”

“According to ABS data, 698,000 fewer people arrived in Australia in September 2022 compared to September 2019 – a reduction of 39%. It is not enough for the Australian border to be open, specific actions to increase the domestic participation rate and the attractiveness of Australia as a destination for international labour are needed”, Ms Aldred said.

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