New research released by Xero on Wednesday 5th May illustrates that Australia was one of the fastest recovering economies in the world during the second half of 2020. It has been revealed that only 210,000 more jobs need to be created across Australia’s small business sector by the end of this year to drive a full economic recovery from the covid-19 pandemic.
The report which is called “The Job Ahead: Small business and the global economic recovery” sampled its data from approximately 300,000 customer records. These records were supplied by labour force data which was collected by the Australian Bureau of Statistics (ABS). The data found that younger staff, women and casuals were more heavily impacted by job losses in the small business sector.
Findings from the report also concluded that small businesses who paid their staff higher wages throughout 2020 experienced fewer job losses. It was reported that in May 2020, higher-paying companies saw employment decrease by 13.5 percent, in comparison lower-paying companies experienced a drop of 22.3 percent.
Businesses that opted for higher rates of digitalisation within their organisation, also saw a smaller number of employment declines, at 14.8 percent, in comparison organisations that were slow to adapt digitally experienced an employment fall of 18.4 percent.
It was also revealed that a combined number of 2.9 million small business jobs need to be created across Australia, New Zealand, the United Kingdom, Canada and the USA to ease the post-pandemic economic shock.
Australia only needs to create another 210,000 jobs, Canada 220,000, New Zealand 40,000, the United Kingdom 410,000 and the US 2 million more new jobs to reach a full recovery in the small business sector.
Although Australia was one of the fastest-recovering economies in the second half of 2020, the impact of the covid-19 pandemic on jobs will continue to be felt for some time going into the future.
The required 210,000 additional small business jobs needed to support our economic rebuild accumulate over twice as many small business jobs as are normally created in a single year.
In Australia, around 45 percent of private sector employees are in a business with less than 20 employees.
A sustainable and meaningful jobs recovery will only be possible if small businesses are hiring. Enabling this should be top of the federal government’s agenda.
The latest report released by Xero coincides with the release of its newly launched Small Business Index, which is a monthly index that analyses the economic health of Australia, the United Kingdom and New Zealand’s small business sectors across four different metrics; sales, jobs, time to be paid and wages.
The Small Business Index was released on Wednesday 5th May as part of the platform’s insights program, produced in partnership with Accenture, and pulls data from anonymised transactions made by more than 300,000 small businesses who currently use Xero’s services.
The launch of Xero’s Small Business Index which uses anonymised and aggregated data from our platform will make sure that the contribution of small business and the conditions they experience are more visible and quantified so they can be supported in the best possible way.
Data released by the index illustrates that Australian businesses have continued to recover from the covid-19 pandemics economic impacts. Sales have risen by 8.1 percent for the month of March 2021. In this same timeframe, wages grew by 2 percent, jobs also grew by 5.3 percent which is the largest year-on-year growth since January 2017. Furthermore, payment times narrowed to 22.8 days, this is 2.6 days less than the average time recorded in February 2020.
These figures all illustrate that small businesses across Australia are hiring, consumes are spending and invoices are getting paid quicker. This all demonstrates the promising signs that the small business sector is on the road to recovery.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
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