Nearly half of Australia’s SMEs are rethinking staffing decisions to offset cost pressures from rising minimum wages and the super guarantee.

Millions of Australian workers are in line for a pay rise from 1 July 2025 as the latest minimum wage increase of 3.5% takes effect. At the same time, the super guarantee will increase from 11.5% to 12% of ordinary time earnings for employees – the fifth such increase since July 2021.

In advance of the looming cost rises, many Australian SMEs have been reassessing their staffing strategies, with 45% reporting plans to boost their use of contractors.

This shift, which is revealed in the latest edition of ScotPac’s bi-annual SME Growth Index Report, continues a broader trend away from permanent hiring. Since the Report commenced in 2014, the average SME headcount has fallen from 88 to just 55 today.

Other headline SME responses to rising super and wage costs include:

  • 30% of SMEs have frozen hiring new staff
  • 14% are increasing use of outsourcing – including offshore services
  • 13% are cutting back on employee hours or total headcount
  • 5% say they intend to close or sell their business.

ScotPac CEO, Jon Sutton, said SMEs employ around 7.5 million Australians and these staffing trends could have far-reaching impacts across the broader economy.

“The imminent wage and super hikes are understandably prompting SMEs to look at their staffing levels and, in some cases, make difficult decisions,” Mr Sutton said.

“However, managing higher wages and super payments doesn’t have to come at the expense of growth or stability.

“We encourage all business owners to sit down with their advisors as a first step, assess the impact of regulatory changes on their cash flow, and explore all possible management strategies.

“With the right operating and finance solutions in place, it is possible for SMEs to continue to grow and support their teams even as employee costs rise,” Mr Sutton said.

Mr Sutton said ScotPac’s team of experts are ready to help SMEs and their brokers stay ahead of upcoming regulatory changes with customised finance solutions

“ScotPac has been helping business owners manage employee costs and optimise their working capital for more than 35 years, Mr Sutton said.

For example, ScotPac’s core Invoice Finance product enables SMEs to access payments due on invoices sooner so they can better manage their cash flow ,” Mr Sutton said.

ScotPac has the largest range of fast and flexible lending solutions to support SMEs in any business scenario. Our Invoice Finance product, otherwise known as Debtor Finance, was recently awarded The Adviser Magazine’s Debtor Finance Loan of the Year for a sixth time.

About the SME Growth Index

Commencing in March 2014, ScotPac’s twice-yearly SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects.

The Round 22 research was conducted by East & Partners who interviewed 724 SME enterprises with annual revenues of A$1-20 million.

SMEs surveyed have operated continuously for an average of 15.6 years and manage, on average, 55 full-time employees.

Sectors represented in the survey included Property & Business Services (14%), Manufacturing (13%), Wholesale (12%), Retail (10%), Transport & Storage (10%), Personal & Other Services (10%), Construction (10%) and other industries including Mining & Resources, Agriculture, Media & Telco, Accommodation, Cafes & Restaurants, Finance & Insurance (non-bank) and Electricity, Gas & Water.

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ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion in revenues. For more than 35 years, ScotPac has helped thousands of business owners succeed, offering fast and flexible funding. From simple to complex, small to large, start-up, growth or turnaround – ScotPac can help with a range of funding including Invoice Finance, Trade Finance, Asset Finance and Business Loans.

 

For more information contact:

 

Todd Hayward
Mob: 0412 205 151