The latest Employment Hero SME Index has revealed that median hourly wages have risen by 1.6 per cent in January, the second month of consecutive growth
Year-on-year, the median hourly wages climbed by 7.9 per cent, while the Consumer Price Index (CPI) rose by 7.8 per cent over the twelve months to the December 2022 quarter. This would indicate that Australian wages have outpaced inflation and reflect higher candidate demand in the labour market, particularly in specialised industries.
Median hourly rate for employees working in Australian SMEs was $35.96, with the rates for employees in Healthcare and Community Services growing the most month-on-month at 3.2 per cent. Meanwhile, median rates in Manufacturing, Transport, and Logistics declined the most of all, falling -1.0 per cent. On a year-on-year basis, median hourly rates in Construction and Trade services grew the most at 8.4 per cent, while Manufacturing, Transport, and Logistics experienced the slowest growth at 5.1 per cent.
The index also noted that the average number of employees among Australian SMEs for January 2023 was 21.5 points more than in January 2019, with the growth from December to January marginal at 0.5 points. NET employee growth marginally increased since December 2022 at 0.1 per cent, while SMEs experienced employee growth of 7.6 per cent in the past year.
Employee growth in Construction and Trade Services grew by 0.2 per cent month-on-month, while SMEs in Retail, Hospitality, and Tourism did not experience growth in employee numbers. All industries experienced growth since January 2022, with SMEs in Healthcare and Community Services grew the most at 9.8 per cent followed by Retail, Hospitality, and Tourism at 7.4 per cent while Construction and Trade Services had the least gorwth at 6.0 per cent.
And while SMEs of all sizes have reported growth, smaller enterprises continue to struggle, displaying no growth month-on-month. In particular, smaller enterprises (1-19 employees) grew in NET employee numbers by 6.2 per cent since January 2022 but did not grow month-on-month. Medium enterprises (20-199 employees) increased by 22.2 per cent year-on-year but by 1.1 per cent since December 2022. While larger enterprises (200+ employees) grew in NET employee numbers by 29.2 per cent since January 2022 they experienced 0.7 per cent growth month-on-month.
Ben Thompson, Founder and CEO of Employment Hero, said: “We have seen NET employee growth marginally rise since December 2022 at 0.1 per cent, while year-on-year SMEs experienced 7.6 per cent growth. Small enterprises with up to 19 employees have yet to recoup losses seen in December 2022, displaying no growth month-on-month. While marginal, medium and larger enterprises have shown some growth since December.”
Thompson added, “Wages have increased by 1.6 per cent month-on-month, signalling the second month of consecutive growth after no change through October and November. Despite harsh economic conditions, we’re still in a candidate-driven market with more job postings but fewer qualified candidates. This could be driving up wages in key industries requiring specialised skill sets, such as Construction and Trade Services and Healthcare and Community Services, where the median wages grew by 8.6 per cent and 7.4 per cent, respectively, year-on-year.”
He further said, “With insufficient supply in the market, this is a concern for SMEs unable to keep up with talent market conditions. As wages start to rise again, this is a big alert that we’re not out of the woods and Australia could be in the middle of an upwards wage-price spiral. If we only look at the ABS’ Wage Price Index base data, we’re making decisions on incomplete data, and we’ll continue to see rate hikes from the RBA until we get this under control.”
