Small business vital to jobs recovery

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A new report by small business platform Xero reveals that small businesses play a vital role in Australia’s post-COVID recovery. According Xero Small Business Insights program’s The Job Ahead report, Australia needs around 210,000 small-business jobs to be created by the end of 2021 to fully recover from the pandemic.

The report notes that younger staff, women and casuals, as well as those working in customer contact industries (such as hospitality), are the ones most impacted by job losses in the small-business sector. Digitally-connected small businesses saw a smaller declines in jobs, (14.8 per cent), compared with 18.4 per cent for those that were less connected.

Likewise, small businesses that pay higher wages in each industry saw fewer job losses at 13.5 per cent compared to lower-paying businesses which experienced a 22.3 per cent decline.

The report is based on data from Xero’s Small Business Index, developed in partnership with Accenture, based on the anonymised and aggregated data of over 300,000 customer records. The report provides an insight into the impact on employment in the sector during 2020, but also looks ahead to the part small business can play in rebuilding the economy.

“Australia was one of the fastest recovering economies in the second half of last year, but the impact of 2020 on jobs will be felt for some time yet,” Trent Innes, Managing Director for Australia and Asia at Xero, said. “The 210,000 additional small business jobs needed to support our economic rebuild represent over twice as many small business jobs as are normally created in a single year.

“In Australia, around 45 per cent of private sector workers are in a business with less than 20 employees,” Innes added. “A meaningful and sustainable jobs recovery will only be possible if small businesses are hiring. Enabling this should be top of the government’s agenda.”