Small businesses are hiring: what to consider when growing your workforce

The latest Xero Small Business Insights (XSBI) data is a good reminder about the important contribution your small business makes to your local community, particularly  around job opportunities. There are more people working in small businesses than a year ago in the three countries where we track jobs (Australia, New Zealand and the UK). In fact, jobs growth is either already well above average, as seen in New Zealand, or accelerating. This suggests there is a renewed confidence among small business owners about hiring new staff. 

What is the latest XSBI jobs data showing?

In Australia, jobs rose an average of 3.7% year-on-year (y/y) in the March quarter, slightly up from 3.5% y/y in the December quarter. The monthly March result (+4.3% y/y) was the largest rise since October 2022 and above the long-term trend of 3% y/y. 

In New Zealand, jobs rose 7.0% y/y in the three months to March, the same result as the December quarter. In fact, it’s the 15th consecutive quarter that growth has been above the long-term average of 3% y/y.

The UK jobs recovery has been slower than in the other two countries, but at least it is moving in the right direction. Jobs rose 1.4% y/y in the March quarter, up from 1.3% y/y in the December quarter. The March quarter rise is the largest quarterly gain in two years, although is still below the long term average of 3% y/y. 

However, the positive jobs story isn’t the same in every industry. Healthcare and social assistance, which includes aged and disability care, is performing well above the national average in both Australia (+9.2% y/y) and the UK (+6.7% y/y).

At the other end of the scale, the hospitality industry had fewer jobs than a year ago in the March quarter in Australia (-1.4% y/y) and below national average growth in New Zealand (+4.5% y/y). In more positive news, hospitality did a little better than the national average in the UK (+1.8% y/y).  

What do you need to think about when hiring new staff?

If you’re thinking about growing your workforce, there are lots of things to consider – especially if you’re hiring people for the first time.

This is where you can benefit from expert advice. An accountant or bookkeeper can help you answer many of the important questions around hiring. Questions like:

• Is your business busy enough to justify hiring more staff?
• What new systems do you need in your business e.g. registration needs, payroll capability, insurance, onboarding process, training?
• What salary will you need to offer to not only meet your legal obligations but also attract the right candidates?
• What non-wage benefits could you potentially offer instead, for example, extra annual leave or flexible work agreements?

Xero has put together some handy guides to help you with hiring, whether your business is in Australia, New Zealand or the UK. Across eight important chapters, these guides will help you learn how to hire employees and how to handle the admin that goes with it.

If you’re interested in finding out more about how small businesses are performing, visit Xero Small Business Insights for more data and analysis.