Challenges for Australian small businesses

The March Skills Shortage Quarterly (SSQ) report is out now.

This quarter we spotlight on small businesses and the challenges in filling job vacancies compared to medium-sized and large businesses. In 2022-23, small businesses had a fill rate of 52%, significantly lower than the 65% fill rate for large businesses. This shows that small businesses have greater difficulty finding skilled workers. Several factors point to this:

  • Small pool of applicants. Small businesses received a smaller pool of total, qualified and suitable applicants for vacant positions than their larger counterparts.
  • Longer advertising periods. Small businesses tend to advertise job vacancies for longer than medium and large businesses, suggesting greater difficulty in finding candidates with the right skills.
  • Vacancy characteristics. The nature of job vacancies in small businesses tends to skew towards lower-skilled positions.
  • Motivational issues with applicants. A greater share of small businesses report finding candidates unsuitable because the employer believed that the primary motivation of those applying may have been to continue qualifying for Centrelink benefits.

The report also shows that the national level fill rate has increased to 64.3%, up 0.9 percentage points in March quarter 2024 and up by 4.2 percentage points in the 12 months to the current quarter.

Fill rates in metropolitan areas (66.7%) remain well above that of regional areas (59.4%), with the average difference in the fill rate between the two areas widening overtime. This indicates shortage pressures in regional areas are becoming more pronounced.

Read more in the full report.