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Small business, particularly the hospitality industry, has rallied after a prolonged Covid-induced downturn but staffing shortfalls are hampering the sector’s ability to cash in on growing consumer spending.
Hospitality businesses are now not only looking to restore jobs lost during the pandemic lockdowns but aiming to grow.
Wages, on the other hand, haven’t recovered nearly as much as the jobs themselves, indicating workers are accepting less money for their labour than before the pandemic began.
Tash Sorensen, a Melbourne-based venue manager, says that for many enterprises the “biggest problems now are they often can’t trade as much as they want to because there aren’t enough people to work”.
“Everywhere is looking for staff, whether that’s in the kitchen, on the floor, in the bar.”
Jobs in small hospitality businesses slumped 45% (year on year) in April last year, outstripping the 10% fall in employment across small businesses more generally, according to data by Xero.
Widespread closures and social distancing measures threw the industry into chaos. But once lockdowns eased, and jobkeeper payments were functioning smoothly, jobs were quickly replaced and over the following 12 months, those lost jobs have been recovered.
In fact, the hospitality industry is 3.4% ahead of where it was 12 months ago, with the broader small business sector recording 5.3% jobs year-on-year growth, according to Xero’s data.
Women experienced a sharper decline in employment than men last April, losing 13.6% of small business jobs, to men’s 4.9%, but their recovery has almost returned to parity.
Women secured small business work very quickly, with job figures showing a 4.5% return to the workforce, keeping pace with men’s 4.9% growth.
“There is money there to be spent, that consumer confidence is definitely back,” Sorensen said.
“The problem might be a lot of the skilled international labour we used before the pandemic has left, and a lot of the skilled Australians overseas haven’t been able to get back. Either way, it’s a good time to really look after your staff if you have them.
Xero’s data shows small business wages growth slumped to 1.3% (year on year) in April 2020, and managed to accelerate 2.7% higher in March. But despite the strong recovery in small business activity, wages growth is still below the 2019 monthly average of 3% year-on-year.
To cope with the sharp change in trading circumstances, many small businesses transformed their business models.
“Our business has grown in an entirely new direction due to the pandemic,” said Andy Jackman, founder of Red Cow Organic, a cheesemaker and organic beef supplier in Tasmania.
Once demand from their distributors had dried up, Jackman and her partner Matt, went direct to the consumer.
“When hospitality and the food industry stopped, we stopped, so we had to find a new set of customers,” Jackman said.
“It’s meant new infrastructure requirements, new labour requirements and new skills, but we’ve got more staff now than we did before Covid-19 and we’re looking to hire more.”
Xero estimates Australia will need to create more than 210,000 jobs to return to the pre-pandemic growth trajectory.
Source: The Guardian
Keyword: Small businesses struggle to find enough staff as economy rallies after Covid downturn | Business