Michael Smith outlines what Australia's economic engine room - SMBs - are feeling about the future.
Michael Smith outlines what Australia's economic engine room - SMBs - are feeling about the future.
The global economy has seen difficult times in recent years, and in Australia our own economic outlook is certainly subdued with a weakened GDP and a fall in our currency in recent months. However, we’re not seeing people being as worried about job security and Australian employers’ predictions for growth for the year ahead are still optimistic. Why? Perhaps the fact that the Australian economy has not gone through the big peaks and troughs experienced by other economies like the US, UK and some of the European markets, which has provided for some much needed stability to fuel future growth.
At Sage, the results of our recent Sage Business Index (SBI) have identified optimism and confidence about the state of the Australian economy and indeed optimism in the future of the global economy.
The SBI shows that SMB decision-makers globally are expressing confidence in the health of the global economy for the first time in the five years of the survey. They’re also more optimistic about national economies, and are more confident about their own prospects than ever before.
Australia shares this global optimism. The SBI shows that 64% of Australian SMB business decision-makers are confident about the future prospects of their own businesses. 55% are optimistic about the Australian economy and 54% about the global economy. Australian SMBs believe both are improving rather than declining.
More than half (53%) of Australian SMB decision-makers anticipate growth in business turnover in the next year, (23% predict turnover will decrease) and this growth is anticipated to lead to increased hiring practices with 40% of SMBs predicting an increase in headcount, (just 13% predict a decrease). In fact, the SBI shows that Australia has one of the highest expectations to hire in the world; expecting to increase by an average of 2.7%, well above the global average of 2.0%.
Other studies echo the findings of the SBI, suggesting we will see improvements in the Australian job market. An upbeat report from ANZ bank showed a sixth consecutive rise in monthly job advertising in November, while major recruitment company Hudson has recently reported buoyant hiring expectations for Q1 2015, and anecdotally, workforce growth within Sage MicrOpay’s own SMB and mid-market client base has grown in excess of 10% in the last financial year.
In the post-recession environment, the psychology for entrepreneurs and small businesses is changing. The attitude to risk is improving – the SBI found that globally companies are more willing to describe themselves as risk-seekers this year. Here in Australia 53% described themselves as risk-seekers – 4% above the global average of 49%. This may well be thanks to the more stable economic environment in Australia, which has weathered the GFC better than most other regions, where SMBs are better positioned to take considered risks.
We need SMBs to grasp the nettle and follow their ambitions. Their growth is vital for the Australian economy at large and it is encouraging to see their positive business outlook. We believe taking calculated risks often paves the way for new innovation, and Australian businesses are particularly good at that. They have the appetite, the skills and the potential to do so. By pursuing their dreams, they might just find they achieve them.
About the author
Michael Smith is Managing Director of Sage MicrOpay. He was recognized as one of Australia's most innovative HR leaders. Check out the other candidates who won as the best HR leaders in Australia in Hot List 2023 special report.
