As New Zealand continues to experience low unemployment levels, there has been a trend of steady growth in the hiring numbers of small businesses coinciding with the beginning of summer.

The latest Xero Small Business Insights (XSBI) reveals a 1.4 percent growth in the number of SME employees in December 2018. This is up one percent on November 2018, and 0.5 percent on the same time last year, highlighting an optimism and desire among small businesses to invest and grow.

Just before Christmas, 64 percent of small business owners told us that they want to grow their business and one of the key hurdles for business growth can be finding the right talent to bring on board. The latest figures, however, suggest that overall, SMEs are still managing to find ways to attract talent while unemployment sits at only 4.3 percent (as at December 2018) and looking at historical data, this trend is set stay for the months ahead.

While December saw a seasonal increase for the Retail Trade sector, with businesses taking on more staff to cover the busy Christmas period, the industry did experience slower hiring growth in 2018 compared with 2017. Hiring in the Professional, Scientific and Technical Services sector has also slowed, indicating that areas requiring specialised skills could be struggling to find talent with the appropriate expertise.

Good employees are hard to find - particularly highly skilled ones - however, one of the ways small businesses can scale and keep their growth up is by creating attractive workplaces and company cultures.

Creating an inclusive workplace and supporting environmentally or socially conscious initiatives plays a part in being an appealing choice for potential employees and retaining current staff. Deloitte’s 2018 millennial survey found respondents calling for organisations to place more importance on having a positive impact on society and to focus on work flexibility.

This is good news for many SMEs who are already ahead of the curve in providing flexible working hours and offering part-time positions. In fact, 66 percent of SME owners we polled at the end of 2018 have staff who work part time. The desire for a more flexible work schedule may also be a key factor pulling people towards the Administrative and Support Services industry, which grew by more than 12 percent on average in 2018.

Even though employment rates are on a high overall across the labour market, hiring numbers aren’t necessarily even across the regions – a trend which has been recognised by the government over the last 12 months.

With $60 million from the Provincial Growth Fund set aside to help five regions with skills and employment initiatives, it will be interesting to see how this positively impacts small business operations in areas including Northland, Bay of Plenty, and Manawatū-Whanganui.  

There are certainly some challenges ahead, and from previous data we know there will likely be peaks and troughs around new SME hires as we begin to look at this year’s figures. However, the overall trend is pointing upwards and small business growth is looking positive for 2019 with more diverse and skilled talent joining their ranks.

This article was prepared by Xero using Xero Small Business Insights data, for the purpose of informing and developing policies to promote small business in New Zealand. It contains general information only and should not be taken as taxation, financial, investment or legal advice. Xero recommends that readers always obtain specific and detailed professional advice about any business decisions.