Will the shake-up of immigration negatively impact small businesses?

The government is leading a shake-up of the overall dynamics of immigration in an attempt to make housing more affordable. But how will it affect small businesses?

Jess Morris, head of people and culture at Reckon, has provided some analysis on the effect that stricter immigration laws could have on small businesses across Australia.

“The biggest change to immigration is a cut to international students. Universities are facing cuts of around 63,000 fewer students this year. However, the government is failing to consider the damage these cuts would do to Australia’s small businesses,” Morris said.

“According to ABS data, almost two-thirds (63.6 per cent) of international students are employed, most commonly in industries such as food and beverage services and residential care services.”

She added: “Businesses in these industries, especially in major student hubs like Sydney and Melbourne, rely on international students for their staffing needs. If immigration policies were tightened or cut, these businesses could face significant challenges in finding enough staff to fill these roles.”

Small businesses are already under the pump in relation to the tumultuous economy that is restricting the growth of a wide range of businesses. If a major component of their workforce is stripped from them, then the consequences could be severe.

“The ABS data also found that a third of businesses are unable to find staff, with industries such as hospitality and sales having particular difficulty. Lack of applications was named the biggest barrier to finding suitable candidates, proving just how detrimental it would be to lose such a large workforce,” Morris said.

“If small businesses are unable to hire staff, this is likely to result in decreased productivity, poor quality service, and operational disruption, which could lead to financial impact and threaten long-term sustainability.”

With these impending changes on the horizon, it’s crucial that small businesses prepare and are ready to adapt to the changing environment. Morris offered both short-term and long-term changes that small businesses could do to best prepare.

“With cuts to immigration pending, businesses should get vocal about the changes and speak directly with their local MPs about the knock-on effects it could cause for their workforce and operations. By engaging in public dialogue and lobbying for supportive policies, businesses can attempt to sway the outcome of cuts to offer help to reduce negative impacts on staff levels,” Morris said.

“In the long term, small-business owners should consider improving compensation and benefits to attract and retain staff. This may include better pay, an enhanced benefits package, fostering a positive environment, company training, and encouraging a good work/life balance.”

She added: “Businesses may also review how roles can be filled with local staff. For example, our research found that the popularity of part-time work is increasing; therefore, businesses may want to hire two part-time members of staff to cover a full-time position.”

Overall, although the immigration changes are in an attempt to create more affordable houses, the flow-on effect could be ghastly for small businesses that are being forced to adapt.