India’s small businesses are the most likely to expect a jump in their employee numbers in 2024, however, the number of such enterprises seeing a possible growth in their headcount is significantly lower than in 2023, said a survey by professional accounting body CPA Australia on Thursday.
The online survey, conducted in November and December 2023, had 4,222 small business respondents in 11 markets across Australia, Mainland China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Philippines, Singapore, Taiwan, and Vietnam. There were 505 respondents from India.
According to the survey, 67 per cent of Indian small business respondents plan to recruit new staff this year, though highest across Asia-Pacific surveyed markets, but lower from around 86 per cent last year, of which 52 per cent had reported a jump in their headcount in 2023.
“This year the pace of job creation by small businesses is expected to slow, although (it) remains high in comparison to other markets. This is most likely due to a combination of factors including increasing levels of automation and rising labour costs,” said Prafulla Chhajed, a CPA member of CPA Australia in India.
Small business respondents expecting to hire more people this year were around 18 per cent in Australia and New Zealand, around 42 per cent in Mainland China, around 53 per cent in the Philippines, around 52 per cent in Hong Kong and Indonesia, and more.
According to the survey, increasing costs, competition, and cash flow-related challenges were the major barriers to India’s small businesses last year. Among various costs, staff costs and materials were the most detrimental to small businesses in 2023.
To cover increasing expenses and support business growth, many Indian small businesses sought external funds, the survey said with 68 per cent seeking external funds last year, dropping 20 percentage points from 2022.
In terms of business growth, over three-quarters of small businesses in India reported growth in 2023, surpassing pre-pandemic levels. This growth momentum is expected to continue this year also as the confidence in the local economy and business expansion continue to rise, the survey noted.
From 73 per cent in 2022, 77 per cent of Indian small businesses said they grew last year — the highest level since 2019. Moreover, 84 per cent expected business growth this year, much higher than the market average of 70 per cent.
Even as the global economic outlook is uncertain, 80 per cent of Indian small businesses part of the survey were upbeat about the local economy in 2024, above the survey average (65 per cent).