SMEs Contribution to Employment
The number employed by SMEs continues to rise
Despite a decrease in the number of SMEs in the economy, the number of employees hired by SMEs increased over 1998. This was generated by an increase in the number employed by medium sized firms, outweighing a decrease in the number employed by small firms.
The number of workers employed by SMEs in total increased by 0.2 percent in the year to February 1999, following an increase of 3.2 percent in the previous year. The proportion of total employees hired by SMEs has remained fairly constant over the last few years.
Figure 3
Table 2. - Annual Percentage Change in Number of Employees by Enterprise Size (years to February)
| | 1996 | 1997 | 1998 | 1999 |
| 0-5 FTEs | 2.7 | 3.9 | 4.3 | -1.3 |
| 6-9 FTEs | 2.6 | 0.5 | -0.6 | 2.9 |
| 10-19 FTEs | 1.8 | 1.5 | 3.5 | 1.6 |
| 20-49 FTEs | 6.2 | 1.8 | -0.9 | 4.0 |
| 50-99 FTEs | 3.9 | -0.2 | 1.7 | -3.9 |
| 100+ FTEs | 2.4 | 2.7 | -0.5 | -1.9 |
| Total | 3.0 | 2.3 | 1.1 | -0.5 |
New small businesses create the greatest number of new jobs
Table 3 illustrates the contribution that SMEs made to job creation in the economy between 1995 and 1997. The largest single contributor was new firms employing 0-5 FTEs, which created 103,000 new jobs. Of continuing businesses, the greatest number of new jobs came equally from small and large (100+ FTEs) firms. While small businesses were also the cause of the greatest employment reduction, this was outweighed by the jobs they created, giving a net employment change for all small firms of 56,000 between 1995 and 1997.
Table 3. - Employment Creation and Reduction by Enterprise Size February 1995 to February 1997
Source: Business Activity Statistics 1998, Statistics New Zealand
The average size of New Zealand firms has levelled out at six
After a reduction in the average number of employees per enterprise over the last few years, it levelled out in 1999. The average number fell from seven workers per firm in 1994 to six workers in 1998, and remained steady at six workers in February 1999.
Figure 4
SMEs utilise the greatest proportion of part time employees
Figure 5 shows utilisation of part-time employees decreases as firm size increases, ranging from 19.3 percent utilisation for firms employing 0-5 FTEs, to 14.9 percent for firms employing 100+ FTEs. Over the decade to 1999, utilisation of part time employees has increased across all size groups. This increase has been most apparent amongst larger firms, with 100+ FTE firms increasing utilisation from 9 percent in 1989 to the current level of nearly 15 percent.
Figure 5
The majority of New Zealanders are employees.
Figure 6 illustrates data from the 1998 Household Labour Force Survey, showing the largest proportion (85 percent) of the employed New Zealand labour force are paid employees, while 12 percent are self-employed or an employer.
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