SMEs Contribution to Employment
| SMEs contribute a small, but increasing amount to employment... | Although SMEs contribute significantly less to employment than to the total number of enterprises, this contribution has increased over the years. The number of full time equivalent employees hired by SMEs increased by 3.2 percent in the year to February 1998, following an increase of 2.6 percent in the previous year. A significant proportion of this increase comes from employment generated by small businesses (0-5 FTEs). The number of FTEs hired by small firms increased by 4.3 percent in the year to February 1998, with small firms now employing 23.6 percent of the labour force, up from 22.5 percent in 1996. |
Figure 3 - Number of Employees by Size
| ...continuing growth observed over the last decade | This growth amongst SMEs in terms of both enterprise numbers and employment levels continues trends observed over the last decade. These trends are illustrated in table 2.5 |
| The number of small firms is increasing... | Over the period from 1994 to 1998, the most significant increase in establishments has been amongst small businesses employing 0-5 full time equivalent staff. A smaller increase has been observed in the number of full time equivalent employees hired by these small firms. However, the increase is still significantly greater than that experienced by other sized enterprises. |
| ...reducing the average size of firms in New Zealand | In line with the increasing proportion of SMEs in the New Zealand economy is the decline in the average number of workers employed by enterprises, as illustrated in figure 4. The average number of FTEs per enterprise has fallen in recent years from seven FTEs in 1994 to just over six in 1998. |
Table 2. - Percentage Changes in Establishments/Employees 1994-1998
| | Establishments
(% change) | Full Time Equivalent Employees (% change) |
| 0-5 FTE | 35.0 | 22.5 |
| 6-9 FTE | 4.6 | 4.6 |
| 10-19 FTE | 12.0 | 11.5 |
| 20-49 FTE | 15.1 | 15.6 |
| 50-99 FTE | 10.2 | 8.8 |
| 100+ FTE | 7.8 | 6.9 |
| Total | 30.2 | 11.7 |
Figure 4 - Average FTEs per Enterprise
| SMEs utilise the greatest proportion of part time employees | Utilisation of part-time employees is greatest amongst smaller firms, comprising 19 percent of all FTEs employed by firms with less than 9 employees. The lowest proportion of part-time employees (14 percent) is observed amongst firms employing 50-99 FTEs, with only a slightly greater proportion employed by firms larger than this. |
Figure 5 - Full/Part Time Employees by Enterprise Size
| 12% of the employed labour force is self-employed without staff | Figure 6 illustrates data from the 1996 Census, showing the largest proportion (75 percent) of the employed New Zealand labour force are paid employees, while 12 percent are self-employed and without employees |
Figure 6 - Employed Labour Force by Type of Employment
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