The Federal budget was announced on Tuesday 29 March 2022 had a couple of interesting points highlighted from a recruitment & retention perspective.  Today we are going to unpack how some of the tax incentive announced in this budget may keep SME’s to retain some of their key personnel.

The first key insight from the Federal budget was something that we have been very vocal about in 2022 which is the record low unemployment rate in Australia which is sitting at around 4%.  What this means for SME’s is that candidates currently have unprecedented choice in where they work.  Couple this with strong demand shown in job advertisements data provided by Seek, businesses are faced with a challenge filling vacant positions as well as key staff being lost to competing offers.

Throughout 2022 we have shared a number of strategies that businesses can use to combat this, however another one has come to light as it has been incentivised through tax breaks in the recent budget.  That is tax breaks for the provision of training and development of your employees.

Announced in the budget is that through to 30 June 2024 that every $100 invested in training by business will attract a $120 tax deduction.  This additional incentive obviously is designed to make it more attractive for businesses to train employees and from an On Demand HR perspective, we think that an employee that is engaged in a formal training program that is paid by the employer is less of a retention risk.

Has your business considered identifying key personnel and engaging them through external training and development and taking advantage of the additional tax breaks that are on offer?  In our view this will have a double benefit to the business assuming that the training is relevant, both from a retention perspective but also enabling the employee to add even more value to the business with the new skills and experience they gain as a result of the training.