What the October 2025 SME Report Means for Hiring Right Now
Australian SMEs are entering the final stretch of 2025 with cautious optimism. The State of Australian SME Report (Oct 2025) shows mixed signals: monthly turnover softened in August compared to prior months (still better than last year), with expectations of stabilisation through September–October as rate cuts flow through. The Benchmarking Group Pty Ltd
Business confidence lifted in September with one in three businesses (33.4%) saying they’re better off than a year ago, and overall confidence sitting at 101.6—still below the long-term average of 109.9. Consumer confidence, meanwhile, remains subdued at around 86.5, which is weighing on discretionary sectors. Translation: careful spending continues, and hiring needs to be targeted and efficient. The Benchmarking Group Pty Ltd
On the risk front, payment defaults surged 19% in July and stayed elevated through August, a reminder that cash-flow pressure hasn’t evaporated. Insolvencies dipped in August but remain concentrated in construction and hospitality. Early warning signs—like multiple payment defaults or significant ATO tax debts—are still strong predictors of distress. This environment rewards disciplined, data-led hiring rather than “spray and pray.” The Benchmarking Group Pty Ltd
What this means for your hiring
1) Hire for productivity, not just headcount.
With demand patchy and costs sticky, every hire has to move the dial. Define outcomes up-front (e.g., revenue enablement, customer retention, cost reduction) and screen candidates against those outcomes, not just years of experience. The report’s backdrop—confidence up but still below long-term norms—supports selective, ROI-focused hiring. The Benchmarking Group Pty Ltd
2) Expect continued skills tightness.
The report highlights ongoing talent/skills gaps. That means widening your net to adjacent industries and prioritising capability over titles. Structured screening helps you spot “skills-adjacent” candidates who can ramp quickly. The Benchmarking Group Pty Ltd
3) Move fast, but remove friction.
Consumer caution is lingering, which often translates to candidates being choosier and shorter hiring windows. Tighten role briefs, standardise screening questions, and reduce unnecessary interview rounds. You’ll protect candidate experience and reduce drop-off. The Benchmarking Group Pty Ltd
4) Plan ahead for early-2026 starts.
Many SMEs use November–January to line up Q1–Q2 hires. Given the business confidence trajectory and steady (if modest) expansion outlook, start shortlisting now so your new starter is productive when 2026 budgets hit. The Benchmarking Group Pty Ltd
5) Watch cash-flow risk as you scale teams.
The spike in defaults and persistent sector stress means hiring should be phased with milestones. Build contingency into offers (e.g., staged onboarding for multiple roles). The Benchmarking Group Pty Ltd
How Mornington Screening Service helps (and what we don’t do)
Mornington Screening Service (MSS) is a time-saving screening partner for SMEs. We help you:
Define the role clearly, focusing on outcomes and must-have capabilities.
Source and screen across adjacent talent pools to quickly surface high-fit candidates.
Please make sure to deliver a short, tight list so you meet only the best prospects and keep momentum.
Important scope note: MSS does not conduct reference checks or offer a replacement guarantee. We specialise in fast, effective screening to produce high-quality shortlists; you make the hire decision and complete any reference checks internally.
Quick actions for Q4 2025
Tidy the role brief: convert responsibilities into 5–7 measurable outcomes.
Prioritise capabilities: list three non-negotiable skills and 3 “accelerators” you’ll trade for potential.
Lock your timeline: interview windows, decision date, desired start.
Book your shortlist: engage MSS now to land interviews before the Christmas slow-down.
Considering Defence or advanced manufacturing?
The Defence Industry Development Grants (DIDG) program is open with streams for sovereign priorities, skilling, exports, and security—grants from $5,000 to $1 million (up to 50% of eligible costs). Some streams close on 31 October 2025, and others on 30 November 2025, so move quickly if talent and skilling investment are part of your 2026 plan. The Benchmarking Group Pty Ltd
Source: State of Australian SME Report – October 2025 Edition (Benchmarking)
