A new report from accounting firm Grant Thornton has shown that small businesses in Australia are set to combat skills shortages by offering their staff increased pay.

Its International Business Report found that more than 80 per cent of small to medium-sized enterprises (SMEs) in the country are preparing to reward their employees a pay rise within the next 12 months.

Bill Shew, partner at Grant Thornton Australia, said that SMEs began to see fewer workers with certain skillsets and are now beginning to feel the strain of a lack of talent.

He added: "Businesses are starting to feel that they are receiving increased support from their banks, with more discussions being had to facilitate growth and stability."

The Australian Bureau of Statistics recently reported that the unemployment rate in the country was 5.2 per cent in September, with the number of people employed increasing by 20,400 in the month.

Posted by Sarah Dixon