HR pressure and managing debt: Two key issues impacting small businesses this FY

Across industries, businesses are navigating an increasingly complex operating environment. Two key pressure points continue to dominate conversations in boardrooms and advisory circles alike: challenges in human resources and the growing burden of debt.

A shifting HR landscape

Attracting and retaining high quality staff has become one of the most pressing challenges for business leaders today. The lingering impacts of COVID-19, rising employee expectations, and evolving workplace laws have created a new and more demanding HR environment.

Businesses are under increased pressure to support employee wellbeing, manage disengagement, and remain compliant with a rapidly changing industrial relations framework. One growing trend complicating this space is “quietly quitting” - where employees remain in their roles but disengage from their work. Addressing this cultural shift requires a proactive, empathetic, and strategic approach to people management.

“It’s a whole different world in the HR space at the moment,” explains Partner, Jackie Marriott. “Attracting and retaining quality staff has become increasingly difficult, and the pressure on business owners to support staff wellbeing is higher than ever.”

To stay compliant and competitive, organisations must ensure their HR frameworks are not only robust but also supported by the right expertise. Whether through upskilling internal teams or engaging external providers, having the right support in place is critical, especially in light of new legal requirements, such as the introduction of paid domestic violence leave.

“Getting it right is imperative,” Jackie adds. “If not handled correctly, the legal and cultural consequences for a business can be significant.”

PKF supports businesses in building resilient HR strategies, offering tailored guidance and access to expert advice to help teams navigate the complexity with confidence.

The ongoing impact of business debt

While pandemic era debt helped many businesses stay afloat, the long-term consequences are still being felt. Businesses that took on loans, deferred tax obligations, or entered repayment arrangements are now under pressure to reduce liabilities amid continued economic uncertainty.

This combination of reduced margins and rising repayments is placing considerable strain on cash flow. For many, simply managing day-to-day operations while servicing legacy debt is becoming unsustainable.

There are solutions available. Refinancing to secure a lower interest rate or restructure existing facilities can provide immediate relief. But beyond refinancing, having a clear strategy to manage and reduce debt over time is essential. Tax debt, particularly with the Australian Tax Office, has become more difficult to manage, with businesses reporting increasingly limited flexibility from the ATO.

PKF’s advisory and Restructuring, Turnaround, and Insolvency specialists support clients with practical, forward-focused solutions, from brokering better lending terms to exploring formal options like Small Business Restructuring. For eligible businesses with under $1 million in creditor liabilities, this process can reduce debts by up to 80% and restore vital cash flow.

The key takeaway for business leaders? Don’t wait until the pressure becomes overwhelming. Whether you’re facing staff retention issues or struggling with mounting debt, early engagement with the right support makes all the difference.

PKF brings together cross-functional expertise across advisory, finance, and restructuring to help businesses respond with clarity, strategy, and confidence. Our team understands the day-to-day pressures business owners face, and we’re here to help you navigate them.