The third annual UPS Asia Business Monitor also found 50 per cent of Australian SMEs were increasingly worried about retaining their existing skilled workforce. "The research shows that there is a skills shortage in this country, placing pressure on employers to not only find the right staff but also to keep them," UPS Australia managing director Jeff Fairbairn said.

He said to stay ahead "in the battle for talent" SMEs should consider untapped talent pools such as mature aged workers and parents returning to work.

The business monitor surveyed 1200 small and medium-sized businesses in the Asia-Pacific, including 100 Australian companies. It says the skills crisis is echoing across the entire region, with 60 per cent of all respondents saying they were concerned about a lack of qualified workers. Other key findings include: 42 per cent of Australian companies plan to increase their workforce in 2007; 53 per cent expect to maintain current levels; and 5 per cent anticipate a drop in numbers.

The UPS survey also shows China and, increasingly, India are vital to local SMEs, with 45 per cent claiming China's economic success was a boost to local business, and 76 per cent saying India's growth was beneficial. AAP