Australia’s mid-market businesses are bracing for wage growth of up to 8 per cent over the next year, with industry leaders flagging staff retention and recruitment as their biggest challenge ahead of this month’s federal budget.

Respondents to the same pre-budget survey rated skill shortages as only their third most-pressing concern last year, showing just how severe the global talent crunch has become in the past 12 months. The survey is run by KPMG Enterprise annually and this year it surveyed 103 companies.