Amid labor shortage, small and midsize businesses split on future of work and return to office.
As we enter 2022 National Small Business Week (May 1-7), many small and midsize businesses across the nation are feeling optimistic about their future and financial security. With a new semblance of normal taking shape, they’re bullish on their recovery and growth, as 77% of respondents have expanded or are considering expanding their business into a new market. Furthermore, 71% of small and midsized business decision makers say they are better off now than one year ago. They also view technology as a key ally to help them overcome lingering challenges to improve sales, boost talent acquisition, and tackle rising inflation and supply chain issues.
The new findings, commissioned by Verizon Business and conducted by Morning Consult, are from a major metropolitan survey of small and midsize business decision makers with specific findings across 10 key U.S. markets. In this survey conducted in March 2022, 1,033 small to midsize business decision makers shared their current state of mind and how they plan to overcome remaining challenges. Specifically, these business decision makers are seeking new avenues to expand their business and maximize their use of new technologies to solve challenges in order to drive growth.Download the Small and Midsize Business Outlook and Technology Adoption Study
of small and midsized business decision makers say they are better off than one year ago, and 45% believe their business’s financial security has improved in recent months.
Supply chain and other challenges persist.
As businesses look beyond recovery and seek to expand their operations, several hurdles continue to block their path forward. According to the survey, 57% of respondents say they have experienced declining sales over the past year coupled with 69% experiencing increased costs, while 61% of respondents report issues with sourcing materials due to the ongoing global supply chain crisis.
In dealing with these problems, small and midsize businesses are making a variety of strategic adjustments. For example, 42% of decision makers say they have dealt with supply chain disruptions by stockpiling goods, while 38% are implementing continuity planning. It should be noted that nearly two-thirds believe the supply chain crisis will ease, as 63% expect that providing goods or services and 64% believe acquiring products will be easier a year from now than it is today.
Businesses are open for business, now they need more workers.
Although pandemic recovery is ongoing, hiring remains a particularly pressing challenge amid the Great Resignation or the Great Reshuffle. In fact, 55% of respondents say they have hired new employees in the past year and 51% have created new positions – yet 60% have struggled to fill open positions.
To address and retain talent, flexible work arrangements and other enhanced benefits like mental health and wellness programs are being adopted. For example, 65% of respondents have either begun offering or expanded their offering of mental health and wellness programs, further showing the support small and midsized business owners are offering their current and prospective employees.
Additionally, to retain employees, nearly 40% of decision makers say they have added net-new remote work or flex work hours during the pandemic, and 79% either offer or plan to soon offer incentives to attract and retain employees. And like businesses of all sizes, these small and midsize businesses are still figuring out their workplace needs for the future. In the last year, 62% say they have transitioned employees from onsite to remote while 52% have transitioned from remote back to office.
For those in a hybrid or remote work situation, technology is facilitating a level of collaboration not possible before. Half of those surveyed say they have hired non-local employees for remote work in the past year, which helps explain the provided devices or technology to help employ or retain talent. Additionally, to help secure faster connectivity for hybrid and remote workers, 73% believe that it’s important to offer a stipend for home internet services. The result? As compared to pre-pandemic levels, more than half (56%) surveyed say employee morale and 62% say collaboration is higher.
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Technology is a driving force for positive change.
Across the board, small and midsize business owners are convinced that technology has a significant role to play in their future success. The results show how 63% of respondents have transitioned to digital, online operations in the past year. New technologies are helping small businesses grapple with issues brought on by the pandemic’s ripple effects to meet customers where they are and ultimately grow their businesses’ digital footprint.
Early signs suggest these technology investments are moving the needle in the right direction, with 65% saying that revenue generated through digital operations is now higher than before the pandemic. As small and midsize business decision makers continue to invest in technology, they’re looking toward solutions like adding or planning to add IT/technical support services (72%) and/or investing or planning to invest in application development services (68%). Additionally, 77% either added or upgraded technologies that support connectivity since the start of the pandemic, including web conferencing tools, bandwidth, and high-speed internet. Technology continues to be the driver for small and midsize businesses to drive their next phase of growth. From increased efficiency to reach revenue goals, ultimately maximizing their business strategies, small and midsize businesses are taking advantage of the solutions available to them today and seizing the opportunity to grow.
71% of small and midsized business decision makers say they are better off than one year ago, and 45% believe their business’s financial security has improved in recent months. Looking ahead, 61% say they expect their business’s financial security to get better in the coming months and 77% are expanding or considering expanding into a new market to fuel growth.
Need for help continues
While 61% say they expect their business’s financial security to get better over in the coming months, 57% of respondents say they have experienced declining sales over the past year and 69% have seen increased costs, while 61% of respondents report issues with sourcing materials due to the ongoing global supply chain crisis. As a result, 45% of small businesses have either applied for a federal grant or loan, or a private loan.
Hiring remains a priority
55% of decision makers say they have hired new employees in the past year and 51% have created new positions – yet 60% have struggled to fill open positions. And even as rates of the pandemic decline, 43% say they have had to temporarily close at some point in the past year due to an employee case of COVID-19.
Technology is driving positive change
Technology is having a huge impact on the success of small and mid-sized businesses, with 63% transitioning to digital and online operations, 73% adding or upgrading communications networking hardware, 76% offering a stipend for home internet service, and 77% have either added or upgraded technologies that support connectivity since the start of the pandemic, including high-speed internet.
Small and Midsize Business Outlook and Technology Adoption Study
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