Read articles about finances, saving and community news.
Access all the commercial banking resources your business needs to succeed.
by Emily Payne
July 16, 2020
by Emily Payne
July 16, 2020
Small business owners are optimistic about when business will pick up, according to recent OnPay surveys, which showed more than half of respondents expecting things to be "back to normal" this year.
OnPay, a payroll software firm, said it surveyed a panel of 1,058 managers and owners of U.S. small businesses that have between one and 500 employees. OnPay said it also surveyed a panel of 1015 employees at small businesses in the U.S. The surveys were taken June 2 and June 9, when several parts of the country were experiencing either an uptick or decline in COVID-19 cases.
"This survey confirms what we're seeing from our 10,000 plus payroll, HR, and benefits clients," said Mark McKee, president & COO at OnPay. "Small businesses are hanging in there, but there's definitely a sense that things are different now. Along with all the new challenges, we're also seeing some bright spots. Employees report they're pleased with the way employers have navigated the pandemic, and new technology is making remote work easier so employers can keep their teams safe. Small business owners tend to be determined and optimistic, so they're finding ways to adapt to their new normal."
Looking at the impact from the virus, the research indicates that the average small business laid off or furloughed 27% of its workforce. Only 29% of small businesses report retaining their entire workforce, according to the report. But of those who remain on the job, less than a quarter of employees say their employer has cut back on benefits.
Overall, 43% of small businesses expect an increase in revenue in 2020, compared to 69% in OnPay's 2019 study. This year, 32% of small businesses expect a decrease in revenue, versus just 4% last year.
Bigger businesses are much more likely to expect a significant increase in revenue. They are also more likely to think they're taking care of employees well, and they are less likely to reduce employee pay or benefits.
Researchers found there was general optimism about being able to get back to business soon, noting that 62% of small businesses expect things will be back to normal by the end of the year. Almost a third said it would be 2021. Just 4% say things will never be back to normal, according to the survey results.
The 2020 revenue and "back to normal" outlooks for businesses that allow working from home are slightly higher than the outlooks of businesses that have kept their employees on site. None of the small business owners who were forced to close their businesses, on a temporary or permanent basis, allowed their employees to work from home, according to the study.
Business owners who participated in the federal government's Paycheck Protection Program and those who didn't have very similar outlooks on expected 2020 revenue and when things would return to normal, the report said. Notably, businesses that received relief loans weren't much more likely to retain employees, the report said.
PPP recipients only stood apart from the pack in a few ways, including that they were 14% more likely to continue hiring new employees through the COVID-19 outbreak.
The employee survey found that more than half reported that they or others at their company are earning less income due to a layoff, furlough or lost wages. Specifically, 16% of small business employees report being laid off as a result of COVID-19. Going forward, nearly half said they're worried that they'll be furloughed or laid off in the next six months.
Despite these setbacks, there are areas of agreement. Seventy percent of employers believe they've been able to take good care of their employees during the outbreak, and 78% of employees agree.
Many businesses have successfully implemented work-from-home policies. Before the outbreak, 44% of small businesses allowed some or all employees to work from home. Now, almost 65% say they'll offer a work from home policy after the outbreak is over.
Is your business looking for a true banking partner? Check out the solutions we offer that can help you reach your goals.