With many small businesses expecting the coronavirus pandemic to impact revenue, some business owners are tuning in on strategies to keep their payroll costs from growing.
Automated payroll company OnPay surveyed business owners and managers, as well as general employees, to gauge how the small business community is adapting to the widespread changes sparked by the pandemic.
While a majority of respondents believe that business will recover and that normalcy is on the horizon, employees may very well be bringing home smaller paychecks in the interim.
Weighing the toll of the pandemic
When the survey was conducted in early June, only 12% of small businesses reported that work operations were normal. And although 62% of small business owners believed their companies would be operating normally by the end of the year, it’s little surprise that fewer predicted near-term revenue growth.
Among those surveyed, 43% expected to see an increase in annual revenue this year, marking a substantial drop from the 69% of business owners who expected annual revenue to grow last year.
In response to lower gross income expectations, companies are looking at ways to cut costs. Among those surveyed …
- Half of small businesses (50%) said they had paused their hiring of new employees
- More than a third (36%) reported a pause in performance-based promotions and/or salary increases
- More than one-fourth (28%) said they had either delayed or eliminated their regular cost-of-living salary increases
- Only 29% of the small businesses covered in the survey had kept their entire workforce since the pandemic began
Employees have continuing concerns
With all of the uncertainty unleashed by the COVID-19 crisis, many employees are understandably worried about job security. Throughout the pandemic, job stability and similar financial concerns have plagued workers of all income levels.
Results from this latest survey showed nearly half of employees were worried about being furloughed or laid off within the coming six months.
Their concerns may be well-founded. When asked how they and their fellow co-workers have fared throughout the pandemic, 54% of respondents said they or colleagues at their company were making less money due to a layoff, a furlough or other lost wages.
Despite the challenging environment small businesses find themselves in, both business owners and employees believe companies are dealing with the situation as best as they can.
A strong majority of employers (70%) said they believe they’ve taken good care of their employees since the pandemic started, and more than three-quarters of employees (78%) agreed.
For the most part, employee benefits have remained intact, according to the survey. Fewer than a quarter of small businesses have cut back on benefits like health insurance, for example. In fact, some companies have made policy changes to better protect their workers during the pandemic.
On top of that, businesses have helped employees reduce their risk of contracting COVID-19 by letting them work from home. Before the pandemic, 44% of small businesses had work-from-home policies for some or all employees. Now, nearly 65% of small business owners and managers said they will let employees work remotely, even after the outbreak ends.
Methodology: OnPay surveyed 1,058 managers and owners, along with 1,015 employees, of small businesses (those with 1 to 500 employees) June 2-9.