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Most Small Business Owners Avoided Layoffs and Maintained Employee Benefits Despite Profits Being Down
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As the U.S. continues to experience a labor shortage and employers struggle to fill job vacancies, small businesses are recognizing how important it is to keep good workers.
According to findings from a two-part survey released by Columbus, Ga.-based supplemental insurance company Aflac, 8 in 10 (81%) owners of small businesses (defined by the survey as those with anywhere from two to 200 employees) expressed that keeping talent was equally as crucial — or even more so — than in years prior.
Indeed, many of these owners have put their money where their mouths are. Although 45% of survey respondents experienced a dip in profits during the pandemic, 80% of businesses with decreased profits didn’t lay off workers. Further, 82% of small businesses maintained or boosted benefits for their workers.
And it turns out that diversity, equity and inclusion (DE&I) policies aren’t just a priority among larger corporations. Among the small business owners surveyed, 45% rolled out new DE&I policies.
Small businesses deepening their community involvement
It’s not just consumers who are supporting their communities and local economy, either. During the coronavirus crisis, 45% of small businesses endured a dip in profits. Still, 80% either maintained or deepened their community involvement during the pandemic regardless of the location or type of business.
Among small businesses that maintained or got more involved with their community, 83% of brick-and-mortar businesses and 75% of virtual businesses expressed this sentiment, as did 84% of combined physical storefront and virtual businesses.
Small business owners also recognized that strong relationships are often the foundation of a good business by extending their connections with their customers and team members. Despite social distancing guidelines, 3 in 4 (76%) reported they either maintained the same level of engagement with their customers or got closer to them, while 51% felt the relationship between their customers and workers had gotten better.
Consumers more likely to support small businesses that care
It also turns out that customers pay attention to small local businesses that show they care about their communities. As such, they’re more likely to give them support.
Among respondents, 83% expressed they were more likely to patronize a small business that treated its employees well. Plus, nearly as many consumers value how a business treats its workers (58%) as much as how they treat customers (62%).
Consumers are also paying attention to DE&I efforts. In fact, 6 in 10 (60%) expressed they’re more likely to spend their dollars at a business devoted to these initiatives.
Small business owners remain optimistic and resilient
Despite the challenges brought on during a period fraught with upheaval and uncertainty, small businesses have proven to be optimistic, adaptable and resilient a year and a half into the pandemic. It turns out that half of small business owners have a positive outlook, despite 37% of them experiencing decreased profits.
But how are they adapting during the pandemic? According to the Aflac survey, 1 in 5 (21%) did so by adopting or expanding new technologies, 10% curtailed business operations and 1 in 10 (9%) expanded business operations.
To stay financially afloat, employers took the following measures:
- Applied for a PPP loan: 29%
- Lowered prices: 28%
- Renegotiated contracts: 20%
- Furloughed employees: 15%
- Laid off employees: 15%
- Applied for a private loan: 14%
- Decreased salaries: 13%
There were also 28% of employers who reported doing none of the above.
Small businesses looking for funding to maintain and grow their businesses during the pandemic can look into getting SBA loans, short-term business loans or payroll loans. These types of financing could have rates, terms and repayment periods suitable for a business’s current needs.
Methodology: On May 11, 2021, Aflac commissioned KWI Communications to field an online survey of 1,905 American adults. To equally represent the U.S. population, interviews were weighted by age, gender and geographic region.
A separate online survey was fielded from May 11-27, 2021, with 776 small business owners as respondents. The small business owners are of different ages, and the businesses spanned different locations, business sizes and industries.