- A majority (60%) of the more than 500 small and midsize business leaders surveyed by The Harris Poll and HR services firm TriNet said they had reduced their workforce in some capacity during the COVID-19 pandemic, including layoffs, furloughs and reducing employee hours.
- Additionally, 83% of respondents said they experienced decreased revenue since February, with nearly 1 in 4 seeing revenue declines of more than 50%. Another portion of respondents (31%) said the uncertainty of knowing when the situation will return to "normal" is their biggest challenge.
- However, 64% of respondents said they expect their businesses to emerge either stronger than or the same as they were prior to the pandemic, TriNet said. Eighty-eight percent said their businesses amended or created business continuity plans for functions ranging from remote work and employee communication to risk assessment, sick leave policies and healthcare coverage.
The pandemic presents a "once-in-a-generation crisis" for U.S. small businesses, academic researchers said in an April working paper published by the National Bureau of Economic Researchers. The researchers concluded, based on the results of a survey of small businesses, that such firms had little cash on hand, potentially leading them to dramatically cut expenses, take on additional debt or declare bankruptcy.
Younger workers are more likely to be impacted by small-business layoffs in recent months, a May report by HR software company Gusto found. Workers under the age of 25 experienced a rate of layoffs that was 93% higher than those ages 35 and older, the report added, with most of these occurring in the tourism industry.
Small and midsize businesses have been at the center of private and public efforts to cushion COVID-19's economic and other impacts. One such program, supported by the U.S. Hispanic Chamber of Commerce and Wells Fargo, allows entrepreneurs to participate in training on developing business plans, streamlining operations and financial planning, among other topics.
At the federal level, the Coronavirus Aid, Relief, and Economic Security Act provided small businesses and nonprofits with 500 or fewer employees almost $350 billion in partially forgivable loans, while the Families First Coronavirus Response Act (FFCRA) targeted employees of small and midsize firms directly, expanding paid leave to those impacted by COVID-19. The FFCRA also outlined exemptions for small businesses impacted by these requirements, while both laws detailed tax credits available to employers required to provide the leave.
The labor market may be undergoing unprecedented change in the current environment, but employers also have the opportunity to support their employees, which could impact retention down the line. A survey last month by The Harris Poll found that 78% of employed U.S. adults wouldn't consider a job change during the pandemic. But most workers said that a poor employer response might prompt them to consider doing so if they felt their current employer was not doing enough to protect employees.