In a survey released this week, half of US small business owners said they cannot afford to pay employees for a full month amid the economic lockdown caused by coronavirus disease 2019, with 1 in 5 also noting their inability to afford wages for a week or less.
In a survey released this week by the Society for Human Resource Management (SHRM), half of US small business owners said they cannot afford to pay employees for a full month amid the economic lockdown caused by coronavirus disease 2019 (COVID-19), with 1 in 5 also noting their inability to afford wages for a week or less.
The forced closure of all nonessential businesses in almost every state has caused numerous large employers to enact their own distinct approach to optimizing employee coverage during the crisis, but what are the consequences for small businesses and employees who do not have the security blanket to absorb this financial loss?
SHRM sought to examine the implications for these groups, surveying 492 working Americans through the Amerispeak Omnibus survey and 512 small business owners (owners, operators, leaders, or chief executives of businesses with 2-99 employees) sourced through PureSpectrum. Additionally, 518 human resources (HR) professionals participated in the survey.
Among US workers, 1 in 5 stated in the survey that they will be unable to meet their financial needs (paying rent, buying groceries, paying bills) within 1 week or less, a troubling figure that increases to 58% of workers in 1 month or less. Workers at the highest risk of financial burden were physical-type workers, who were more at risk of being unable to meet financial needs at 1 month (72%) potentially due to the inability to perform their jobs remotely.
This increased risk was reported by small businesses as well, with 27% of service-type businesses expecting to lose more than 30% of their revenue. Overall, more than half expect revenue losses ranging from 10% to 30%, 1 in 5 expect to lose more than 30% of their revenue, and 4% expect total loss of revenue and closure.
When asking HR professionals on their respective businesses’ potential revenue losses, more than half (55%) said their organizations expect losses of 10% to 30%, with 1 in 5 stating they expect above 30%.
To impede the severity of financial burden, 97% of SHRM-member HR professionals stated to have discussed preparedness for COVID-19 and 80% already have a formal or informal business continuity plan in place. In an interview with The American Journal of Managed Care®, Stephanie O’Reilly, SHRM-SCP, vice president of HR for Precision for Medicine, discussed factors to consider when working remotely and what strategies have been implemented to optimize workflow amid the pandemic.
“Communication becomes more planned or thought out as you can’t just pop by an office,” said O’Reilly. “Technology has been a huge asset to be able to email, [instant message], video conference, and pick up the phone. Managers have to think differently about how they interact with staff members and they need to be more mindful about checking in, coaching, and building teams.”
The importance of technology cannot be understated, as O’Reilly notes that for workers to perform their jobs, they need the right tools to do so. In addition to providing ample tools to execute tasks from home, her organization has published guidance and policies for employees working from home, developed a special site for all employees to access information related to COVID-19, and provided additional resources for families and employees. “Managers have been sent brief articles to help them navigate through leading teams that are remote based….We are encouraging all to ensure we check in on each other,” said O’Reilly.
As businesses remain closed amid the pandemic, flexibility is the key now and in the future, noted O’Reilly. “Flexibility with time and understanding that employees may need to work nontraditional hours to balance family and work demands is needed.”