For middle-market and small businesses, the COVID-19 pandemic is highlighting the vital importance of investing in new technology, facilitating remote work and maintaining tech-savvy workforces, according to a new survey conducted by The Harris Poll for CIT.
The survey found that most small and mid-sized businesses managed to stay open when the pandemic hit (89% small business, 97% middle market), but that often meant working in a limited capacity with reduced hours, offerings or workforce (47% small business, 62% middle market), as safety concerns and lockdowns were likely among the factors preventing normal operations.
Compared with a year ago, more middle market businesses strongly agree that continuous technological investment is a business need (61% vs. 47% in 2019). That conviction is also strong in the small business community, where 81% agree technological investment is an ongoing business requirement.
“The resiliency and flexibility that technology can deliver to mid-sized and small businesses has been proven convincingly by the COVID-19 outbreak,” David Harnisch, president of CIT’s commercial finance division, said. “These survey results further demonstrate that business leaders have taken that lesson to heart and are focused on making technology a fundamental part of their ‘tomorrow thinking.'”
Most executives wish that they’d invested more in technology over the past 12 months (68% small business, 94% middle market). In fact, more than three in four middle market executives (76%) believe investments in technology would have helped their company fare better during the pandemic. For small businesses, roughly half felt similarly (46%).
At this point, however, there’s little question about how important technology will be in the business world going forward, with the majority of small and mid-sized business executives saying tech is key to their survival (79% small business, 92% middle market).
Virtually all responding businesses are planning to invest as much or more in their business over the next 12 months as compared with the past year (84% of small business and middle market respondents combined). However, only 15% of small businesses say they plan to invest less this coming year, which may be due to financial constraints resulting from the pandemic.
“Small businesses don’t always have the financial resources that larger enterprises often enjoy,” Ken Martin, managing director of CIT’s small business solutions group, said. “In cases where investments are imperative, borrowing or leasing may be the right solution to acquiring the technology needed to remain competitive.”
When it comes to tech upgrades, investments that make it easier for employees to work from outside the office are a clear priority. Over the next 12 months, about seven in 10 middle market executives (71%) and nearly a third of small business leaders (31%) who plan to invest will spend on technology that facilitates remote work.
“Reliable remote work capability is essential for today’s businesses, large or small,” Denise Menelly, CIT’s executive vice president and head of technology and operations, said. “It’s not just a matter of convenience. Businesses that empower employees to work remotely have a clear competitive advantage over those who don’t.”
Once these remote working capabilities are upgraded, they’re likely to remain a common facet of many workplaces even after the pandemic. Approximately a quarter of small businesses that transitioned employees to working remotely to stay open during the pandemic expect (28%) and want (25%) this change to remain permanent after COVID-19 subsides, with about 40% of middle market executives that made the change expecting (43%) and wanting (42%) the same thing.
Among those who can operate with remote employees, about half of small business executives (53%) and more than three quarters of middle market executives (76%) say their companies plan to allow employees to regularly work remotely on a permanent basis after the pandemic subsides.
More than half of middle market executives (53%) strongly agree that having the ability for their employees to work remotely would help them grow their company compared with only 37% who said the same in 2019.
These trends are putting a premium on a tech-savvy workforce, which is needed more than ever to leverage technology both to support customers and to collaborate with colleagues.
A majority of executives see retaining employees as critical to business survival (86% small business, 85% middle market). While most believe their current workforce is tech-savvy enough to keep up with digital transformation (82% small business, 90% middle market), businesses are substantially more likely than last year to say companies need to focus on hiring tech-savvy talent (79% small business in 2020 vs. 69% in 2019; 94% middle market in 2020 vs. 83% in 2019).
This is the second year that CIT has worked with The Harris Poll to sponsor this survey and release the findings.