The American economy, led by small and mid-size businesses, continues to face challenges as we head into the second year of widespread shutdowns caused by the COVID-19 pandemic.
Business owners weigh in on the importance of the new round of Paycheck Protection Program loans to the survival of their business.
New research from Paychex, Inc., the HR software and services company providing the power of simplicity to businesses managing increasingly complex workplaces, found that three of the biggest obstacles businesses face are financial instability, bringing employees back to the office, and developing a COVID-19 vaccine policy. These insights are based on the company’s latest survey of business owners, conducted January 27 – February 2, 2021, which polled 300 principals of U.S. companies with 2 to 500 employees.
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Financial Instability
The survey showed small and mid-size business owners continue to be in a precarious position financially in the wake of COVID-19. Sixty-one percent of Paycheck Protection Program (PPP) loan recipients in the survey characterize the 2021 PPP loan as important to their business’s survival. Overall 56 percent of companies with 50-500 employees characterize the funds as critical to their business survival this year, up 14% from 42 percent reporting that sentiment last year.
In addition, only two in five respondents are aware of the Employee Retention Tax Credit (ERTC), which, according to the Consolidated Appropriation Act, 2021, can now be taken in combination with a PPP loan. Yet, only one in five business owners plans to claim the ERTC. Awareness and planned usage increase with company size as half of the mid-sized businesses will claim the ERTC.
Planning the Return to the Office
Amid this financial instability, to help maintain customer loyalty, many businesses are carefully coordinating a plan for employees’ safe return. 55 percent of small and mid-size companies surveyed remain at least partially remote, while only 12 percent say that some or all of their workforce will permanently work at least part of the time remotely following the pandemic. More than 40 percent of small and mid-size businesses are still working out the details of bringing employees back to the workplace.
Employer Vaccine Policies
An essential step in getting employees safely back to the workplace will be vaccination. Many business leaders see themselves having a role in employee vaccination. 75 percent of small business owners (10-49 employees) and 85 percent of mid-sized businesses (50-500 employees) plan to motivate their employees to get the COVID-19 vaccine. 25 percent of all survey respondents expressed concerns around potential legal liabilities if they were to incentivize employee vaccination.
“From the financial toll COVID-19 has taken on businesses, to the confusion around returning employees to the office, and what to consider when building a vaccination policy, business owners are facing a level of complexity never seen before,” said Mike Trabold, Paychex director of compliance risk. “That’s why we’ve created educational resources addressing a spectrum of new challenges. Whether it’s a full shutdown, seeking funds to keep doors open, struggling to manage a remote workforce, or hiring to meet new and unexpected demands, we’ll continue to guide business owners through the difficulties identified in this research.”
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How Paychex is Helping
Paychex has taken a leadership role in helping businesses navigate the COVID-19 pandemic with its comprehensive COVID-19 Help Center, extensive HR support for clients, and application enhancements to address pandemic-related challenges. Paychex continues to build on its Paychex Flex® PPP solutions in real-time as new government regulations pass. These include a forgiveness estimator that forecasts payroll costs and considers non-payroll cost inputs and creating a signature-ready loan forgiveness application to simplify the loan forgiveness process. To date, Paychex has helped its customers quickly apply for and receive $30 billion in loans.
Additionally, the experienced HR professionals at Paychex develop and deliver effective HR recommendations based on the client’s unique circumstances and business needs, helping them navigate unique new challenges like bringing employees back to the office and creating a vaccination policy.
Paychex’s COVID-19 Help Center offers comprehensive support to help businesses through every phase of the COVID-19 pandemic, from solidifying finances to decoding how new regulations impact employees. Resources include a map through which users can access webinars, checklists, articles specific to their state regarding guidance on reopening, paid leave laws, furloughs and layoffs, out-of-state travel restrictions, and more. The Help Center, which is available to all businesses, includes reopening guidelines to help companies resume operations with confidence, including detailed information about staffing, workplace safety, and privacy considerations.