The New Normal for Small Businesses: Owners and Employees Feel Both Uncertainty and Optimism

OnPay survey data indicates 1 in 2 small businesses turned to the Payroll Protection Program for assistance

As more states reopen after lifting COVID-19 shelter-in-place orders, 62% of small business owners believe their businesses will return to normal this year, according to new survey data from payroll and HR technology provider OnPay. Sixty-six percent of small business employees are also optimistic about things returning to normal this year.

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“This survey confirms what we’re seeing from our 10,000 plus payroll, HR, and benefits clients”

Even so, that sense of normalcy comes with some uncertainty. According to OnPay’s State of Small Businesses in 2020 survey of more than 2000 owners and employees, small business owners reported that they are 38% less likely to expect an increase in revenue this year compared to last year. Their employees are also concerned about what comes next. Nearly half say they’re worried that they’ll be furloughed or laid off in the next six months as a result of the pandemic. Only 47% of employees report working at a company where no workers have lost jobs or wages as a result of COVID-19.

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In addition to downsizing their workforce, small business owners have taken a variety of steps to respond to the crisis. One in two received a loan through the Paycheck Protection Program, while one in three has used the Social Security tax deferrals offered through the CARES Act. They’re also cutting back on making moves that increase payroll costs:

  • 50% of small businesses have stopped hiring new employees
  • 36% have paused regular performance-based promotions and/or wage increases
  • 28% have postponed or eliminated regular cost-of-living-based wage increases

Despite taking these measures, employers and employees generally agree that they’re doing a good job of weathering the storm. Seventy percent of employers believe they’ve been able to take care of employees well during the outbreak, and 78% of employees agree. Two-thirds of employees say their benefits haven’t changed from pre-pandemic levels, and only 9% of businesses have had to cut back on health insurance for employees.

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