Although small businesses have been among the hardest hit during COVID-19, a survey by Guardian Life reveals some common characteristics of small firms that are surviving and thriving during this difficult period.
“We found that despite the challenges of COVID-19, small firms’ investment in technology continues to rise, which has improved the customer experience as collaborative digital tools are increasingly being used to help employees pick and enroll in benefits,” according to Zarifa Reynolds, head of the Strategic Growth Markets & Small Business segment at Guardian. “Small businesses also expanded paid leave, telecommuting and flexible work policies that were already on the rise prior to the pandemic.”
In addition, the research confirmed that employers will maintain flexible work policies for employees, with 6 in 10 saying they will continue remote work in some capacity in the future, Reynolds added.
Also noteworthy is the number of small firms (over 50%) which said they aim to offer a better benefits package than their competitors to attract and retain talent. Notably, Reynolds pointed out, “Our survey highlights that voluntary benefit offerings continue to grow among small-business employers.”
Finally, there is a growing interest among small businesses to leverage solutions like Professional Employer Organizations (PEOs) and Individual Coverage Health Reimbursement Accounts (ICHRAs) to compete for talent while controlling costs.
Employee Well-Being Has Declined
In spite of these efforts, the survey found that the number of employees at small businesses who said they were happy appears to be declining, as is their sense of well-being. For example, those who said they were “happy or very happy at my job” dropped to 48%, down from 55% in 2019.
“We are seeing a decline in overall well-being amongst employees who work for businesses of all sizes, which is largely because of the toll that the prolonged pandemic has had on the workforce and their families,” Reynolds pointed out.
“In the case of small businesses,” she said, “they have traditionally been an attractive place to work because of their personal, close-knit workplace environment and because many of them are purpose-driven companies that foster a greater connection between the employee and the value that they provide to customers.”
However, the pandemic has created some workforce challenges that have been difficult for small businesses to address because, unlike larger organizations, they don’t have the resources and money to weather the uncertainty caused by the pandemic.
Whether it was applying for the Paycheck Protection Plan, implementing safety measures, or managing employee absences, it’s been a lot for small business owners and their employees, which has impacted employee well-being and morale, Reynolds added.
Lack Of Mental-Health Support
The survey also noted that only 36 percent of employees at small businesses said their companies offer adequate mental-health support.
“Mental-health support provided by employers to employees is low because historically businesses have not provided this benefit. We’re starting to see a shift in the workplace with more employers and employees being more open to discuss mental health and this are a positive," Reynolds said.
As a result of this, Reynolds added, there is a growing interest in employees wanting to access well-being and mental-health resources at work and employers are taking notice.
“We are now seeing that employers, both large and small, are interested in adding mental-health benefits as part of their benefit offering, which has resulted in an upward trend in mental-health solutions available for employers to provide for their employees,” she said.
Another “positive” highlighted in the survey is that minority and women-owned business enterprises demonstrate a stronger commitment to generous benefits and their employees’ financial health.
For example, more than six in 10 of these businesses agreed that they have a responsibility to ensure the financial preparedness of their employees, compared to just over half of employers overall. And when compared to all small firms overall, minority and women-owned businesses were more focused on employee well-being as it pertains to increasing benefits education (70% vs 58%), adding voluntary benefits (71% vs 52%), expanding mental-health resources (72% vs 56%) and offering flex hours/telecommuting (69% vs 58%).
One possible explanation for this is that women and minority business owners likely have an overall deeper appreciation of the role that benefits play in financial health, Reynolds said. For example, she said, 42% of women said that they’d face financial hardship if not for the benefits they received at work, compared to 32% of men.
And nearly 4 in 10 (39%) of African-Americans reported living paycheck to paycheck, compared to 27% of Caucasian Americans. “These differences may underscore why minority and women-owned businesses put a focus on benefit offerings,” Reynolds said.
The Guardian 10th Annual Workplace Benefits Study was conducted during the first quarter of 2021 and consisted of a national survey of 2,000 employee benefits decision-makers and 2,000 employees age 22 or older who work full-time or part-time for a company of at least five employees.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]