Businesses are adapting by making major changes to their operations including increased use of technology during the COVID-19 pandemic, according to the latest semi-annual survey of small- and mid-size business owners and executives by PNC, which is based in Pennsylvania with local headquarters in Troy.
Eight in 10 (79 percent) reported that they have made adaptations to their business in response to COVID-19, including safety changes (69 percent) in the form of new policies and procedures (62 percent) or physical modifications (57 percent), while others have adopted work-from-home policies (33 percent).
“Business owners have learned that the previous status quo won’t work now,” says Gus Faucher, chief economist at PNC. The majority of businesses have reconfigured their operations and for many, these changes will be permanent. Their confidence may be shaken, but we know through the history of this survey that business owners are resilient and they know how to adapt to change.”
According to the survey, 51 percent of businesses report increased use of technology since the outbreak began. A third have increased technology to improve workforce productivity. Nearly three in 10 (29 percent) have added or increased the use of electronic or touchless payment systems, electronic /website-enabled sales (23 percent) or electronic banking/cash flow management services (21 percent); 19 percent increased use of fraud/identity protection tools.
The pandemic has forced many to shake up their product lineups to better align with consumers’ new habits, according to the survey results. A third of business owners report making product-related changes, either in the way they sell or deliver their products and services (31 percent) or to the types of products and services they offer (13 percent).
The drop in business activity over recent months forced many to take drastic measures through workforce reductions; nearly four in 10 businesses have cut workers since the start of the pandemic, although for 87 percent of those, the decrease is considered temporary or a furlough. Fifty-eight percent of the businesses who had temporary layoffs or furloughs already have begun re-hiring.
Faucher says the worst may be over and economic activity is on the rebound, but the “new normal” doesn’t mean a return to robust job and business growth that existed early in 2020.
“After job losses of more than 22 million between February and April, by far the steepest employment downturn in history, the labor market has started to recover,” says Faucher. “The economy has added back nearly one-half of those lost jobs, but job growth will slow going forward. Unemployment will remain elevated for years to come as business owners continue to deal with the impacts of the pandemic.”
He added that technology may be the key to business survival, and the PNC survey showed that many owners are making the necessary investments.
Other key survey findings include:
Nearly all who applied for a Paycheck Protection Program loan consider the funding important (97 percent), and nearly seven in 10 say it is extremely important.
Economic optimism dropped from half in the spring of 2020 to 21 percent in September., one of the sharpest drops in the history of the survey.
Election Edification: Among those business owners expressing a partisan preference in the upcoming presidential election, Donald Trump supporters believe more strongly than Joe Biden supporters (76 percent vs. 49 percent) that their candidate of choice would have a positive impact on their own business if elected to the office.
A full survey report is available here.