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 the tech-savvy workforce needed to make it all happen, according to a new survey conducted by The Harris Poll for CIT Group Inc.
The survey found that most small and midsized businesses managed to stay open when the pandemic hit (89 percent small business [SB], 97 percent middle market [MM]).
But that often meant working in a limited capacity with reduced hours, offerings or workforce (47 percent SB, 62 percent MM), as safety concerns and lockdowns are likely among the factors preventing normal operations.
Compared to a year ago, significantly more middle-market businesses strongly agree that continuous technological investment is a business need (61 percent vs. 47 percent in 2019). That conviction is also strong in the small business community, where 81 percent agree technological investment is an ongoing business requirement, the survey found.
"The resiliency and flexibility that technology can deliver to midsized and small businesses has been proven convincingly by the COVID-19 outbreak," said David Harnisch, President of CIT's Commercial Finance division.
"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'," he added.
Tech Investments – Before and After
Most executives wish that they'd invested more in technology over the past 12 months (68 percent SB, 94 percent MM). In fact, more than 3 in 4 middle market executives (76 percent) believe investments in technology would have helped their company fare better during the pandemic. For small businesses, roughly half felt similarly (46 percent).
At this point, however, there's little question about how important technology will be in the business world going forward, with large majorities of small and midsized business executives saying tech is key to their survival (79 percent SB, 92 percent MM).
And they seem determined not to repeat the mistake of under-investing. Virtually all are planning to invest as much or more in their business over the next 12 months as compared to the past year (84 percent of SB and MM combined). However, only 15 percent of small businesses say they plan to invest less this coming year, which may be due to financial constraints resulting from the pandemic, the survey found.
"Small businesses don't always have the financial resources that larger enterprises often enjoy," said Ken Martin, Managing Director of CIT's Small Business Solutions group. "In cases where investments are imperative, borrowing or leasing may be the right solution to acquiring the technology needed to remain competitive."
Making it Easier to Work Remotely
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 7 in 10 middle market executives (71 percent) and nearly a third of small business leaders (31 percent) 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," said Denise Menelly, CIT's Executive Vice President and Head of Technology and Operations. "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 percent)—and want (25 percent)—this change to remain permanent after COVID-19 subsides, with about 40 percent of middle market executives that made the change expecting (43 percent) and wanting (42 percent) the same thing.
Among those who can operate with remote employees, about half of small business executives (53 percent) and more than three-quarters of middle market executives (76 percent) 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 percent) strongly agree that having the ability for their employees to work remotely would help them grow their company, compared to only 37 percent who said the same in 2019.
Valuing a Tech-Savvy Workforce
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 percent SB, 85 percent MM). While most believe their current workforce is tech-savvy enough to keep up with digital transformation (82 percent SB, 90 percent MM), businesses are substantially more likely than last year to say companies need to focus on hiring tech-savvy talent (79 percent SB in 2020 vs. 69 percent in 2019; 94 percent MM in 2020 vs. 83 percent in 2019).
The CIT-sponsored survey of leaders at U.S. middle-market and small businesses was designed to illuminate the intersection of technology and talent – two of the most important factors driving today's businesses. It is the second year that CIT has worked with The Harris Poll to sponsor the survey and release the findings.