The Market Sentiment Survey conducted by Greenshades in October revealed many market challenges plaguing small to medium-sized businesses as the end of the year approaches. After a turbulent year filled with rising costs, supply chain shortages, and high employee turnover, it is no surprise that inflation and recruiting and retention are the top concerns for organizations as they close out 2022.
“As the cost of utilities and supplies continue to rise, and as unemployment remains at or near historic lows, this winter could prove more challenging than usual for small businesses,” stated Andrew Roe, Chief Revenue Officer for Greenshades Software. “Fortunately, most employers also recognize that continued investment in technology has the potential to both improve operating efficiency and blunt the impact of these unprecedented challenges.”
Understanding the Market
Greenshades launched a survey initiative at the beginning of the year to better understand what challenges face most small to medium-sized businesses in today’s economy. For the past two quarters, Greenshades issued a questionnaire to the community to gain insight into business and operational topics that are top of mind for organizations.
This quarter, Greenshades’ survey returned approximately 370 responses, with individuals providing thoughts about their organization’s tech spending, key market concerns, and satisfaction with Year-End Forms processing.
Today’s Market and Key Concerns for Businesses
To understand the biggest concerns for businesses, Greenshades asked participants to select what they felt was their organization’s biggest challenge. Answering the question “what market conditions keep you up at night,” participants selected from a list of current topics.
The top concerns were inflation (37%) and recruiting and retention (34%). However, compliance (11.17%) and supply chain disruptions (8.45%) were just slightly behind.
Inflation ranked as the number one pain point in the Greenshades Q3 market sentiment survey conducted over the summer, indicating that organizations are still struggling to find answers to the inflation rate that has remained in the 8% range for most of this year.
Across all markets, inflation has raised costs for most companies. In a survey conducted by Business.org, 92% of business owners reported an increase in the cost of running their business, with a majority indicating that their spending increased by 20% or morei.
It was also no surprise to see recruiting and retention selected as the other main challenge by survey respondents. Finding and keeping top talent has been difficult for businesses across the US in recent years. In 2021, an average of 3.98 million workers left their jobs every monthii. That trend has continued into the current year, as the quits rate stood at 2.7% in September 2022iii.
Businesses Recognize the Opportunities of Technology
To understand more about the impact of technology on businesses, Greenshades’ survey included the question, “what is the status of your organization’s 2023 technology budget?”
The results showed that organizations genuinely recognize the importance of tech in their everyday processes, with a majority of respondents (58%) indicating that their business’s technology budget would either stay the same or increase in the next year.
Technology has provided companies with challenges and growth opportunities in the past few years as advancements have driven change in business and consumer behaviors. With the world increasingly engaging online, organizations are working to advance or pivot their products and services into the digital space.
Harnessing Tech to Decrease Employee Turnover
The survey results revealed that employers also understand how investments in technology can be vital to finding and keeping top talent. Of the respondents that indicated they are concerned about the challenge of recruiting and retention, 68% plan to maintain or increase their tech budget in 2023.
“Since the pandemic, employers have been steadily investing in technology to improve operations and contend with changing business demands,” stated Roe. “As the country enters into more economic uncertainty, it’s encouraging to see many employers again investing in solutions that will help them gain agility and scale.”
Interestingly, a recent small business study revealed that when a business embraces technology and advances its products and services accordingly, they are more likely to see significant gains in multiple facets of the company. Businesses that harness technology generally see:
- Increases in revenue
- A higher capacity to create new jobs
- An improved chance to reach new marketsiv
Overall, many companies recognize that technology provides a chance to improve not only their product or service for consumers but also the experience of their employees.
Finishing the Year Strong
The year-end is a big challenge for any business, as organizations calculate, validate, and file taxes to regulatory agencies. To understand how companies are currently handling the process, Greenshades asked, “how does your organization process year-end taxes and forms.” Most respondents indicated their business had automated the process (61%), but some still handle it manually (19%).
To further understand the impact of the YEF process, respondents were asked to indicate their satisfaction with their current process by rating it on a scale from 1 (very dissatisfied) to 5 (very satisfied).
Most of those dissatisfied with YEF processing are handling it manually, clearly indicating that year-end challenges can be amplified when an organization’s process is inefficient or cumbersome. An ineffective process can be exceptionally frustrating because the consequences of missing year-end filing deadlines can be costly, resulting in:
- Having to pay fines or penalties
- Damage to the company’s reputation
- A decrease in employee trust and morale
Greenshades has been focused on creating a streamlined and simplified year-end process to give any small or medium-sized business an advantage, and it is for a good reason. Utilizing a provider that automates the year-end process can help avoid delays, navigate complex regulation changes, and even help identify errors before forms are submitted.
Overall, Greenshades Q4 Market Sentiment Survey revealed that businesses face some tough challenges in the upcoming year. However, many companies recognize the value of harnessing technology to ease the burden.
Download the full infographic here:
What’s Next?
From now through the end of the year, Greenshades will host a series of webinars aimed at helping employers gain a deeper understanding of the year-end forms process and learn more about the coming challenges and opportunities they’ll likely encounter in 2023.
To register for these webinars or to join the Greenshades mailing list so you can gain access to future reports and similar content, visit www.greenshades.com.
References:
i Wheelwright, Trevor." The Effects of Inflation on US Small Businesses." Business.org. July14, 2022. https://www.business.org/finance/accounting /effects-of-inflation-on-small-businesses/.
ii Flynn, Jack. "20Stunning Great Resignation Statistics [2022]: Why Are Americans Leaving Their Jobs?" Zippia.org. October 2, 2022. https://www.zippia.com/advice/ great-resignation-statistics/#:~:text=On%20average%2C%204% 20million%20Americans,4.5%20million%20quit%20their%20jobs.
iii "Table 4. Quits levels and rates by industry and region, seasonally adjusted." U.S. Bureau of Labor Statistics. JOLTS, November 1, 2022. https://www.bls.gov/news.release/jolts.t04.htm.
iv O’Mahony, John, and Sara Ma. Small business technology trends. Deloitte & Google, 2018. https://www2.deloitte.com/content/dam/ Deloitte/us/Documents/technology-media-telecommunications /us-tmt-connected-small-businesses-Jan2018.pdf.
