The Pandemic at One Year, New Research from Paychex Reveals Biggest Obstacles Facing Business Owners
The American economy, led by small and mid-size businesses, continues to face challenges as we head into the second year of widespread shutdowns caused by the COVID-19 pandemic.
New research from Paychex, Inc., the HR software and services company providing the power of simplicity to businesses managing increasingly complex workplaces, found that three of the biggest obstacles businesses face are financial instability, bringing employees back to the office, and developing a COVID-19 vaccine policy. These insights are based on the company’s latest survey of business owners, conducted January 27 – February 2, 2021, which polled 300 principals of U.S. companies with 2 to 500 employees.
The survey showed small and mid-size business owners continue to be in a precarious position financially in the wake of COVID-19. Sixty-one percent of Paycheck Protection Program (PPP) loan recipients in the survey characterize the 2021 PPP loan as important to their business's survival. Overall 56 percent of companies with 50-500 employees characterize the funds as critical to their business survival this year, up 14% from 42 percent reporting that sentiment last year.
In addition, only two in five respondents are aware of the Employee Retention Tax Credit (ERTC), which, according to the Consolidated Appropriation Act, 2021, can now be taken in combination with a PPP loan. Yet, only one in five business owners plans to claim the ERTC. Awareness and planned usage increase with company size as half of the mid-sized businesses will claim the ERTC.
Planning the Return to the Office
Amid this financial instability, to help maintain customer loyalty, many businesses are carefully coordinating a plan for employees’ safe return. 55 percent of small and mid-size companies surveyed remain at least partially remote, while only 12 percent say that some or all of their workforce will permanently work at least part of the time remotely following the pandemic. More than 40 percent of small and mid-size businesses are still working out the details of bringing employees back to the workplace.
Employer Vaccine Policies
An essential step in getting employees safely back to the workplace will be vaccination. Many business leaders see themselves having a role in employee vaccination. 75 percent of small business owners (10-49 employees) and 85 percent of mid-sized businesses (50-500 employees) plan to motivate their employees to get the COVID-19 vaccine. 25 percent of all survey respondents expressed concerns around potential legal liabilities if they were to incentivize employee vaccination.
“From the financial toll COVID-19 has taken on businesses, to the confusion around returning employees to the office, and what to consider when building a vaccination policy, business owners are facing a level of complexity never seen before,” said Mike Trabold, Paychex director of compliance risk. “That’s why we’ve created educational resources addressing a spectrum of new challenges. Whether it’s a full shutdown, seeking funds to keep doors open, struggling to manage a remote workforce, or hiring to meet new and unexpected demands, we’ll continue to guide business owners through the difficulties identified in this research.”
How Paychex is Helping
Paychex has taken a leadership role in helping businesses navigate the COVID-19 pandemic with its comprehensive COVID-19 Help Center, extensive HR support for clients, and application enhancements to address pandemic-related challenges. Paychex continues to build on its Paychex Flex® PPP solutions in real-time as new government regulations pass. These include a forgiveness estimator that forecasts payroll costs and considers non-payroll cost inputs and creating a signature-ready loan forgiveness application to simplify the loan forgiveness process. To date, Paychex has helped its customers quickly apply for and receive $30 billion in loans.
Additionally, the experienced HR professionals at Paychex develop and deliver effective HR recommendations based on the client's unique circumstances and business needs, helping them navigate unique new challenges like bringing employees back to the office and creating a vaccination policy.
Paychex’s COVID-19 Help Center offers comprehensive support to help businesses through every phase of the COVID-19 pandemic, from solidifying finances to decoding how new regulations impact employees. Resources include a map through which users can access webinars, checklists, articles specific to their state regarding guidance on reopening, paid leave laws, furloughs and layoffs, out-of-state travel restrictions, and more. The Help Center, which is available to all businesses, includes reopening guidelines to help companies resume operations with confidence, including detailed information about staffing, workplace safety, and privacy considerations.
Business owners can also access COVID-19 vaccine FAQs, for more information specific to building a workplace vaccination policy.
About the Paychex Business Survey
As part of a COVID-19 business survey series, Paychex polled 300 randomly selected business owners with 2-500 employees. The survey was fielded January 27 – February 2, 2021. It was administered online by Bredin, a third-party research firm, and yielded a +/- 5.66% margin of error.
Disclaimer: The data cited in this news release represents the opinions of the survey respondents and not those of Paychex or its employees.
Note: The information contained within is not tax or legal advice. These issues are complex and applicability depends on individual circumstances. Businesses should consult tax or legal counsel before acting on any of the items identified above.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 45 years of industry expertise, Paychex serves more than 680,000 payroll clients as of May 31, 2020 across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting paychex.com and stay connected on Twitter and LinkedIn.