Small and Medium Businesses (SMBs) were among the most impacted by the pandemic. While large corporations saw their share price decline and even get caught unable to cater to demands due to supply chain constraints, the SMBs had their own battle to contend with.
The pandemic showed them the need to be resilient and a new survey shows they are getting there faster than previously anticipated. The fifth edition of the “Small and Medium Business Trends” report shows how SMBs are deepening their trust with customers and employees. The report based on responses from more than 2,500 SMB owners and leaders paints a true picture of an industry preparing to fight the pandemic and stay competitive after the pandemic.
Insights from 2,500+ small and medium business owners and leaders worldwide
The Salesforce Small and Medium Business Trends report is an annual report that draws insights from small and medium business owners and leaders worldwide. For the fifth edition of the report, Salesforce analysed the responses of more than 2,500 SMB owners and leaders around the world to determine how SMBs have drawn support from local communities and are using technology to grow.
The survey was conducted online on behalf of Salesforce between June 21st, 2021 and July 12th, 2021. The responses from 2,354 SMB owners and leaders of age 18 years or older in North America, Latin America, South America, Europe, and Asia Pacific, were analysed to draw conclusions. The participants were employed full time, part-time, or self-employed, and owners or senior executives at businesses with 2–200 employees and annual revenue of less than $1 billion or the local equivalent.
SMBs prioritise customer and employee engagement
One of the big revelations from the report is how SMBs are putting more resources towards customer and employee engagement. The report shows that nearly one in five SMBs furloughed employees during the pandemic, but nearly 49 per cent of them have rehired those they furloughed.
The report further shows that growing businesses are more likely to have rehired furloughed employees than stagnant or declining SMBs. Workforce changes during the pandemic also saw more than two in five SMBs offer flexible working arrangements to employees. The report shows that 15 per cent of growing SMBs and 13 per cent of stagnant or declining SMBs gave employees a zero-hour schedule.
“We believe this trend of providing more flexibility to employees will continue as we see more and more companies adopting a ‘work from anywhere’ mindset. With more people working from home, companies need a digital infrastructure that supports that. A lot of companies have become more dependent on digital channels, not only to serve their customers, but also to serve their employees,” says Michiel van Vlimmeren, Senior VP & General Manager at Salesforce Netherlands.
During the pandemic, SMBs also introduced changes to employee benefits. The report notes that the majority of SMBs have held their benefits steady during the pandemic while stagnant or declining SMBs had to reduce their perks. In a nutshell, the report shows that 12 per cent of the SMBs expanded benefits while 58 per cent held them steady.
” The pandemic certainly increased the awareness that employees are the number one stakeholders for organisations and that as employers they need to create an environment for greater employee commitment and engagement,” adds van Vlimmeren.
As the pandemic continues, SMBs are seeing their employees voice expectations for new safety measures at work. The top five employee expectations were flexible schedules, mask usage at work, daily sanitisation of workplaces/materials, social distancing at work and the ability to work remotely.
Earning employee trust takes precedent
After layoffs and furloughs due to the pandemic, SMBs are taking actions to win back employee trust. They are now communicating transparently, responding to personal needs, asking for feedback and leading with empathy in a significant change to employee engagement.
The report largely shows that SMBs could not have avoided the need to lay off or furlough employees but SMBs do acknowledge the government and community that helped them stay afloat. “SMB’s were struggling to maintain their revenue, that is very clear. The study showed that almost two-thirds (69 per cent) of SMBs say government support has been important to their company’s survival, and the same goes for community support (67 per cent),” explains Michiel van Vlimmeren.
In a nutshell, Salesforce’s Small and Medium Business Trends report shows that SMBs are now increasingly acting like digital tech startups. “It’s fair to say that the pandemic and its economic impact forced many SMBs to digitise. They had to make sure their employees could communicate, collaborate, and do business safely in a changing world,” notes van Vlimmeren.
Customers have greater expectations
The report also highlights that the resilient comeback of SMBs and their growth trajectory has resulted in customers now having greater expectations than before. The Connected Customer survey by Salesforce shows 90 per cent of customers connect the way a company acts during a crisis directly with their trustworthiness.
This is in line with Salesforce’s State of the Connected Customer report, which showed that 83 per cent of customers expect to engage immediately with someone when contacting a company. In order to meet these expectations, SMBs have reportedly adopted new practices with nearly 47 per cent being more careful about their customer communications.
The change in customer expectation has also resulted in SMBs adopting automation for various functions such as customer service and HR operations. “Our findings show that 42 per cent of companies with growing revenues in the past year have accelerated their tech investments. These SMBs reported that they mainly increased their investments in their customer service, sales and marketing operations,” adds van Vlimmeren.
SMBs still face significant hurdles
The pandemic has seen SMBs adjust and innovate at a scale never seen before but they continue to face significant hurdles. A growing number of SMBs reported “roadblocks to meeting customer expectations” from March to August 2020. The report also shows that SMB leaders continue to experience challenges.
These challenges include “customer engagements, responding quickly to inquiries, engaging customers on preferred channels, and providing a connected experience.”
Michiel van Vlimmeren says, “SMBs have been accelerating their tech investments, not only to leverage technology as a differentiator to survive, but also to meet customer expectations. 72 per cent of SMBs have increased their company’s online presence over the past year and 41 per cent of SMBs have accelerated their investments in customer service technology over the past year.”
E-commerce presence grows among SMBs
The report shows that 63 per cent of SMBs have e-commerce now with 33 per cent saying they have had e-commerce for more than 12 months. The report also shows that 31 per cent added e-commerce within the past 12 months while 14 per cent acknowledged their plans to add within the next 12 months. Only 23 per cent say they have no plans to add e-commerce function within the next 12 months.
Almost 71 per cent of the SMBs leaders say that their customers expect online transactions. The SMBs also acknowledge the security concerns that are part of embracing digital technologies. 90 per cent of the SMBs say they are focused on data security and taking action to ensure their customers’ information is safe. For SMBs, keeping up with the demand remains a challenge.
“The supply chain problems definitely have an impact on being able to keep up with the demand if you look businesses, reliant on materials and the sourcing of products. However, in general, we see customers are more and more demanding when it comes to customer experiences,” Michiel van Vlimmeren explains based on the report.
He adds, “Research has shown that approximately one-third of your customers get higher expectations from other companies when they have had one excellent customer experience. Meaning that the companies that already had a strong digital infrastructure give new meaning to what it means to have a good customer experience.”
Upskilling and growing the workforce
The report shows that maintaining perks or offering flexible work hours are not the only actions that SMBs have taken during the pandemic. In order to stay resilient, they have also embraced the idea of upskilling their employees.
“We’re in a new all-digital world and that means everyone needs the digital skills to participate in it. In our view, it’s a responsibility for the employer to work closely with governments and community stakeholders, to ensure that training and recruitment scales up to match digital demand and it also asks for an active learning mentality of employees,” says van Vlimmeren.