Efforts to ‘Flatten the Curve’ Leave Millions of Americans in State of Economic Uncertainty and Stress
ALEXANDRIA, Va.–(BUSINESS WIRE)–Half of America’s small businesses can’t afford to pay employees for a full month under the current economic lockdown meant to slow the spread of the coronavirus pandemic. This is according to new surveys released today by SHRM (Society for Human Resource Management). The research found most businesses expect to see a decrease in revenue, while businesses in certain sectors can expect even greater losses. Additionally, a majority (58 percent) of American workers will be unable to meet basic financial needs within a period of 30 days or less.
The surveys polled a sample of American workers, HR practitioners, and small business owners regarding the expected economic impact of the coronavirus on their organization. Findings include:
- Over half of small businesses expect revenue losses of 10-30 percent, while one in five expect losing more than 30 percent, and 4 percent expect a total loss of revenue and the closure of their business;
- 1 in 5 small businesses can’t afford to pay employees for more than a week under quarantine;
- Over half of American workers say their job cannot be done remotely and one third of small businesses say none of their business processes can be done remotely.
- 6 in 10 American workers say they will be unable to meet basic financial needs (rent, groceries, bills, etc.) in 30 days or less;
- 1 in 5 American workers say they will be unable to meet basic financial needs in one week or less;
“There are tough times ahead for all. Headlines have highlighted the pandemic’s impact on Wall Street, but the bigger story might be the economic shockwaves hitting the businesses and workers on Main Street,” said Johnny C. Taylor, Jr., SHRM-SCP, CEO and president of SHRM. “This new data underscores this pandemic is, in many ways, more challenging than the 2008 financial crisis. While much remains uncertain, business leaders have been reaching out to SHRM for information, and we will continue to be a trusted resource to those facing big questions and difficult decisions.”
Taylor added: “This virus shows nothing tests a culture like a crisis. If a company’s principles are just words on an outdated webpage, this stress could crack that workforce. But if principles exist in a real culture, that’s where people come together and thrive through hardship.”
The research also shows that financial impacts to American workers vary by industry.
Workers in physical industries—e.g., construction, manufacturing and transportation—expect the worst impact, as 72 percent report an inability to meet basic financial needs in a month or less. Service industry workers, such as accommodation, education, food and retail, expect a similar impact (62 percent), while workers in knowledge industries, including finance, insurance, law, research, government and others, were far less likely (38 percent) to anticipate financial difficulties.
Additionally, nearly 80 percent of HR professionals had formal or informal business continuity plans in place as of early March. However, nearly a quarter of American workers report their organization hasn’t shared how management was reacting to COVID-19—highlighting a potential disconnect between workers and executives.
- COVID-19 Research: Implications for the American Workforce
- SHRM Resources on COVID-19 and the Workplace
- SHRM/CDC Update on COVID-19: Understanding What Has Happened and What Is Ahead
American Workers: A sample of 492 Working Americans was surveyed using the Amerispeak Omnibus survey, NORC at the University of Chicago’s probability-based panel designed to be representative of the U.S. household population. Data was weighted to reflect the U.S. adult population. The survey was administered Thursday, March 12 to Monday, March 16, 2020. Study margin of error was ±4.34 percent.
Small Business Owners: A sample of 512 Small Business Owners (owners, operators, leaders, or chief executives of businesses with 2-99 employees) was sourced from Pure Spectrum. The survey was administered Friday, March 13 to Monday, March 16, 2020.
HR Professionals: A sample of 518 HR professionals were received from 30,000 SHRM members invited via e-mail to participate in a survey, yielding a response rate of approximately 2%. The survey was administered Friday, March 13 to Wednesday, March 18, 2020. Study margin of error was ±4.31 percent.
SHRM, the Society for Human Resource Management, creates better workplaces where employers and employees thrive together. As the voice of all things work, workers and the workplace, SHRM is the foremost expert, convener and thought leader on issues impacting today’s evolving workplaces. With 300,000+ HR and business executive members in 165 countries, SHRM impacts the lives of more than 115 million workers and families globally. Learn more at SHRM.org and on Twitter @SHRM.