Coronavirus Survey: Small Businesses and Workers Can’t Afford Quarantine
By Society of Human Resources Management
ALEXANDRIA, Va., April 1, 2020 — 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, SHRM president and CEO. “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 If a company’s principles are just words on an outdated webpage, this stress could crack that workforce.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.