Heading into midterm elections, inflation, and labor market concerns weigh heavily on SMB employers
Despite these concerns, most employers plan to maintain or increase tech spending in 2023
JACKSONVILLE, Fla., Nov. 3, 2022 /PRNewswire/ -- With the holiday season and the midterm elections just around the corner, inflationary concerns and labor availability challenges continue to weigh heavily on the minds of small and mid-sized businesses. These are just a few findings from Greenshades Software's quarterly Market Sentiment Survey.
Similar to the inaugural survey conducted in late summer 2022, the Q4 survey revealed that inflation again tops the list as a key concern for employers. Despite these economic worries, most respondents indicated their technology budgets would remain level, or in some cases increase, in 2023.
"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 and mid-sized 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."
Greenshades – a leading provider of payroll, HR, and tax services for over 4,000+ small and mid-sized businesses – recently launched a quarterly market survey to gain insight into the business and operational topics that have the most significant impact on SMB organizations. This quarter's survey, conducted in mid-October, yielded ~ 370 responses.
Inflation and recruiting/retention concerns top the list for two consecutive quarters
Consistent with the findings from our Q3 survey, this most recent report reveals that inflation is once again a key concern for most employers. When asked, "what market conditions keep you up at night," just over 37% of respondents cited inflation as the top response.
Although inflation rates remain in the low eight percent range overall, studies from the U.S. Bureau of Labor Statistics reveal that specific categories – such as fuel, food, and transportation – are experiencing cost increases that are well into the double-digit percentage range. For many organizations, this adds a layer of challenge to what is already a busy time of year, particularly for those in the retail and hospitality sectors.
Another economic bellwether, unemployment, is creating stress for SMB organizations. According to the Greenshades survey, just over 34% of respondents indicated that "recruiting & retention" topped their list of market condition concerns.
The U.S. Department of Labor reported that September's unemployment rate dropped – from 3.7% in August to 3.5% in September – signaling continued labor market resilience, despite rising costs and skyrocketing interest rates. Although this can be regarded as a bright spot in the economy, it presents a challenge for those organizations looking to staff up ahead of the holiday season.
Economic concerns and recruitment and retention concerns far outweighed other survey options including compliance, supply chain disruptions, and mid-term election results.
Technology investments remain strong
When asked about their 2023 technology budget status, 50% of all respondents indicated they anticipate budget levels to remain flat, while an additional 8% indicated they're increasing their technology budget over 2022 levels.
This technology investment strategy holds true, even for organizations most concerned by economic factors. Of the respondents who cited inflation as their number one concern, 46% actually plan to maintain or increase technology spending in the coming year.
"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."
Automation and Year-End tax and forms processing
One of the most critical (and most time-consuming) aspects of the payroll process is year-end tax filing and the associated forms and paperwork that is required. According to the survey, 61% of respondents indicated they have fully automated this process, with 19% still completing these tasks manually. An additional 20% were unsure.
The survey also asked about the relative level of satisfaction with the year-end process, and the vast majority of respondents – just under 71% - indicated they were somewhat or very satisfied. Of these individuals, more than three-quarters are also automating the process, showing a strong correlation between automation and satisfaction.
This is bolstered by the finding that of those who were somewhat or very dissatisfied with their year-end process, 67% are still handling it manually.
What's Next?
As market volatility and economic uncertainty continue to dominate headlines across the country, employer concerns parallel this general market sentiment. Recruiting and retention also weighs heavily on the minds of business leaders, which could create additional challenges as retailers, restaurants, and other consumer-oriented businesses head into what has traditionally been the busiest time of year.
To blunt the impact of these market concerns, technologies that can automate and optimize tasks such as employee onboarding, payroll processing, and other HR applications can help business leaders spend less time on administrative functions and more time addressing these critical issues.
In an effort to help business owners successfully address one of the more time-consuming tasks – year-end tax form processing – Greenshades is hosting a series of webinars from now through the end of tax filing season.
To register for any of these upcoming webinars, or to join the Greenshades mailing list so you can gain access to future reports and similar content, visit www.greenshades.com.
Since 2002, Greenshades has been singularly devoted to helping hardworking companies fulfill the promises they make to their employees. With intuitive technology and best-in-class customer support, Greenshades empowers Payroll and HR departments to give their teams everything they need to thrive. Delivering accurate payroll, proactive compliance, automated tax calculations, and robust employee engagement through one powerful platform supported by world-class customer care.
SOURCE Greenshades Software
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