Survey Reveals COVID-19-Related Issues a Key Influencer for Businesses Heading into 2020 Elections
Our parent company Paychex surveyed businesses of various sizes on what impact, if any, the COVID-19 pandemic had on their operations and outlook, as well as what are their key issues and primary challenges heading into the 2020 elections.
Just by writing “2020”, there’s no escaping the next words — “COVID-19.” The pandemic impacted economies, healthcare systems, and psyches of nations around the globe.
In the United States, the impact of COVID-19 will be seen in its local, state, and federal elections — right up to the presidency. Nearly two-thirds of participating businesses (63 percent) in a nationwide survey conducted by Paychex ranked COVID-19 as their most important issue this election year.
In a runup to the Nov. 3 elections, Paychex surveyed1 500 principals of U.S. companies with 1 to 500 employees — weighted heavily toward very small businesses (1 to 19 employees) as 250 people from that group participated — to find what was top of mind for businesses.
Results revealed that overall nearly half (48%) of businesses surveyed continue to be somewhat negatively impacted by COVID-19 — 15% strongly negatively impacted — with the overall effects of the pandemic intertwined in what businesses want next.
When business owners cast their ballots in the November elections, the kind of stimulus options they want may be the driving force that determines how they vote. What’s most notable about the survey results is how the percentages hover around 50 for many of the responses from each business size, indicating there is another half or more that don’t feel as strongly about a particular topic.
This is the uncertainty created by COVID-19 and highlights the uncertainty voters feel about COVID-19-related government activity. Although survey responses showed businesses of all sizes agree on the top issues in the 2020 elections — COVID-19 (63%), health care (55%), and tax reform (55%) — there are major differences in what they described as their top challenges.
Let’s take a closer look at some of the survey results.
Business Confidence Up on Safety and Survival
Not every survey question elicited a nearly half-and-half split. When it comes to the safety and health of customers and employees, the results were primarily positive. Nearly three-quarters (72%) of overall businesses somewhat (30%) to strongly agreed (42%) that their business had the resources to put in place and enforce safety measures. When looking at business size, the mid-sized group is most confident as 46% strongly agree.
And despite the permanent closure of hundreds of thousands of small businesses during the pandemic, 63% of businesses in the Paychex survey say they have enough cash in reserve to stay in businesses throughout the pandemic. Breaking this down further, 32% strongly agree they have ample cash reserves — with small businesses (25%) feeling less confident than mid-sized businesses (35%) and even very small businesses (32%). Among election issues, many businesses (38%) strongly agreed they could afford to pay $15 per hour to employees, with mid-sized businesses expressing most confidence at 51%, compared to small businesses (42%) and very small businesses (38%).
Interestingly, when asked whether they would support an increase to $15 for the federal minimum wage, the percentage of businesses that strongly agreed dipped across all sizes from their results on whether they could afford to do it:
- 29% for very small businesses
- 33% for small businesses
- 42% for mid-sized businesses
Another key election issue: health care. Mid-sized businesses (100 to 500 employees) have concerns, with 49% listing the cost of health care as a continuous challenge for them and their employees. Nearly half (49%) of those surveyed in this group size did agree that the United States should enact universal health care.
Impact of COVID-19 Varies by Business Size
Whereas 48% of businesses overall responded that they have been at least somewhat negatively impacted by COVID-19, which include government mandates and changing customer demand, there is a major difference between the small businesses (20 to 99 employees) and the medium-sized businesses (100 to 500 EEs). Data indicates that 45% of small businesses have been negatively impacted by the pandemic compared to only 19% of medium-sized businesses, with very small business (1 to 19 EEs) coming in at 49%.
Some businesses indicated that the COVID-19 pandemic had no effect at all (29% overall), with 23% overall responding that the impact was positive (somewhat to strongly). Mid-sized businesses said COVID-19 had a strongly positive impact (34%) — with another 28% in that group saying it was somewhat positive — compared to the other groups: very small businesses were 10% and 12%, while small businesses were 19% and 14%, respectively, for strongly positive and somewhat positive.
What Kind of Stimulus Options Do Businesses Want?
Almost half of the respondents indicated they desire additional stimulus that would help their businesses and employees. Many mid-sized businesses participants (38%) strongly agree that without more government stimulus to see them through the pandemic their business could close. Overall, the three groups agree some kind of stimulus is needed.
“For many businesses, the first round of federal stimulus made the difference between staying open and closing their doors, between keeping their staff on payroll and being forced to make layoffs,” said Martin Mucci, Paychex president and CEO.
- 49% strongly support stimulus that would waive the penalty for early retirement withdrawals
- 46% want stimulus options for tax credits on personal protective equipment (PPE)
- 46% say liability protection from COVID-19-related lawsuits is needed
- 44% strongly support a second round of Paycheck Protection Program (PPP) loans
“As COVID-19 cases once again begin to rise throughout the country, a second stimulus bill will provide enhanced stability for businesses as they plan for the future,” Mucci said.
Very small businesses strongly support waiving the penalty for early retirement withdrawals, with 49% in favor. Small businesses agree equally — 53% for each — on tax credits for PPE and liability protection for COVID-19-related lawsuits, while mid-sized businesses strongly support tax credits for PPE (68%).
Businesses Cite Continued Challenges During COVID-19 Pandemic
The biggest challenge, according to businesses that participated in the survey, is the unknown — mainly coping with the economic uncertainty (45% say this is somewhat challenging while 40% say it is very challenging) and the public health uncertainty (39% say this is somewhat challenging while 40% say it is very challenging) created by the COVID-19 pandemic.
A deeper dive into the data reveals that there is not much difference among the business sizes for these two topics. Coping with economic uncertainty breaks down as very challenging for the three groups as follows:
- 40% very small businesses
- 44% small businesses
- 39% mid-sized businesses
Similarly, coping with public health uncertainty as very challenging:
- 40% very small businesses
- 46% small businesses
- 47% mid-sized businesses
The third most-important challenge overall seen as very challenging is the most business-focused — finding new customers (37%).
The groups differ, however, in what is most challenging, with very small businesses citing the economic uncertainty (40%) as the tops among the very challenging. Small businesses said finding good employees (50%) was the most difficult aspect of operating during COVID-19, while the biggest challenge for mid-sized businesses was retaining good employees (55%).
In any election year, the issue of compliance is always a hot topic for businesses. The influence of COVID-19 is evident in the areas those surveyed cited as most difficult to comply with.
- Paid leave: Very small business (25%) and small businesses (23%)
Employer/customer safety and liability: Mid-sized businesses (35%). In comparison, neither of the other two groups topped 22% (small businesses), with only 12% of very small businesses citing this as very difficult.
Paychex will be monitoring legislation following the elections. Please continue to check back for updates and insights on issues important to your business.
1 Paychex polled 500 randomly selected business owners with 1 to 500 employees. The survey was fielded Sept. 11 to Oct. 1, 2020 and was administered online by Bredin, a third-party research firm, and yielded a +/- 4.00% margin of error.