Survey: Small business optimism will result in millions of new jobs in 2021

Written on Jun 03, 2021

Small businesses in the U.S., the UK and France are showing optimism as major economies reopen across the globe and consumer confidence rises. A new sentiment survey from Sage shows that small businesses – the economic backbone of many countries – have reached a turning point and confidence has largely returned.

Three quarters of small businesses surveyed are optimistic about the future of their business and growth trajectory in the next year. Optimism is mainly driven by the vaccine rollout program (45%), the return of in-person customer engagement (35%) and projections of increased consumer spending (32%). Over eight in 10 small but do not expect another lockdown with most small businesses feeling optimistic that their business will return to pre-pandemic levels this summer – both in terms of profitability and staffing. In fact, 81% of small businesses across markets believe their business will return to pre-pandemic profitability this summer. This confidence is led by the U.S. (82%), followed closely by the UK (79%).

An ability to adapt was critical during the pandemic. Many (60%) small businesses say that they have coped well with the barriers COVID-19 placed on them, making big changes to how their business operates. Most commonly, in the U.S., 38% of small businesses said they cut overhead costs and, because of further financial barriers, 27% said they relied on their savings to make it through. This behavior was also reflected in the UK, with 35% cutting overhead costs and 25% relying on savings. In France, the figure was 35% and 21% respectively.

Small businesses turned to technology to overcome difficulties and create efficiencies within the business. In fact, 76% of small businesses say they rely on technology. In the U.S., 64% used new technology to sell more and stay connected with customers or improve how their business operates. French small businesses used technology similarly to U.S. small businesses (67%), while 52% of small businesses in the UK also invested in new technologies, nearly all of whom said this increased investment improved their business.

Renewed optimism is driving hiring plans, and as small businesses grow their workforce, they will continue to look at how they can increase diversity and prioritize employee wellbeing. One-third of small businesses are expected to hire in 2021, which could create millions of jobs. When applied to ONS data on employment from small businesses, this could mean 4.6 million more jobs in the U.S., 2.4 million in France and 1.2 million in the UK

Since the start of the COVID-19 pandemic, small businesses are thinking more about their wider role in society, ranging from supporting employee well-being initiatives and environmental sustainability initiatives to prioritizing diversity in recruiting – with many small businesses expected to make further improvements in the upcoming year. Small businesses across the globe are increasing their focus on ways of working and employee wellness with 47% of U.S. small businesses improving flexible working, 37% of UK small businesses increasing support for physical wellness and 34% of French small businesses modifying recruitment initiatives to prioritize diversity.

Leave a comment