With the end of the Paycheck Protection Program, some small businesses may find themselves struggling to maintain a remote workforce and implement a remote HR strategy.
When the pandemic resulted in nationwide lockdowns globally, it had a considerable impact on the economy. However, smaller businesses that usually have less cash flow and revenues were hit the hardest. And this has affected employees as well.
But loans and financial stimulus from governments have allowed these small businesses to remain afloat. Besides, they have also allowed them to furlough their employees against laying them off, ensuring that employees Opens a new window are secure financiallyOpens a new window .
With initiatives supporting small businesses, such as the Paycheck Opens a new window Protection ProgramOpens a new window , ending on August 8, times ahead could be challenging for these businesses and their employees. Small Business Majority, an advocacy group, surveyedOpens a new window its members and found that 80% of small business owners would like to take a second PPP loan. If such a loan was not available, 44% of the members said that they would be unable to survive another six months.
There is an emerging alternate view too. Some small businesses feel that due to the unemployment benefits being extended to employees, many do not feel motivated enough to come back to work. This, they say, is particularly true of part-time or hourly workers.
Other studies, like this one from a group of Yale University researchersOpens a new window , found that there is â€œno evidenceâ€ that workers receiving the added federal unemployment benefit were not inclined to work. It also found that â€œpeople with more generously expanded benefits also resumed working at a similar or slightly quicker rate than others did.â€ The issue with this study is that it doesn’t cover part-time workers and other â€œshort-termersâ€ who are a significant majority receiving the benefit.
With both the financial respite measures â€“ unemployment benefits and the PPP â€“ small businesses and their employees, especially full-time employees, could be looking at a bleak future.
In the absence of this benefit, small businesses can lose long-time employees who will need to move on and look for roles elsewhere. This in turn can result in massive costs for recruiting and retraining new talent. But that’s not all. Some other challenges await small businesses that lack finances.
How a Lack of Finances Can Affect Small Businesses Workforce Management
Small businesses are already grappling with other technology and people-related challenges due to the pandemic. Without any financial relief, these challenges can worsen. Two significant areas of workforce management this can affect include cybersecurity and leading remote teams.
Higher cybersecurity risks
It is well-known that most small businesses do not have the requisite technology infrastructure to reduce cybersecurity risks. In a 2019 Global State of Cybersecurity in Small and Medium-Sized Business study conducted by The Ponemon InstituteOpens a new window and commissioned by Keeper Security, 45% of the SMBs surveyed shared that their security tools were ineffective at reducing attacks. The study also shared that a very high percentage (66%) of SMBs had faced a cyberattack in the past 12 months. This is of greater concern because of the sudden shift to remote working by almost all employees who are accessing critical company data over vulnerable networks. Further, there is limited IT staff trained to manage and mitigate this risk by enabling companies to identify and apply tools and apps for their remote workers. So while financially, it may be favorable for small businesses to have remote workers, since it means lower cost and usually high productivity, the challenge is to maintain cybersecurity. However, with limited financial support, they might be forced to choose a less secure way of working.
Challenges in leading and sensitizing remote teams
While large organizations can spend money and resources to engage and sensitize their remote teams, small businesses may find it tougher to transition to an entirely remote HR strategy, including performance managementOpens a new window , recruiting, and even regular virtual communications. At this time, investing in an expensive video conferencing app might not be possible. Employee communications may be weak because of the lack of these tools. Feedback may not be provided often, affecting morale and productivity. And hiring may pose a special challenge without the means to perform virtual recruitment.
As small businesses evaluate their overall business strategy without financial support, employees will form the largest segment likely to be impacted by this decision.